Senate Budget Sub2 — 2026-04-09

Senator Reyes?

Senator Choi?

Here.

Thank you for the opportunity to be here today and to share my thoughts about the proposed tax credit for sustainable aviation fuel, or SAF. I'm a professor at UC Berkeley. I have worked on biofuels policy for about 20 years. Air travel is one of the hardest sectors to decarbonize. Among potential technologies, current batteries are too heavy for long-haul flights. Hydrogen takes up too much space. So liquid fuels that can replace the jet fuel that we use are the most viable current option for decarbonizing aviation. I want to say three things regarding this tax credit. The first one is I believe the tax credit would lead to much more SAF coming into the state than what the administration is projecting. Second, SAF is expensive, and therefore an increase in the amount of SAF would come at high cost, both by reducing tax revenue to the state and also by increasing gasoline and diesel prices to drivers. The net reduction in carbon emissions, this is point number three, would be small and expensive. So just quickly, what is SAF? SAF is chemically similar to regular jet fuel, except it's made from vegetable oils or fats. It can be made for vegetable oil, like the oils we buy in the grocery store for cooking. It can be recycled cooking oil collected from restaurants. It could be beef tallow that might otherwise have been fed to live stock. SAF is produced in large facilities, much like oil refineries. In fact some SAF and renewable diesel producing facilities used to be oil refineries So to my first point the tax credit would lead to high SAF production There a lot of potential in the industry right now to produce SAF if the subsidies are big enough, and that's a key point. To my knowledge, six refineries in the United States are currently equipped to produce SAF from vegetable oils or animal fats. If these refineries were to produce at maximum capacity, they could make four to six times more SAF than projected by the administration. They may not choose to produce that much, but they have the capability. In addition, as an alternative to using oils and fats, it's possible to make SAF from ethanol. There's some uncertainty about whether ethanol SAF technology or alcohol-to-jet technology is ready to scale up, but it's another potential source that could come online, and we should consider it. So to project the actual amount of SAF that would be induced by the proposed tax credit, my colleagues and I developed a model that incorporates the tangled web of state and federal policies that affect fuel use. Our model projects SAF production at least double that projected by the administration and up to seven and a half times the administration's projection, depending on how quickly SAF production from ethanol scales up. My second point is that SAF production will be costly for the state budget and for drivers. SAF credit would reduce diesel excise tax receipts by between 20 and 75 percent. Those lost taxes represent money that would not be be available for road construction, for maintenance, and for repairs. In addition, drivers would likely pay more at the pump for gasoline and for diesel because of the cost of complying with the state's low carbon fuel standard would increase. My third and last point, this net reduction in carbon emissions would be small and effective, small and expensive, I'm sorry. Most of the additional SAF that's induced by this tax credit would come from a reduction in renewable diesel. And this is perhaps the most important point here that I want to get across. We would be taking the vegetable oil-based fuel that we are currently putting into trucks and instead putting it into planes. To understand why, we need to know two facts. First, renewable diesel and SAF are between $2 and $5 per gallon more expensive than fossil jet fuel to produce. That means that they are only viable if they have significant subsidies and support. The second relevant fact is that the Federal Renewable Fuel Standard requires a certain quantity of these fuels to be used in the country each year. So, and the federal government program provides subsidies for these fuels. Because they're more expensive than the alternative, then industry is not going to provide more of them than is required under the federal standard. That means if we use more of one, we're going to use less of another. And if I could perhaps use an analogy, imagine somebody who has to drink a gallon of some kind of medicine, at least a gallon of some kind of medicine, and they do not like it. There's red and there's green. They can use any combination of red or green they like, and they have to use at least a gallon. There's no way this person is going to drink more than a gallon because they do not like it. If you pay them a little extra to drink green, they'll drink some more green and correspondingly less red, but they're not going to go over that total of a gallon. And that's the fundamental tension here with SAF and renewable diesel, that incentivizing SAF will tip the balance to mean more SAF but correspondingly less renewable diesel. I also don't believe it's likely that the SAF tax credit would meaningfully save jobs in California because it is available for access to both in-state companies operating in-state and also out-of-state. it's not meaningfully changing the competitive balance between firms that are operating in the state versus out of the state. So in summary, SAF is expensive to produce and would generate few benefits for the climate if incentivized through this particular tax credit. I think promoting it only makes sense if it creates a clear path for future costs and emissions reductions and I think generally when we thinking about climate change we have a finite number of resources to spend and so we need to be thinking about how to spend those most effectively Thank you.

Good morning, Chair and Senators. Helen Kirstein with the Legislative Analyst's Office. So we're recommending rejecting the proposal. Some of the comments I have, I know, have already been referenced or somewhat similar, so I'll try to go through them relatively quickly. There are five main reasons we're recommending rejection. The first is that, according to our analysis, this is a relatively expensive way to decarbonize. So the cost per GHG reduced is relatively high. And we think in general, the state should focus on the more cost-effective approaches to GHG reduction before proceeding to the less cost-effective approaches. The second reason I wanted to highlight is we think there's a lot of uncertainty about the environmental benefits of sustainable aviation fuel, and they could be quite a bit less than are estimated. One of the main reasons is what Dr. Smith referenced just a few minutes ago about this potential substitution of different renewable fuels. So to the extent that this policy resulted in less renewable diesel and more sustainable aviation fuel, basically just switching which renewable fuel, the net environmental benefits would be significantly less. So that's one reason it could be less than estimated. Another reason is that in the literature, there's some disagreement about the level of environmental benefits from these fuels and renewable fuels just more broadly. And part of that the basically how much the environmental impacts of the feedstocks and sort of what they you know if there are indirect land use changes that could occur because of the use of those feedstocks The third reason I wanted to highlight is that we think that there's a lot of uncertainty about the size of this potential tax credit and the according loss in diesel excised tax revenues. So the bigger this tax credit is, the less diesel excised tax revenues the state will have to spend on its programs. We think there's a lot of uncertainty. So we think that's certainly possible that those losses could be less than are estimated by the administration, but we also think they could be quite a bit larger. I know that was also referenced by Dr. Smith as well, but, you know, potentially we think it could be a billion dollars or more of lost revenue, you know, sort of in a worst-case scenario situation. And then fourth, we highlight that we think those reductions in deselect-sized tax revenues will have some implications for transportation programs that rely on those funds. So currently there's a formula that allocates those funds. And so to the extent you have this tax credit, it's going to be less money for those programs. So there are three programs that are affected. One is Caltrans Highway Maintenance Program. It's SHOP program. Another is local streets and roads. So it's the money that goes to cities and counties to do work on their streets and roads. And then also funds go to the Trade Corridor Enhancement Program. And that's a competitive program the state runs. So again, depending on the size of this tax credit, which is unknown, there would be losses accordingly. And then fourth, we wanted to highlight that in our view, this proposal deviates from the spirit of the voter imposed restrictions on transportation fuel taxes. So voters have said a few times at the ballot box, we want to restrict the use of those funds. We want them to go to streets, highways, and certain mass transit activities. So this instead would sort of divert those funds to the aviation sector, which we think is not consistent with the spirit, not necessarily the letter, but the spirit of those restrictions. So those are my comments. Happy to take questions as appropriate.

