Local Government — 2026-08-24 (partial)

Thank you. The Senate committee and local government will come to order. Good afternoon. Thank you for joining us for this meeting. The Senate welcomes the public in person, and we are holding our committee hearings in the Capitol building. I ask all members of the committee to be present in room 112 so we can establish our quorum and begin our hearing. We only have one bill on today's agenda, AB 817, will be presented by Assemblymember Mark Gonzalez. We will now establish a forum. Senator Starrazzo? Here. Starrazzo here. Choi? Here. Choi here. Arain? Ashby? Cervantes? Here. Cervantes here. Laird? Cervantes here. Cervantes here. You have a quorum. Thank you all very much. We are now ready to start with Assembly Bill 817. Assemblymember Gonzalez, you may proceed.

Good afternoon, Madam Chair and members. My name is Willie Armstrong. I serve as Senior Director for State Affairs on behalf of Los Angeles Mayor Karen Bass, proud supporter of AB 815. We want to thank the author for bringing this timely legislation forward, and we will continue to support this endeavor to bring relief to and accountability for the Boyle Heights community. The Lineage Fire was not just a fire. It became a crisis for families across Boyle Heights. Families have dealt with unbearable odors, rotting food, rodents, and flies while simply trying to work, run their family businesses, send their children to school, and live their lives. Absolutely no family should have to live like this. As a consequence of the Lineage Fire, Mayor Bass has issued emergency orders, demanded the removal of 85 million pounds of spoiled food, provided emergency housing assistance to more than 1,300 impacted residents and families, helping them to temporarily relocate and get connected to critically needed resources during the crisis. We cannot change what happened to Boyle Heights, but we can change what happens next. AB 817 sends the message that number one, companies must be prepared when something goes wrong. And number two, communities must be protected. The bill requires large coal facilities to maintain a contingency fund before receiving new building permits. These funds could support food assistance, temporary housing, air quality monitoring, healthcare needs, and vector control, among other things. AB 817 also includes tax relief provisions for qualified residents, property owners, and businesses affected by the Boyle Heights fire. Settlement funds intended for harm, displacement, and disruption should be available for recovery, not taxed as income. For these reasons, and on behalf of Los Angeles Mayor Karen Bass, I respectfully ask for your aye vote on AB 817. Thank you.

Thank you very much. Anyone else want to speak in support of AB 817? Please come forward. of your organization.