I have comments and questions, but I'd rather someone else go first.

let's go senator mcnerney well i think i thank the presenters i appreciate the work that went into this um and this is a controversial issue we can see outside there was a lot of folks out there waving cards and showing their passion on this issue which i sort of i appreciate but i want to understand a couple of things um about the feedstock that goes into sustainable aviation fuels, the impact on diesel production, the impact on food costs. We're going to be using ethanol was mentioned. That has an impact on food supply, fertilizers that are used. And then lastly, are forest and ag waste, are those potential feedstocks for this? So, Professor, would you care to take the first stab at this?

I'll turn it over to my colleague from the Air Resources Board. Thanks for that question, Senator. Matthew Boteau with the California Air Resources Board. So a couple of points that I did want to make with respect to feedstock availability and the structure of both the tax credit proposal, but also of our policies here in California, And that is that the way this proposal is designed, it would encourage and support more waste-based feedstocks being used for sustainable aviation fuel. And that is also in alignment with our other biofuels policy here in California that also provides a stronger incentive signal for waste-based feedstocks to be used to produce, whether it be renewable diesel or sustainable aviation fuel. So I think the question that we ask ourselves when we look at a policy like this is, you know, if the incentive is to pull waste-based feedstocks, what's the availability of waste-based feedstocks like used cooking oil or tallow, for instance, to be used as a first-order feedstock as opposed to a crop, for instance, like soy or canola? And so that kind of gets to your question about impacts on food systems. The policy is structured to incentivize waste feedstocks and not feedstocks that would go into the food system as a way to avoid or to help reduce the pressure on the commodities markets. And we did look at publicly available data on waste feedstock availability. And there's kind of both a historical precedent and a future-looking precedent. And that is, historically, we've seen kind of waste-based feedstocks grow to almost triple in availability over the past five years for these types of biofuels. And I think that was unexpected. But what has happened has been enhanced collection from restaurants of waste oils from commercial facilities, both domestically and internationally, to show that supply chain grow pretty significantly. And there's estimates, there's independent estimates showing that there's potential for that to continue to grow to the order of 4 to 10x over the next decade. So this question about, like, is there enough waste feedstock, it's a good question. We seen the private industry kind of respond to these incentive signals to find new creative ways to access those waste feedstocks at cost prices that has driven a bigger supply to be able to meet the demand from the biofuel production So it's a good question, and we continue to evaluate it, but we see availability of those waste feedstocks to meet the increased production demands.

The other question I have relates to highway maintenance and that kind of question. Air travel is going to probably need liquid fuels forever. I mean, maybe batteries will get light enough and enough energy density, but maybe not. We don't know. And meanwhile, we're seeing with EVs and so on, reduction of highway transportation funds. Is this going to affect our ability to maintain our highways and keep people from hitting potholes and calling me and say, hey, let's fix those potholes, you know? I don't know who cares to answer that.

Okay. Lastly, another question that comes to mind is the fairness issue here. Why give significant tax credit to this as opposed to other industries? I don't know. I've been warned I better stick my face in this microphone. So I mean is this fair to the average California consumer average California resident to put this kind of money into this kind of a program

Are there other states that have comparable aviation fuel?

For yielding, it looks like someone else has a comment.

Thank you, Senator. Me? Yes. Okay. Go ahead. Senator Choi.

Thanks, Senator. If you don't mind, I'll maybe take the first question. Matthew was talking from the Air Resources Board. So on the question about comparing sustainable aviation fuel to fossil jet fuel, I think it's a really good one. Depending on how you produce your sustainable aviation fuel, because as we've talked about, You can use waste-based feedstocks, for instance, or maybe crops like soy, for instance. But depending on how you produce that sustainable aviation fuel, it can be anywhere from half to more than 70% reduction in carbon intensity relative to fossil jet fuel. So what we would be talking about here with the tax credit incentive would be to also have a structure that really incentivizes the lowest carbon-intensive SAF to replace that fossil jet fuel. I think you made a couple of other important points, too, with respect to the refineries and to the energy transition and what's happening kind of in California relative to the other states. When we're talking about this potential substitution effect between renewable diesel and sustainable aviation fuel, from my perspective, I'd like to think about this as what is the long-term strategy that California is embarking upon for its energy sector? And for us, when we look into the next 10, 20 years, we talk about how are we going to meet our climate objectives, our legislatively mandated carbon neutrality goals by 2045. We see an ongoing and significant energy transition that has to happen across many sectors, but particularly in the transportation space. And for the on-road fleet, for the heavy-duty fleet right now, they're using predominantly renewable diesel with some fossil diesel to meet that energy demand. That fuel is being produced both here in California and outside of California to meet our on-road energy demand. Over time, we expect that the on-road fleet will transition into zero-emission alternatives, declining overall demand for liquid fuel. It's not going to happen overnight. It's going to take decades, two decades to realize that vision. But there will be a, and what we expect, an ongoing transition to lower liquid fuel demand in the heavy duty in the trucking space. That is not true for the aviation space. We honestly expect that there will be an ongoing growth in liquid fuel demand as we fly more, as we demand more aviation. And that means we need to find options for decarbonizing the aviation sector that are going to largely rely on liquid fuels. And so what we see here is an energy transition happening in California. We see refineries making decisions. They make long-term decisions, 10-plus-year decisions, to invest billions in producing the types of energy that we think we will need here in California. We've had refineries convert into renewable diesel production and SAF production. and we've had refineries do that both in California and outside of California. And so as they look at where the long-term markets are, they're also looking at, okay, where are we going to be producing for the future? And maybe aviation is a good sector for us to produce in because they also see those signals about what going on in the on space So this transition for our energy system is important to make sure that we also you know aligning kind of the incentives where we need to be long term and with the decisions that have been made to convert these refining assets to maintain that reliable supply of fuels that will be needed over the long haul

Happy to. And so California's jet fuel consumption, that 1% number, and I'd have to, you know, I'm going to caveat this, double-check the math, But my understanding is that that number reflects the consumption of jet fuel used for flights that are within California, because we have data on how that emissions derived from those flights that are moving from Southern California to Northern California, for instance. So it is a subset of the total jet fuel that is used and filled into airplanes here in California. We actually use a fair bit more jet fuel than is representative by those numbers, because there are, of course, very busy airports in California, San Francisco, LAX, that fuel and fly internationally that also contribute to global emissions. So that number, I believe, reflects the intrastate flights. Our true jet fuel kind of consumption is much larger. And so the other piece of this is, you know, again, going back to kind of California's long-term vision, And we have a two decade experience here of setting policy that helps provide a guidepost for other jurisdictions looking to decarbonize their sectors. And so this is an opportunity to California to once again establish its leadership role in establishing policies that help support long term deep decarbonization. And so we would hope, and to Senator McNerdy's point, yes, I'm an optimist. I'm a perpetual optimist that we see growth in other jurisdictions in similar policies. As we move to things like electrification, they move on to liquid biofuels to help support ongoing decarbonization in the rest of the country and globally, that we can set that example and that others will follow.

I'm curious, SAF is supposed to be very raw material, stock feed, vegetable oils, or other food products That sounds like it should be much cheaper So is that the process It costing a lot more No it the feedstock So you say to buy say soybean oil 60 cents per pound you need nine pounds to make a gallon of salve

So greenhouse emission difference between the petroleum-based fuel versus SAF is 7%?