Thank you very much. Afternoon, Chair and members. Sasha Horwitz, Los Angeles Unified School District, in support. Thank you. Good afternoon, everyone. Talar Alexanian with Ultimate Health Services here in support. Thank you for your leadership. Thank you. Good afternoon, Chair and members. Melissa Ayala on behalf of Carlos Bacarano, President and CEO of Clinica Romero, in strong support. Thank you. Thank you. Good morning. Rolando Chavez, AVP of Government Affairs and Community Engagement for Ultimate Health Network, in strong support. Thank you very much. Do we have principal witness in opposition? That's okay. They could come up here. There are more chairs. Good afternoon. Welcome. Thank you, Chair members. Thank you for having me today. I'm Katie Little of the California. Okay, so I'm not on. Oh, there we go. There you go. Okay thank you Katie Little with the California League of Food Producers whose members represent a wide variety of food processors beverage producers who handle fruit vegetables olives dairy products and snack foods to name a few Thank you for the opportunity to share our thoughts on AB 817. First, and most importantly, I want to recognize the devastating impact the June 17th fire had on Assemblymember Gonzalez's and Senator DeRazzo's district. we have deep empathy for the Boyle Heights community in Los Angeles who are suffering and truly understand the desire to put strong procedures in place to support communities in similar incidents that may occur in the future. However, as currently drafted, we believe that 817 could create unintended consequences for a wide range of industries that provide Californians with essential products and services, and therefore we are opposed unless amended today. As written, AB 817 reaches far beyond the dedicated cold storage warehouses, and it could affect food processors, distributors, growers, packers, frozen food manufacturers, agricultural cooperatives, retailers, dairy facilities, and even pharmaceutical distribution centers. Requiring a contingency fund as a condition of a permit could discourage investment in new and existing facilities at a time when California's food supply chain already faces capacity challenges. Many different types of facilities have refrigeration as an aspect of their building in order to safely store a variety of products like temperature-sensitive medicines such as vaccines, insulin, and other medicines and medical supplies, as well as fresh produce for processing and dairy products. All of these types of temperature-controlled facilities play a critical role in California's supply chain, and imposing a contingency fund of up to $20 million could jeopardize their ability to operate, expand, or make needed improvements like energy efficiency measures. To lessen these impacts, we would request that AB-17 be narrowed to apply to only new facilities that are 20,000 more or more square feet and are fully a refrigerated space and located in urban environments. We also ask that the fund amount be tied to a risk posed by the material stored. and that the portion of the fund should be dedicated to emergency cleanup efforts to ensure swift action when incidents do occur. Finally, the bill lacks clarity on how the contingency fund will be calculated, administered, or audited. Without clear standards, businesses would face uncertainty and inconsistency local requirements. In its current form, AB 817 would affect food prices, pharmaceutical availability, family owned businesses, jobs, sustainability efforts, and the shared responsibility of disaster response from across multiple levels of government. Cold storage is essential to delivering food and medicine in Californians, and we are committed to working with the author and stakeholders to find a balanced, equitable approach. We urge you not to rush the legislation through and allow more time to gain a better understanding of what is lacking in current law and what will be most helpful in communities in the future. For these reasons, we are opposed unless amended. Hi. Good afternoon, Chair and Committee members. I forgot to ask two minutes. Yeah. My name is Katie. She took one of your, no, I'm just kidding. Oh. Go ahead. My name is Katie Davey. I'm the executive director of the Dairy Institute of California. Dairy Institute represents milk processors and dairy product manufacturers with processing plants based in California. Our organization's goal is to support our members' ability to operate sustainably, innovate, and improve efficiency in their company's operations as they strive to deliver the highest quality dairy products to Californians. Thank you for the opportunity to share our concerns regarding AB 817. We acknowledge the heavy toll of the June 17th warehouse fire in Boyle Heights in Los Angeles, and we agree on the need for clearer procedures to handle future emergencies efficiently. However, the one-size-fits-all solution being presented by AB 817 to this solution will hamper the ability of dairy processors to continue to operate their cold storage facilities, discourage investment in new facilities, and will harm the ability of California to attract new processors to our state. There are 114 active dairy manufacturing facilities across California. Many of these manufacturing operations have a cold storage facility. Dairy processors hold products in cold storage immediately after processing to prevent microbial growth, preserve product quality and satisfied strict food safety regulations at the state and federal levels. California