So California has no other alternative because we are trying to phase out eventually petroleum-based fuels, right? And what I hear is that the only other alternative is SAF, and no matter how expensive it is. So we are trying to offset by the tax credit, right?

I'm sorry. Can I make one comment real quickly on Professor Smith's? And reinforcing that, he mentioned the ability to produce fuels from hydrogen and electricity and other sources of carbon. That's what we typically refer to as an e-fuel for aviation. It is still the liquid fuel, so it would still be a form of SAF that would be produced. It is much more costly and does rely on very cheap and low carbon electricity, which is not available at this point. So if you could think about, you know, again, coming back to the long term, that there still is the ultimate endpoint on the aviation sector is by and large the liquid fuel. And it's just a question of how can you get that liquid fuel produced with the lowest cost and the lowest carbon possible. And that will require more innovation.

Dr. Troy? Yeah. I think Elio wanted to give a comment regarding that last question you had before you move on to the next one.

You know, so I'm going to simplify. Just a last comment I made about the renewable diesel and heavy trucks they all depend operate on diesel. And so that means that the situation will be the same. the petroleum-based diesel or renewable diesel. And entire nation's production of the renewable diesel are not enough for California alone. So that means how are we going to meet the demand of all these renewable diesel production demands in our state if we continue to try to choke the refinery industry not to operate and get out of our state. That's to me a contradicting policy.

Sound triple excuse. Okay, thank you.

So the tax credit would only be for fuel that is sold into California for use in California. So by nature, the sustainable aviation fuel would then have to be used. I mean, I assume it could just be stored, but the shelf life of sustainable aviation fuel is not particularly long, so there would be challenges there. And so what you're saying is you think the price would float down to the level at which an airline would buy it.

Yeah. So airlines are buying sustainable aviation fuel now. It is it is being sold. But as I mentioned previously, the federal tax credit being decreased. And then there are other policies that that disadvantage sustainable aviation fuel compared to other renewable fuels so depending on the literature that incentive gap could be around a dollar fifty or higher depending on what incentives you're looking at and if I could just add to that I mean it's sustainable aviation fuel you know oh I'm sorry did you know I wasn't quite finished so so when you're looking at that. So that's sort of the other reason for the value of the tax credit of between $1 and $2 is to sort of make up that gap to bring parity between other renewable fuels and sustainable aviation fuel to help decarbonize the aviation sector, as we've heard, is the most difficult to decarbonize sector. And I'll turn it over to Dr. Smith now. Sorry about that. So yeah,

But I really think your point that you made about the target of the policy is a really important one, because right now the way this is set up, it seems to create an incentive for anybody, including the refineries that are set up in the Gulf, for example, to produce sustainable aviation fuel and send it to California. And so if the goal is to create an advantage for those firms operating refineries in California, for Phillips 66 in particular, you want to do something that's going to give them a competitive advantage. And I don't see how this does that. It creates an opportunity for any firm who wants to sell its sustainable aviation fuel to California to do that. And there's the machinations about how they would figure out how to offset the diesel excise tax and there'd be some financial engineering to make that happen. But I think your point is a really good one that if you want to target something, then you should target that thing rather than creating this thing that might have a lot of unintended consequences. I want to ask Elio for a minute, but do you have any response to that point?

Thank you for turning it over to the LAO.

LAO, your response to this one.

It's tied to California jobs. We can actually pull back that money if the company doesn't produce the jobs, doesn't comply with what we want. So that's one example of a program that's explicitly about California jobs and can be very targeted. So, for example, if that were the state's goal is to kind of keep those jobs here and really have it limited to California companies or a California company at least, then we could create a different kind of policy. It might not look exactly like this tax credit. It might be different. But we think there are other tools that could be in the legislature's toolbox to do that. And so, you know, we'd certainly be happy to work with the legislature if that were something that you're interested in doing. Okay. Thank you. And could Department of Finance just address this question? I know the governor cares about roads and potholes and paving. And so, you know, can you just address that directly? Yes. The loss of the money to those important values that we have. Yeah. So the reason maybe I'll back up and the reason why the diesel excise taxes is a tax chosen is because we don't believe that these corporations are very profitable. So they don't have income tax to offset. So this couldn't be sort of another sort of tax credit where you're providing tax credit credits against income tax. And it's not a refundable tax credit. So if you think about like the film tax credit, that's a refundable tax credit that's sort of funded by the general fund. So one of the largest or the largest tax liability for many of these corporations is various motor fuels taxes, one being the diesel excise tax. So obviously roads are very important to the administration. This is sort of a difficult tradeoff. But as you mentioned, you could backfill the lost revenue to make the transportation programs whole, but still be able to provide that incentive. Where that funding would come from would be difficult to do. Obviously, given our general fund situation, sort of where that would come from would be something that would be a difficult conversation to have. But if that was part of the governor's proposal, then we would see that already, right, if there was a backfill proposal? Yeah, it's not part of the proposal, just to be clear. Because of the general fund situation, we have limited other funding sources. As I'm sure we'll talk about in a little while, GGRF is not necessarily a funding source. So there are limited funding sources that we have in order to be able to backfill. Okay. Yeah, I mean, that just remains a major problem. I guess, I mean, what I hear you saying is this, it's essentially a weighing of priorities. This one, the offsetting that would happen is something that we could absorb and in the transportation sector and that this is a higher value for that money. And I don know if I read that read this the same way especially around just the statistics about which you know 1 of GHG coming from aviation And the answer that you gave which was that that's only for in-state flights. I don't know if that's something that LAO agrees with that or. Yeah, that's our understanding as well. But we would note, I think one of the numbers we We couldn't find like a perfect estimate for all of California origin trips. But our understanding is that nationwide aviation is about 3% of GHG emissions. So, again, if you use that as sort of a proxy, yeah, it's probably a little bit more than the one person. It's probably more than the 1% that's in trust state. But it's not this isn't the bulk of GHGs. Right. It's a it's still a relatively small contributor. It may grow over time as we hopefully decarbonize other sectors. And at that point, again, we think we may really have to spend quite a bit of money to try to decarbonize this. But at this point, it's not the driver of GHGs in the state. Right. Yeah. And I guess I do think and this was referenced in the letter that was sent by 36 legislators. I mean, the idea that we're investing in the future, that we're the and I appreciate the context that a lot of our vehicles will eventually probably be on batteries. but a lot of our airplanes probably won't. So we'll need to have a fuel source. I appreciate that and that the future is that we need to be dealing with this and decarbonizing the sector. So, you know, but the reality of the trade-offs and the bang for your buck, how much are you getting for what you're giving up? And I'm having a bit of a struggle around that because of the things that I've talked about. So the last thing that I just wanted to ask is, are we coordinating at all with Washington State around sustainable aviation fuel? Because I know that they have, maybe they're a bit more advanced in this area. And can you just talk about that? So they're more advanced in the fact that they have a sustainable aviation fuel tax credit in place. However, there's a trigger for that sustainable aviation fuel tax credit of, I believe, it's 20 million gallons being produced in the state of Washington. And so it has not been triggered on yet. So I think to this point is that they do have renewable diesel facilities in the state of Washington, and they have not invested to shift to sustainable aviation fuel production, even with that incentive, which is a similar incentive. It's structured the same as what this proposal is. But our proposal wouldn't have a trigger? No. Okay. And what's your understanding of why they have a trigger and why we don't? I think their trigger was because there is no sustainable aviation fuel currently produced in Washington state. So the incentive was to have sustainable aviation fuel be produced at 20 million gallons, which is, I think, a fairly large amount for the state of Washington. Okay. So if we did this, does it affect Washington at all if we move forward with this? I think it would be difficult to sort of piece that together. I mean, there could be some other knock-on effects to the state of Washington, but since their tax credit is not in effect yet, and I don't know if there's any plans for any of the renewable diesel facilities to be converted to sustainable aviation fuel in Washington State or for the creation of another sustainable aviation fuel refinery. So I think it's still maybe too early to tell. Just one quick point on coordination. We do have regular coordination calls and meetings with the state of Washington, both regulators and kind of the folks that are working in the policy space in Washington. And certainly if this were to move forward, we would have frequent communication because we don't want to see a situation where somehow we are setting up a situation of lots of fuel shuffling happening into California that is harming Washington's ability to meet its own climate objectives as well. And we work very closely with them as part of our broader Pacific Coast Collaborative Oregon as well. And this has been a conversation that we have with them. Okay. Yeah. And I mean, because of cap and invest connection, I didn't know if that was somehow implicated in this policy area. No. Okay. Okay. Well, thank you very much. I yield back, Chair. Thank you so much. I really appreciate the comments and the questions from the senators. Did you have another question, Senator? I really appreciate them, and I appreciate the responses and also the rebuttal from each other because there's no perfect answer. And I think that something that the senator mentioned in her comments is, what are we really trying to do? And I think one of the questions then is, how many companies are currently eligible for this tax credit, to your knowledge? Here in California. Yes. So because this proposal leverages existing low-carbon fuel standard, we actually know how many companies have sort of certified pathways that would meet the eligibility. There are four companies that currently have – that produce sustainable aviation fuel that would be eligible. However, the diesel excise tax liability is the other piece where – Big piece. We know that two of the firms do not have any diesel excise tax liability, and the other two do, one of them a small amount, the other one a much larger amount. I think, and going back to the Senator's question, if we are talking about a particular refinery, then we need to be very specific. I mean, we are talking about protecting jobs. We are talking about protecting communities and trying to find a way to do this and being creative. And I understand this fuels, no pun intended, the idea that we need to find something that may help to keep that refinery here in California and keep those jobs going and keep the community's economic base going. And again, we go to the same thing, that perhaps we need to say this is what we're trying to do. Let's find a way to do that, as opposed to saying we're opening this up. And I think the comment was that there are four to six others nationwide who may be poised to take advantage of these incentives. then our money that should go to our roads is now going out of state to produce something that we're hoping would be produced here in California. So a number of factors to consider in this, and that's why I asked how many companies are currently eligible, would be currently eligible for this as this is structured, and I understand there's only one here in California. That's correct. However there are other facilities in the state that could transition to produce sustainable aviation fuel if this proposal were to pass which would then there for example the Martinez refinery had a public they received a grant from the federal government to update their facility in Martinez to produce sustainable aviation fuel They have since put that on hold. It's a potential that if this proposal were to go into place, maybe the Martinez Refinery would continue with their sustainable aviation fuel process at the Martinez Refinery. Okay. Of course. I do want to emphasize that I think it's important that we are thinking really strategically about how our refineries could transition to participate in the green and clean energy future. So having sustainable aviation fuel be a future for a refinery that's currently petroleum-based, you know, is a really good thing to be thinking about. It's exciting, and it does seem like one of the very few options. I don't know how many options there are for refineries to participate in that, but that seems – it is exciting to think of that. So I had a number of negative comments, but I also just wanted to add that in because I think it's important to recognize this. Yeah. Thank you. Yeah, and I think – I mean you're right. When you see all of this sort of capital with billions of dollars were spent to build these things, and then we're just going to let it sit there and not use it for anything, I think it's important and potentially economically beneficial to look at ways both for companies and for people who work in those places. to be able to renew those facilities, but I think this proposal wouldn't achieve that because it's open. So if an out-of-state firm is a lower-cost producer now, then it's still going to be a lower-cost producer under this tax credit, so I don't think you're doing enough or much to really help those operating in California versus outside, if that's your goal. And it seems there would be no assurance that this would keep a refinery in California either, or keep it from shutting down. Any final comments from LAO? Yeah, I think that's absolutely the case. I think that's part of the challenge, right? And I think thinking about these communities, they're real community impacts, I mean, which are both the jobs, and then there are also the emissions impacts there. So they're the tradeoffs, they're the EJ impacts as well. And so those are all the things I think we're going to have to think about as a state, and certainly the legislature will have to wrestle with when it's thinking about this. But really, I think, you know, our advice would be to think about what are your goals? What is that plan? We're in the mid transition, I think, as was referenced by Senator Blakespear. This is a tough time. We're going to have refineries, you know, potentially closing. It's not necessarily going to be at the same pace as our declines in fossil fuel. How does that affect gas prices? How does this fit in with the future of those refineries? And does this actually encourage the transition of some of those refineries even earlier and being less fossil? and then have other impact. I mean, it's complicated. I think if there's one thing that I have taken away from looking at this proposal is how complex it is and how many potential unintended consequences or other consequences that we may not fully appreciate are really a part of this. And so I think that's one of the real challenges in trying to get your head around it. At least it has been for me. So encourage the legislature to think about what the priorities are and then we can try to help work with you to craft the best way to get at those. Thank you. Final comments from the Department of Finance? I would just thank the committee for the questions today As I previously mentioned this is a priority for the governor to help decarbonize the aviation sector We understand that there are criticisms and we're happy to work with the legislature to help craft a more, you know, whether that be a narrow policy or something that still doesn't run afoul of the U.S. Supreme Court decisions, because the last thing we want is to have another sort of legal battle on our hands. We don't want that. Even as an attorney, I don't want that. Final comments, Professor? I think it's two things. We've all talked about the imperative for decarbonization. I think it's important to remember cost, and if we can do things that are less costly to do that, then we should focus on those areas, and this seems like a really costly