is the number one dairy state in the nation, employing over 150,000 people in our state, many of which are unionized. Our members have manufacturing plants, distribution centers, and cold storage facilities across our state. Our members' facilities are in urban, suburban, industrial, and rural settings. For California's dairy industry to grow and provide good manufacturing jobs for Californians, we need cold storage facilities for the products we manufacture. Imposing a $20 million contingency fund on cold storage facilities threatens our members' ability to grow their operations and directly compromises their ability to invest in growth and expansion of current facilities as well as fund energy efficiency operations. To lessen these mandates, or excuse me, to lessen these impacts, we would request AB 817 be narrowed to apply only to new facilities that are over 20,000 square feet or more, a fully refrigerated space, and are located in urban environments. We also ask that the fund amount be tied to the risk proposed by the materials stored, and that a portion of the fund should be dedicated to emergency cleanup efforts to ensure swift action when incidents occur. Finally, the bill before you lacks clarity on how the contingency fund would be calculated, administered, or audited. Without clear standards, businesses would face uncertainty and inconsistent local requirements, ultimately disincentivizing investment in our state. Yes. For these reasons, we are opposed unless amended today. Thank you. All the others who want to stand up in opposition to AB 817, please come forward. Madam Chair and members, Kurt Kimmelschew here today on behalf of the International Warehouse Logistics Association, also with an opposed and less amended position. Thank you. Thank you. Good afternoon. Dennis Albiani with California Advocates. We represent Consumer Brands Association, as well as several agricultural entities, cherries, pears, and seed that also are opposed unless amended. Thank you. Good afternoon. Audrey Ratajczak on behalf of the California Business Properties Association. We have some concerns about just the making projects infeasible, and we've submitted amendments, and thank the author for continuing to work with us. Thank you. Good afternoon. Taylor Truffaut on behalf of a variety of agricultural trade associations and the California Grocers, respectfully opposed unless amended. Good afternoon, Nicole Quinones on behalf of the Global Cold Chain Alliance. Opposed unless amended. Good afternoon, Chair and members. Tricia Gerringer with Agricultural Council of California. Respectfully opposed unless amended. Good afternoon, Erin Rohrwood on behalf of the Almond Alliance. Also respectfully opposed unless amended. Thank you. Coriana Miller with the California Chamber of Commerce. Also opposed unless amended. Respectfully. Thank you. Chloe King with Political Solutions on behalf of the Healthcare Distribution Alliance, opposed unless amended. Thank you. Jackie Honest with Sloat Higgins Jensen on behalf of the California Fuels Communities Alliance, respectfully opposed unless amended. Thank you. Randy Pollock on behalf of the American Chemistry Council, opposed unless amended. We believe that there's a way to get to a more balanced approach. Thank you. Elizabeth Esquivel, California Manufacturers and Technology Association, also opposed unless amended. Thank you. Good afternoon, Chair and members. Adam Regley on behalf of CREDA SoCal, in respectable opposition unless amended. Thank you. Thank you. Thank you very much. Okay. Yes, come to the dais. Any questions or comments? Yes, Senator Aragon. Thank you. So on the contingency fund, so as drafted, it's really the purpose of the contingency fund is a question of the office. author is to help those that are impacted by some sort of health and environmental disaster that results from a cold storage facility. It's to provide, pay for medical coverage, relocation assistance, is to help the people that are impacted, correct? Correct. Okay, so the question was based on the contingency funds. For context, Linud spent about $3 million on community assistance and Considering the size and the impact of this disaster, it should have been more. The reality is that they've already spent nearly to $80 million to $100 million on just the cleanup alone, but none of those specific dollars went to anybody in the community, to air purifiers, to displacement, to housing, to the lost wages that many people, including the business community, who lost wages as well. So the contingency fund is set up so that it holds folks accountable should a state of emergency occur, should a disaster occur. And I do want to say that I do appreciate the opposition, but I did also get reached out by a number of folks who said this is eye-opening for us to think about our own cold storage facilities and making sure that we are up to par with our technology to put out a fire so we don't become the next Boyle Heights. Thank you. Well, I want to thank you for bringing this bill forward. What happened was completely unacceptable, and people are still dealing with the impacts of this disaster. And I want to thank the chair for her leadership on this. I don't think respectfully to the opposition that money that should be going to help those that are impacted should be used to clean up the disaster that the company had caused. So the idea that rather than having money to mitigate the impacts that could be used for cleanup, I would argue the companies have an obligation