way to decarbonize. And then the other point just to, again, reiterate is that I think this policy potentially opens up a lot of unintended consequences that may happen, as we heard, that are things that we haven't really thought about because these policies in this industry is so complex. And so I think we need to be cautious on those grounds. Thank you. Final comments from Card? maybe just just one and just appreciate the comments about being in the the mid transition and recognizing the the difficult place that that puts us all in and i will say that um you know it is complex but there are some like fundamental aspects of this transition to think about and that is like the trajectory of um the gasoline pool the diesel pool and the jet fuel pool and how we make sure we have reliable supply for all of those. And historically, they all came out of the refineries. They moved in lockstep. The demand for those fuels all kind of went in the same trajectory and the supply did. They are now disaggregated. We have zero emission vehicles and vehicle efficiency in the gasoline pool. We have potential ZEVs and hydrogen trucks coming in the heavy duty fuel pool. And now we've got an aviation sector. And so thinking about how we maintain reliable fuel supply for each of these major sources of fuel and energy in California is really important. And thinking about what the alternatives are, if we, you know, don't have zero emission or low carbon fuels, we're going to have more fossil. And what's the timeframe of that transition? How long do we want to rely on that fossil fuel? And do we want to rely on more imports or out of state production for either the fossil or the biofuels or the other sources of energy? And these are all aspects of this mid transition that we're in and very much of the view that the best way that we can kind of navigate our way through the transition is to give reliable and kind of affordable alternatives to those fuel sources to support meeting the energy demands of the state. Very good. Thank you so much. Thank you to the panelists. Thank you to my colleagues for the questions and comments. We'd now like to open it up for a public comment. We ask that you give your name, your organization, and we only have two people speaking. We're going to limit it to 30 seconds maximum per person. Wonderful. Thank you. Christina Scringe with the Center for Biological Diversity. We oppose the SAF tax credit. The legislature has not yet fully funded and should first max out funding for cost-effective GHG reduction programs and accelerating equitable clean transportation. As you've noted, the state's been struggling with how to deal with its mid-transition, including how to stabilize an increasingly volatile transportation fuels market and CEC has made clear that demand reductions are critical stabilization strategy. So I really appreciate the comments from the LAO and from Dr Smith as well as Blakespeare thinking about what we losing with this Thank you Thank you You went a little over the 30 seconds We won put that alarm on Thank you. I'm Dan Lashoff, a senior fellow with World Resources Institute. We oppose the governor's proposal because it's the wrong way to accomplish two important goals that we discussed, decarbonizing aviation and providing a just transition for refinery workers and managing that transition. It won't reduce net emissions for the reasons Dr. Smith explained. It will just shift use of a very limited waste resource from renewable diesel to aviation with no net benefits. Second, it is the wrong way and extremely expensive way to try to protect workers. We should do it directly. Thank you. I appreciate your comments. Thank you. You don't have to take up the whole 30 seconds. Thank you, Chair, Senators. panelists. My name is Gary Hughes. I work as a co-director with the international organization Biofuel Watch. And first off, definitely in solidarity with the workers. We are in a serious dilemma, but it's a result of the can being kicked down the road. There are a lot of environmental harms associated with liquid biofuels. And I think that whole thing has been kind of downplayed in the discussion. So we know that the benefits are not worth the harms. And something does have to be done about what's going on with the unmanaged transition that we're living in the state. Thank you. Good afternoon, Chair and members. My name is Travis Bertout. I am a USW Local 326 member at the Rodeo Renewable Energy Complex, and I am in support of this incentive program. Thank you. Thank you, sir. Hello, Chair and members. My name is Felix Luna, a proud member of United Steelworkers Local 326, Joint Health and Safety Committee Chair, and resident of Vacaville in Solano County. Supporting the California SAF incentives keeps California economy strong and positions the state as a leader in green energy innovation by keeping well-paying jobs in our state and keeping well-trained and experienced operators, technicians, and straight persons employed. I thank you all favorably for considering the SAF incentives. Thank you. Chair and distinguished members, my name is Nick Vigil from Vallejo in Salon County. I'm proud to stand before you today in strong support of the governor's sustainable aviation fuel incentive. I respectfully urge you to support this effort and help build a healthier, more sustainable future for all Californians. Thank you. Thank you. Madam Chair and members, SRDS on behalf of P66 here in support of the tax credit. sends a clear message that the state is serious about keeping fuel production and the jobs that come with it in-state rather than losing their investment to competing markets. For companies like P66, these are long-term capital intensive decisions, and this type of incentive helps anchor those investments here. Lastly, we agree that an amendment is needed to focus the tax credit to fuel produced and sold in California. This can significantly limit the impact on the road construction and maintenance. Thank you. Thank you. Good afternoon, Chair and members. My name is Jared Whittree. I am the Director of Operations for the Rodeo Renewable Energy Complex. One item I'd like to challenge on the LEO and the House report is the increase in gasoline prices. With the methods of producing SAF, you actually make more gasoline-range materials, so that would increase the supply of gasoline to the state. So I respectfully ask that you support the Governor's incentive for SAF tax. Thank you. Thank you. Good afternoon, chair and members. Thank you for having me today. My name is Tony Ivenenko. I'm a resident of Concord in the Contra Costa County. I would like to ask you all to support the staff incentive today. It helps support well-paying jobs in the California economy and also provides a good market for green energy. So I highly ask you to support this incentive. Thank you. Thank you. Good afternoon. I am Rene Streber. I'm a resident of Alameda in Alameda County. I'm also an employee at Phillips 66 Refinery. I'm here to request the support of the sustainable aviation fuels. Thank you, sir. Hello, my name is Evan Jones. I live in Berkeley, California. I work at the Rodeo Renewable Energy Complex. Really proud to have a good-paying job in the energy sector here, green energy sector now. So please consider passing the incentive. Thank you. Thank you. Good morning, Madam Chair and members. My name is Derek Vines. I'm also an employee at Phillips 66 Rodeo Renewable Energy Complex. I'm a longtime member of the community there in Rodeo since 1974. I have family, two brothers that were operators there at the facility. I've seen what this facility has done for the community and for the families that have lived in the community and the opportunities, the economic opportunities that they provided for families in the community. The members live in three different districts. In short, I support the tax incentive and hope that you do as well. Thank you. Thank you. Hello, everyone. My name is Eddie Castaneda. I live in Pittsburgh, California. I'm a proud apprentice for Local 342. I started my career three years ago. Phillips 66 has helped me support my family for those three years. SAF will keep my career and my family moving forward in a positive direction. Thank you. Thank you. Good afternoon, Chair and Committee members. My name is Sanjay Prasad. I live in Hercules, California, which is in the Contra Costa County. I'm here to support our governor's incentive on the SAF. Please join me and my family. We care for the environment. We want our kids and future kids to breathe clean air. So please, I appreciate if you can support that pass the bill. Thank you. Thank you. Hello, my name is Paul Hollidge. I also work at the Rodeo Energy Complex there. We are making sustainable fuels. I appreciate the professor's encouragement about carbon fuels, But we have we were a carbon fuel complex. We have switched over sustainable fuel because the governor and we believe in clean air and clean aviation fuel. Please go ahead and continue to support our community and support this because we have to have a way, a segue into going to clean fuels. And we've done this at our refinery to keep it going. Thank you. Good morning. Tim Sabrani, Contra Costa Building Construction Trades Council here to speak in support of SAF. I also want to say our members, we do local streets and roads. So we care about that too We think that a false choice We think there ways that we can do both And also just want to say you know let not lose sight of the bigger picture This is something not in the abstract to decrease greenhouse gas emissions something we can do today. And we can protect good union jobs while we do it. Let's not overthink this. I thought the gentleman from CARB did a fantastic job outlining the benefits. And I hope the committee takes that into consideration. And we should keep it in state. Thank you. Thank you. Good afternoon, Madam Chair, members of the subcommittee. My name is Graham Noyes. I'm a fuel and carbon attorney. I've been working for 10 years for dedicated SAF producers who have built this industry. I'd like to make clear this is not a SAF incentive. This is a P66 bailout bill. To make this a great SAF tax credit, the tax credit should be transferable and available or available to all producers. and the life cycle analysis should be tech neutral and follow the Inflation Reduction Act 45Z and Corsia approaches. Thank you. Thank you. Good morning, panel. My name is Dorio Anderson. I'm a resident of Fairfield, California. I'm here to support the SAF tax incentive only because it not only supports jobs, open jobs, but I believe California always speaks about being a green state, and I believe this is a step in the right direction. So if we want to make California green, let's go ahead and make the right choice. Thank you. Thank you. Good afternoon. My name is Tommy. I live in Solano County. The SAF incentive isn't only about investing in credits. It's about reducing the carbon emissions and standing behind the bar that was set for the long term goal. It's about securing California's leadership in clean energy and creating jobs with future technology. Please stand with us and support SAF to keep active and potential renewable energy complexes in California. Thank you. Thank you. Hello, board. My name is Scott Christopherson. I'm a resident of Contra Costa County and a Phillips 66 employee. I asked you guys to consider not only Phillips 66 contribution and what they've already contributed into what you guys have asked them to or not you guys, but California as a whole on the carbon footprint. Right. So they've already invested billions of dollars on the conversion. And then it just seems that we're not getting the support by following those rules. So please consider the efforts and also the job placement for, you know, that community as a whole. Very, very stable, you know, income. And as it is. Your time's up. Okay. Thank you. Sorry. Support it. You want us to support it? Yes, support it. Thank you. Thank you, sir. morning chair members my name is Trevor Russell I'm a third-generation family member that works at P 66 and I'm asking you guys support that bill please thank you my name is Ralph Walter I live in Elsa Branny California in Contra Costa County I've been an employee of the Phillips 66 refinery please support this bill it makes a big difference to the communities these jobs are generational the spread of wealth through the communities is going to be hard to measure. You may have a real measuring stick in Benicia here pretty soon. It's not pretty when a big industry leaves. I grew up in the Bay Area. There was industries like this everywhere. They're gone. These jobs are going away, and they make a big difference for people. Thank you, sir. Good afternoon, panel. My name is Johan Maddox. I live in Fairfield, California. I grew up in Contra Costa County. I've been in the United Refinery for the last 37-plus years, and I here to help support the SAF program and hope you going to do the same It opened up a lot of jobs I see a lot of new faces new people in and out and it's been taking care of my family for a year. So I hope you guys can stand behind it. Thank you, sir. Good morning, board member. My name is Aaron Yarbrough. I reside in Walnut Creek, California. I just wanted to say I was listening to the hearing earlier, and there were questions about the difference between the SAF and the fossil fuels. Well, it has the, when burned, it releases new CO2 into the atmosphere, which that carbon was previously locked away, but now it adds to the total atmosphere carbon. But the SAF is made of carbon, sources like plants, waste oils, agriculture residue, and plants absorb CO2 in the area while growing, and they send it back out. It's recycled. You want us to support it or not support it? Support it.

Thank you.

Thank you. Thank you.

Thank you.

Thank you. Thank you, ma'am.

Thank you, sir.

Thank you.

Thank you.

Thank you.

Thank you.

a cleaner future. I urge you to support. Thank you. Thank you. Good afternoon, Chair Members.

staff program for good jobs and a clean future. Please support it with us. Thank you. Thank you.

Thank you.

Thank you. Thank you.

Thank you. Where did you say you work?

Thank you.

Thank you. Thank you.

Thank you. Thank you.

So thank you. Thank you.

Thank you very much. Thank you.

Thank you. Thank you.

Thank you.

Thank you. Thank you.

Thank you, sir.

Thank you.

Thank you. Thank you.

Thank you.

We don't have other alternatives. Thank you.

Thank you. Thank you.

Thank you.

Thank you.

Thank you.

Thank you. Thank you.

Thank you. Thank you.

Thank you so much. Thank you.

Thank you. Thank you.

Thank you. Thank you.

Thank you. Thank you.

Thank you. Thank you. Good afternoon, Madam Chair and members of WFEDNCLE here on behalf of Southwest

industry on track to meet its greenhouse gas emissions goals. Thank you. Thank you.

the sustainable aviation fuel tax. Thank you. Thank you.

Thank you.

Thank you. Thank you.

Thank you. Thank you.

Thank you. Thank you, sir.

Thank you. Thank you.

Thank you. Thank you.

Thank you.

Thanks. Anyone else wishing to provide a public comment on issue number one? Saying none, this concludes issue number one. Did I hear applause? A very important topic, and I appreciate everyone's participation in it. Thank you. We'd like to now move to... Issue number two. Greenhouse Gas Reduction Fund Expenditure Plan and Trailer Bill Language. First we're going to hear from Brandon Merritt from the Department of Finance, who will present the Governor's proposal. And then from Helen Kirstein from the Legislative Analyst's Office.

Thank you. Elio?

Thank you. Very good. Let's bring it back to the dice. you looking at me there so i guess i start off Last year we were fighting over whether we were going to move forward with the GDR program This year now it looks like we have to decide how we're going to spend the money. My first question is to the LAO. How confident are we of that $3.8 billion income? Or is that something I should be aiming at? Andrew.

Okay. Well, that's not the good news we were hoping for. Where's our optimistic guy from CARB here?

Yes, thank you.

Yeah, so I mean the administration continues to support transit. Recently, there was the efforts to provide the short-term loan for transit operators in the Bay Area. There's still additional funding that's been provided for transit, just not sort of the full amount. There are billions of dollars that have been provided over the last few years from GGRF and General Fund. I'll turn it over to my colleague that covers the transportation and transit assignment to provide more detail. James Moore with finance.

Okay. Yeah, I mean, I'll just, I do want to acknowledge that there was an enormous amount of money. I mean, I thought it was $5 billion, not $8 billion, but an enormous amount of money went to transit agencies. And part of that was the SB 125 funding that was paired with the Transit Transformation Task Force, which was led by the transit. CalSTA and produced an incredibly underwhelming report, which has not resulted in any legislation. So having the Transit Transformation Task Force, led by the state, by essentially the executive branch, come up with things that we already know, identifying we don't have a stable revenue stream, we need better interoperability between transit agencies, we need to invest in clean energy, The sorts of things that we already know, to me, it doesn't mean that the work is done. It means that we didn't quite get there. So if as a state we do value transit, we need to be thinking in an energetic way about how we're going to have reforms on the – which was the point of the Transformation Task Force, the reforms on the operation of transit, but then also the balance of how much money are we providing for new equipment. If new equipment is driving around and it's clean, but there's nobody in it, or it's so infrequent and it's so unreliable that no one takes it. You know, these are all the really important questions that we have to get to in order to make transit successful. But, you know, it is a really important when you think about the ways to create GHG reductions and also to improve community well-being. having a better functioning transit system is a really key part of that. So the administration and the legislature together saying this is something we prioritize and we want to figure out how can we have the reforms we need and also fund it at an appropriate level instead of just saying, well, we funded it and now it's dropping off a cliff. And I recognize that the Bay Area got together and said we would like to request a loan. And after a lot of back and forth and hand wringing, the state is giving them a loan. But that's still not handling the rest of the state, and it's only a loan. And so it is – that's not exactly a bold investment, I guess I would say, a loan to the Bay Area transit agencies. So I would just continue to advocate for us to be more muscular, more committed, more verbal, more invested in our transit system. And, you know, a series of decisions that go across this item and then the item before that are resulting in less money and less money for transit and no reforms on operations, you know, just to me is not indicating where we want to be going. So I would just continue to say that I hope our North Star can shift a little bit. You know, I do note that there's $115 million to create a new light duty ZEV incentive program. You know, that's a new program in the same area where we already have other programs in that area. So, you know, that's a decision that's being proposed by the governor's office to do that instead of to invest more in transit and in any of the different ways that could be possible. So I am concerned about the new programs. The LAOs references that, that we should have a very high bar to say we want new programs. So this new light-duty ZEV incentive program to me is something that I don't know if I would identify as the top priority, given very limited and reduced revenues in this area. But, you know, I mean, I welcome any responses to that, but it does seem to me like what we've done isn't quite enough, and it doesn't mean that our work's over.