to clean up. So I will move the bill at the appropriate time Thank you Yes Senator Sillardo Thank you I have a question regarding the cleanup effort right now and it LAC Is LAC leaving this completely up to the private industry to clean up, or do they have a plan with the private industry to assist in that? Because this kind of is one of those issues that needs to be all hands on deck. We'll figure out the finances later type of thing and get it done as quickly as possible. And what are the impediments to getting it done? So from day one, Los Angeles Mayor Karen Bass has been on the ground. She deployed all of her city resources to assist in the cleanup of the Lineage Fire. And those efforts still go on today. Are there resources the public works? Are they involved in removal and disposal of the stuff that's left over that's rotting? Because I just can't imagine why two months later they're still pulling product out of a, I mean, it's a large warehouse. I get it. But we clean buildings like this in California all the time as far as knocking them down and clearing them out. And what is holding up the show? What is holding up the show? So to answer the senator's question, the property itself, one side of it sits on the city of Los Angeles. The other side sits on the county side of it. So both the county and the city have both been using every resource, not only A, to put it out, B, to clean it out. And then they're still transporting the millions and millions and millions of pounds of food. So it's already taken two months to do that on the daily. In fairness, the city and county can only do so much because they don't have the right to step into the physical property. It's lineage that is delaying the process for cleaning it up. The LA City portion of it, respectfully you can jump in, can only do so much to enforce them to do that, which is why we're enforcing more penalties for them for not for cleaning up sooner. But it's taken two months even to get to this point for the millions of pounds that are in there. Frankly, they probably should have just destroyed the other side of it, but they're still literally cleaning it out as of today, which has led to more rats and flies infiltrating the area. Right. So when there's a public health emergency like that, and you can declare an emergency, We did. They can go in and clean that up if the progress is not satisfactory. There is nothing that says you cannot, just because it's somebody else's land, you can't enter their land. You absolutely can go in and clean up a public health hazard when the response that is occurring isn't good enough to do that. We are always going to have these type of fires. Nobody wants them to happen. No industry wishes that their equipment would fail or anything like that. We have building and safety inspections. We have fire safety inspections, and especially on facilities like this every year. And they're specialty. They're not the fire station that comes out. They're people that are in fire prevention. This is their job. They go out and inspect these facilities. We also have hazmat, and they have plans and all of those things. I just, other than making some businesses that aren't as wealthy less likely to be able to do business with a large contingency fund that is needed, other than, I'm not sure that this actually attacks the lack of preparedness on everyone's side. That's not just them. Incidents like these are a community and sometimes a county and then also sometimes a state issue to get it mitigated. Because that's what we need to be better at, is mitigating these incidents. And those are the type of responses that I want to see is how come we're not good at mitigating these incidents? We have all these technologies. We have all this equipment available. And yet somehow when something like this happens two and a half months later during the hottest part of the summer, we've got rotting food. And the money part of it should not be the issue. The process part of it needs to be addressed because there is no excuse for that not being cleaned up by now. And so there's problems, I think, on everybody's side. I think the state, from an emergency management position, is woefully inadequate in addressing the potential issues that are out there. We're trying now. I see some efforts to try. But, you know, I think, you know, and I don't want to call this knee-jerk because it isn't. You guys, you know, you're trying to do it quickly. But I don't know that this is helpful in the big scheme of things. I think what's more helpful in the big scheme of things is understanding how the two communities, or the communities, city and county, worked together. The response, I mean, that's the fire and health and all that other health, asthma. All those folks are already in place. It's what happens after that fire, after the response, that we need to be better at. And we're not better at that. And so, you know, the evacuation of people, the care of those people, making sure they get medical help, and all of that stuff is a county and a state, county, and city responsibility. And because the people who are having the fire, yes, there will be some consequences down the line financially for them, But those consequences are not something that we should be doing, trying to enact immediately, which hampers the effort that we need to do to get people back on the road to having a healthy environment for themselves. So I have concerns about the bill in that regard and whether it's going to be helpful for these type of