Thank you.

An overall question I want to ask. What was anticipated from the auction? When this was put together, what was the dollar amount that we were anticipating?

Okay. So there was a particular amount that was anticipated, and then we went through the numbers trying to figure out Tier 1, Tier 2, Tier 3. But tier one I want to talk specifically on tier one and I come back to that anticipated amount from the auction at a later time But on tier one on state operations it includes a wide range of departments far beyond the cost of CARB implementing GGRF Would you please provide some examples of what is funded at Kelfire and Conservation Corps with this money? A little more specificity, as was noted earlier.

I may have some questions or maybe my colleagues will, but I'm talking specifically about state ops. Yeah, so that's previous budget change proposals that the legislature has approved for various departments. I don't believe that CAL FIRE or the Conservation Corps, I think maybe referring to the state responsibility area fee backfill, I think there's some small amounts for CAL FIRE and the Conservation Corps, but these are largely BCPs that have been approved over the years by the legislature that support various staff.

CAL FIRE receives $10 million from that. Is that correct?

Yeah.

Correct.

Yes.

What about the California Conservation Corps?

And is there ever any ongoing reviews of these costs and whether GGRF is the appropriate fund source for these?

we're talking specifically about GGRF and talking about whether it is appropriate to use GGRF money for those expenses And these are decisions that we made we that we in the legislature have made they been appropriated through the budget through budget change proposals And I understand they appropriated through the budget but specifically for GGRF

The pro rata also, as noted, is quite high. Is this proportional to the revenues generated by the fund?

I think this causes more confusion even as we're speaking. My question then would be what avenues does the legislature have in auditing and reviewing what is included in this pot of spending, specifically for, as we're talking about state operations?

State operations.

I would ask the same question of LAO about auditing and reviewing of what's included in this particular pot of money.

So does that change how you view this framework?

and I appreciate the offer to provide greater detail we accept that offer we in fact are requesting it in order to fully understand what it is we are including in Tier 1 because, as is noted, as is noted, whatever is in Tier 1 takes money away from whatever would be, we would assume, in Tier 2 and Tier 3. In fact, it doesn't take, Tier 2 remains the same. It's Tier 3 that suffers through this process. And I think that it's really important to know what we're including as Tier 1, which means it takes top priority. And the legislature would like to know what the governor's proposal is on Tier 1, on all the tiers, of course, but the others are a little more explicit. But in Tier 1 what is being included Because we anticipate that what is included this year it going to be presumed next year that it was okay this year when we talking about Tier 1 Tier 2 Tier 3 So that is something we do want more specificity in that regard.

Or go to tier three. The issue is whether it warrants being tier one. That is really what the first issue is. This is the governor's proposal. We want to look at it in its entirety to see what it is GGRF funding was meant for and whether we are using that money for the intention for which it was supposed to be. And I think that is the entire purpose. My colleagues expect this committee to be able to give recommendations. Our PT expects this committee to give recommendations. And without the specificity that we need, it is difficult to then make those recommendations.

Secondly, again, I would just note SB 840 notes that any state operations appropriating the budget should reduce the amount for Tier 3. So we've taken a more narrow approach.

And we understand, but the Department of Finance is making a judgment call on what should be included in Tier 1. Which is a lower amount. It brings us back to the very same basic question, and I think that is what we're trying to understand.

AB 102 included intent language that if the general fund is not projected to be in a deficit in 2627, that only $500 million would be used to cover general fund costs rather than $1.25 billion, which is being proposed here. Given recent months' revenues and this increase in revenue that we all welcome, does the administration expect to update the GGRF expenditure plan accordingly?

Is that something that will be considered?

Well, let me ask Elio, any additional funds on using GGRF to backfill general fund given the updated revenue estimates?

Okay, on issue number three on the zero emission vehicle incentive proposal, I know there was a question earlier, but can you explain the need to create this new program to deploy ZEVS? There are existing successful programs like Clean Cars for All, which have had positive impacts on low-income consumers that would benefit from more funds. What do you know?

Very good.

Thank you so much, Chair.

Would you respond to the LAO's concerns? Absolutely. I think to start, it would be important just to lay out the problem that this proposal attempts to address. I obviously mentioned the expiration of the federal tax credit. When you actually look at the impact that that has had on ZEV sales in California, it's significant. So the third quarter of last year, ZEV sales were at the highest. We've seen 29 percent. So that's almost one in three cars coming off the water, zero emission. A lot of that driven by folks trying to run and take advantage of that tax credit. In the fourth quarter, that dropped to 19%. But when you drill down further, it paints a more dire picture. That first month in October was juiced a little bit from folks running to get the tax credit. In November and December, you see 13% and 15% respectively in terms of the ZEV sale percentages. We haven't seen levels this low in five years. And so I think it just underscores that right now we are at a very critical moment where we have seen ZEV sales increase almost quarter over quarter for the last decade because of the investments that California has made. And this is a significant backslide. So this proposal is intended to help maintain that momentum by expanding the ZEV market. And what I mean by that is it's highly focused on reaching first-time ZEV buyers because, as I mentioned, once they have that experience, they tend to become lifelong ZEV buyers. In terms of I appreciate the LEO's perspective on, you know, details that need to be worked out. As she mentioned, we are going through a public process to be able to determine those details. We just had a workshop last month where we got a lot of good input. We plan to do another workshop in early summer, so that way these details are available to the legislature before the budget is decided. In terms of the incentive amount, we are looking at. range of between $1,500, and that would be both with the state and the OEM contribution, up to a full replacement of what the feds provided at $7,500. We think that the reality is the sweet spot is probably somewhere in the middle. In terms of criticism that the incentive amount is modest, I don't think that's the right way to think about it. It's really about is the incentive amount effective. And research shows, there's a really important study out of MIT, it shows that for every thousand dollars that you put on incentives, you change sale price 6%. So we know incentives work. Of course, there's a little bit of magic in figuring out what that right amount is. But at the end of the day, being able to focus on those first-time buyers, even a modest amount, we know will be effective, we are hoping that we'll be able to influence this market and not backslide and be able to maintain that momentum that we need to see.

Great questions.

Fast? Let me stop you for a moment. To get the money out there this year, you just had your first workshop. You're just putting together the regs that you're going to be using to get the money out there without going through this process with your first workshop only under your belt. We're looking at a may revise a budget by June. How would you do it? We're in April.

that I have lots of questions, and I read through the bill language, the proposed language, and I have even more questions and I know that you had your first workshop and I appreciate that. There is the possibility still of price gouging. You give the incentive to the manufacturer and you anticipate that it's going to be two for one. But it depends on what the manufacturer suggested retail price is. But how do you ensure that and how do you hold the manufacturers accountable for applying that rebate and reducing the price of the vehicle in the first place?

Okay. As a follow-up, how many manufacturers are you working with?

And I know that there have been questions around, well, how do you decide how much money does each OEM get?