efforts or not. Or even our ability to have food to distribute to people. We have a lot of logistics center out in Riverside and I can't imagine them having to move the food from the port to there to then back over to L.A. They're going to be around. What we do about it is the thing that we need to do better as communities and planners and working with private industry to ensure that we don't destroy their industry while we're trying to deflect the inadequacies that we have. And so I appreciate you guys trying your best to address the issues of these poor folks in Boyle Heights. And also, I saw the plume that goes all the way up to San Gabriel, up into Duarte. So it was a big incident, and we're always going to have them, no matter how hard we try. But we have to do better at the recovery part of this. And so I'll be working with whoever wants to work on it to make sure that that happens. Madam Chair, may I respond quickly? Oh, I was just going to say thank you. Well, I was just going to say thank you, and then for context, the fire was on a Wednesday. It was out what we thought Wednesday night. It reignited again on Friday, and then it continued for eight days. They used newer technologies like helicopters to put it out. But because it is a cold storage facility, it might be 100 and something degrees on the exterior, but the interior was at 40 degrees. And so that took even longer for them to put it out because of those pieces to it. And even with the state of emergency, the local city and the county still had to exhaust their resources first before the state could jump in. But I do appreciate your comments, Senator, and I align with them as well. and we are going to work to figure out some adjustments that we can make in the next couple of days. Thank you. Senator Choi. Thank you, Chair. Assemblymember Gonzalez, I have a question and my statements. Your bill largely deals with any victim settlements shall be income tax-free, which is affordable, I mean, supportable, because I also proposed a similar bill for the Palisade and Eaton Fire early in the year, last year, and I was stuck in a committee, but luckily Governor Newsom took that upon and then he put that in the budget and has been implemented, which is a good thing that they borrowed my ideas, and your ideas are the same thing. Secondly, that is this one, my understanding is that cold storage has been picked up and for rebuilding, $20 million of contingency funds are required to get the building permit. And I don't understand why in particular cold storage has been picked up. But to me, my understanding is that the cold storage facilities in Nakuna did not contribute for the fire and even firefighting. And by requiring this kind of burden, extra burden, financial burden for cold storage, my common sense understanding is that. is that storing perishable food items, medicine, and all kinds of food, and by requiring this, I mean, distributors of this food items, medicine items, no matter what, they will need that kind of a facility in the future. Simply that will add up to the cost to the consumers. We talk about affordability nowadays, that is the biggest problem. But now you are requiring additional burden on the facilities in particular distribution centers where this food items will be stored. And what a bad time to implement that kind of things. And then also one particular Boyle Heights situation will be implemented or limiting this kind of very difficult policy throughout the state. That means the negative impact will be entire state at the same time. As soon as this passes, I hope it will not pass. And even if it does, the governor will veto it because he understands affordability is a big issue right now. So I don't think this timing is correct. And not necessarily timing, but this idea is a bad one because of cost of living, of everything that we use on a daily basis, especially food. It's essential food and medicines are essential items in these items which we use called facilities. So did you think about this kind of a negative impact? And if you can convince me, you may earn my vote, but at this time I won't be able to support. That's fine. Look, I want to thank you, Senator, for your comments. Thank you for acknowledging the fact on the tax-free piece of it, why that's necessarily needed, especially for the businesses that have lost customers, have lost an impact to that community as well, especially the surrounding areas. In regards for context, LYNUD spent about $3 million on community assistance as a result of it, and on their own they've already spent $80 to $100 million on just the cleanup itself. The goal here is not to penalize cold storage facilities. The goal here is to pay back the community who's paying the price because of this fire that they didn't ask for. The goal here on creating the contingency plans is an insurance for those industries to be prepared should a disaster like this happen and then a state of emergency is declared. So you're not walking in on day one having to front money into a community. It's more preventative measures to make sure that the community doesn't suffer as a result of the corporation that's coming in and not putting out the mess that they started. And so the goal here is to continue to work with those nonprofits and other groups in our area. Koreatown Youth and Community Center has been a strong advocate in helping us with that. But those are dollars that are coming out of their own nonprofit that the company should be reimbursing them and paying for. So we're not discussing those pieces of it, but those are dollars that should be going back into the community, not back into a cleanup that a corporation started. Cold storage facilities did not cause the fire to begin with. And if you make it a voluntary contribution for such a disaster cleanup, I'm sure these companies, since they are using and they also need the good fire protection services, and they are living in the community and serving the community, so they will have a spirit of contributing voluntarily. But the making of a mandate, that makes a heck of a difference. So that will force for them to raise our cost of living on every aspect as I described. So I don't think that justifies this. Voluntarily is subjective, but I think mandating it holds them. This is a mandate, a requirement. Correct, but I'm open to the amendment, to possibly amending that number of it, but the goal here is to not have a disaster. If you can amend it, the voluntary. Open to it. Okay. All right. Anything else you wanted to say in response, Assemblymember Gonzalez? Okay. Yes. Senator Cervantes. Thank you so much, Madam Chair. I just want to take a moment to recognize the district in which you represent and the communities that have been affected by this fire. And really just making sure that their voices are heard, they're respected, and that they're centered throughout this process. As we discuss rebuilding, healing from this, and how we move forward collectively, certainly hear from the opposition and hopeful that perhaps some of those things could get worked out here in the near future, but happy to support the bill as you continue to address this issue. Thank you. Anybody else? No? Okay. I just want to make a few comments. I want to thank my colleague, Assemblymember Gonzalez. Unless you've been there, you have no idea what it's like. It's the impact that it's had. And by the way, this is a community that has repeated environmental justice issues. Excite. It cost our government almost $200 million, and it's still not completely cleaned up. Almost $200 million. There was no fund there. There was nothing for the community. just a few weeks before this happened, before this fire, there was an oil spill in East Los Angeles. Has not been cleaned up. Still there. Oil spill. Just the immediate sort of impact on going into the river. So this community, like others, especially if they're poor, the immigrant communities, working class communities, the things that get built in their areas really could have an impact. We don't even know. Who would have thought? Who would have thought that a coal storage, even with this size, would have created what it's created? And so we're looking forward. We're looking ahead to say, what can we do to make sure that the minimal, the minimal, not the most, the minimal that can be done is to watch out for these families in the future, families in other communities like theirs in the future, who don't have the money to put out up front what it takes. I mean, we were scrambling, scrambling to buy the air purifiers, scrambling to get the masks into people's hands, just scrambling one community, one neighborhood for the other. And then the fire is out, the smoke is done, and what starts to happen is the flies. Swarms and swarms and swarms of flies. Then the rats start coming out. I mean, it is beyond belief. The words cannot describe the stench. the kids were saying when they finally got when they went back to school they missed their summer kids didn't have a summer they couldn't go outside the parents couldn't go outside if they went outside look what they faced they couldn't go inside they don't have air conditioning the best they could do was their purifier just to make sure that it was clean air that they were breathing inside their own homes It just goes on and on and on. And I think all that Assemblymember Gonzalez is proposing is a contingency fund with a max of $20 million. Am I correct? It's not even saying how much. It's just up to $20 million. That's just that one piece. There's much more that should be done. But there's just that one piece to say for the future, that there'll be immediate funding available. We're not scrambling around, you know, asking for dollars here and asking for dollars there, that it actually is there already. So, and of course, and I appreciate Senator Choi's comments about how the settlement income would not be taxed. I'm glad you brought that to our attention in terms of how that was handled. So I think you're very, very nominal, what you were asking for. It's very, very small compared to what that community. And I think more should have been done in this case, and we want to make sure more is done in the future. Hopefully never things like this don't happen again. I appreciate that. We have a motion by Senator Araguin. The motion is due passed to the Committee on Revenue and Taxation. Senator Durazo?

Durazo, aye. Choi?

Choi, no.

Aye.

Ashby? Cervantes?

Cervantes, aye. Laird?

Laird, aye. Sayarto?

Sayarto, no. 4-2. Okay, the bill is out. Thank you all very much for coming and presenting. Thank you all to everyone who participated in public testimony today. If you were not able to testify, please put your comments or suggestions in writing to the Senate Local Government Committee or visit the website. Your suggestions and comments are very important to us. Thank you to everyone for your patience and cooperation. We've concluded the agenda and the Senate Committee on Local Government is adjourned. Thank you, everyone.