Okay. Now talking about leasing, car leases, providing incentives for those who are interested in leasing rather than purchasing, is this something that is being considered? Because if you have new car leases, those then become those used cars that can be a path for somebody to be a new car user.

Very good. In my last question, since I've been here in the legislature, I've tried to emphasize the use of and the incentives for medium and heavy-duty vehicles, because they are the ones that are providing – it's trying to clean up our air. We're going to have better luck if we're working with medium and heavy duty versus light duty vehicles. What about something to consider because of the budget constraints that we have is funding for medium and heavy duty vehicles through programs such as a clean truck through HVIP.

So something that I think that the administration should consider with such a limited budget to try to figure out what provides the greatest benefit to our community.

I worked on the reauthorization last year, so I'm very well aware of that. But there's no money now, just as there's no money for the clean vehicles, clean cars for all. And these are programs that have been successful. And I think we've talked about this in prior hearings that if something is successful, why are we trying to do something different? Just something to consider. Very good.

Brandon Merrick Department of Finance so the bi-directional EV charging proposal CARB is requesting limited term funding for 26 27 27 28 in the amount of 1.1 million dollars air pollution control fund and for limited term positions and accompanying trailer bill language to make statutory changes to implement SB 59. And happy to take any further questions.

Nothing to add. I'm happy to answer any questions you might have.

So we don't have any specific concerns with the proposal, but we did want to highlight for the committee that this undoes a change that was made in the policy process through this bill, as it was going through the policy process, the administering agency was changed and this would change it back. So I know that's sometimes a concern for the legislature. I think that was done on the Assembly side, but just wanted to make sure that was clear and highlighted in case it is a concern.

Elil? So no specific comments or concerns except just to highlight that this and the other, the next couple of items are all ones that are funded at least in part by that tier one. So just wanted to kind of. Oh, the state operations. Yeah, state operations.

Nothing to add.

Since passage of 617, this has been, something has been very important. and I was probably one of the last of the joint authors of that particular bill, having the personnel to make sure that it's not just preparing themselves Reports because the reports have already been prepared by the communities. If we don't implement them, they are worthless. The communities have suffered tremendously, and that is why 617 was passed, to shed light on what they are suffering. It's been documented now. The plans have been put together, and the plans sit there, which brings us to Tier 3, which becomes a problem because instead of 250, which was supposed to be what AB 617 implementation was supposed to be, it's down to 177. 250 was a number that was selected specifically to help to not only implement those plans that have been put together by the community, the SERPs, but also to add additional communities that are suffering because of this pollution that they are suffering under. It's not every community. There are certain communities that are suffering more than others. If approved, how many CARB staff in total would be working on AB617 implementation? And can you talk about why implementation is not absorbable in the existing staff level?

So 75 people, staff members were included initially. 19 communities in total has not been increased.

Yes. But those plans have not been implemented until now they will be implemented. Is that correct?

Yes. Is there a long-term plan for the post-implementation of these SERPs?

What is the transition? What is that transition from existing SERPs to having those completed and then being able to bring in new communities? Because that's the plan, right?

Thank you.

Further comments? All right, let's move on to issue number six, cap and investment implementation of AB 1207 and SB 840. Okay. California Air Resources Board requests a total of $3.64 million and 10 permanent positions in 2627 and ongoing, which is composed of $2.7 million cost of implementation account and $871,000 greenhouse gas reduction fund. to implement the updated regulations and program requirements from the reauthorized Cap and Invest program, consistent with AB 1207 and SBA 40. Happy to answer any further questions. Thank you.

Thank you.

SB840 requires CARP to use best available science. How does the department define this?

Very good. Thank you.

Good afternoon, Madam Chair. Thank you for having us.

Finally. My name is Abby Edwards. I'm the Senior Deputy Director at the Governor's Office of Land Use and Climate Innovation. It's an honor to be here to represent LCI as well as the Natural Resources Agency and the Energy Commission, who have been key partners on the California Climate Change Assessments. As we know, California is on a trajectory toward hotter, drier, and more extreme conditions. And while climate projections do not point to a single predetermined outcome, they show a range of possible futures. And which path we follow is still shaped by the decisions and policies that we put in place today. That window to change course will not remain open indefinitely which is why as climate accelerates so must the tools the information and resources we use to protect people and strengthen California resilience So that's really the exact role of the California climate change assessments. So jointly with the Natural Resources Agency, the Energy Commission, and LCI, we're requesting $9.9 million from the Greenhouse Gas Reduction Fund over five years to implement the California 6 Climate Change Assessment and deliver statewide scientific resources critical to informing climate risk reduction in the state. This $9.9 million BCP represents the absolute minimum level of funding needed to maintain the core functions of the climate assessment and deliver the six assessment on time as required by statute. This ask includes $6.1 million for LCI to deliver the assessments, the regional reports, the data and tool management, tribal and community engagement, expert review, editing, and strategic communications, $2.3 million to the Energy Commission to advance a third round of the Tribal Research Grant Program, Expanding Tribally-Led Climate Research, and $1.5 million to CNRA to fund original research addressing the state's most critical climate knowledge gaps. With consideration for the tight budget year ahead, we've developed a scaled-back Sixth Assessment that still advances our Climate Science Foundation and leverages the momentum and the partnerships built through the Fifth Assessment. I'm joined by CDC and CNRA, and we're happy to answer any questions you may have.

Elio? So just a couple quick comments. We think this proposal highlights a couple of the issues that we've been talking to the committee about. One is on that state ops tier one. So this is climate related, but it's not permanent state staff. It's sort of a short term proposal. So there's some staffing that would be limited term. And then there's also some sort of non-staff related pieces of it. So I think one of the questions is, you know, this isn't, it doesn't have quite as clear of a nexus to like has to be in that tier one state ops as some of the other proposals. So really thinking about does this fit with what you think that funding should be used for? Or is there another funding source that you would like to use? And then the second is, we have pointed this out as one of the potential example of a potential type of proposal that you could think about funding. We think you could potentially fund a little bit less. There is some, for example, there's research funding in here. You know, you could probably change the amount of research you fund and you could still get a useful assessment. Would it be quite as good? Maybe not, but there's probably some flexibility there. So depending on what your budget priorities are, we think there could be some give there. So happy to take questions at the appropriate time.

I'm happy to take that question. Courtney Massingale, Department of Finance. So this will be coming from Tier 1. It's a state operations cost required by legislation, and it fits and aligns with GGRF enabling statute and SB 840. Given the considerations of the general fund in the state, we think GGRF is the most appropriate funding source, but we're, you know, open to other considerations. But, you know, through our analysis, we didn't identify any other funding sources that were more appropriate.

Yeah, of course. Happy to. And I can start, and then Jen Phillips from CNRA can add as well. You know, there's a lot. We could spend a lot of time sort of on the use cases of the past assessments and how it's informing decision-making. State agencies are pointing to Cal ADAP, which is a website that houses all the data and the projections generated by the assessments. It's a required resource for grant applications, for planning infrastructure, implementation. Lots of state agencies sort of point to this data as the best available science. The California Public Utilities Commission has used this for their adaptation rulemaking as the trusted source to implement their different planning and their planning. The Department of Water Resources used the fourth assessment in their vulnerability assessments and state water delivery capacity report to inform how communities.

So it's a great, great question.

I think something that's unique about the fifth assessment is this community participatory engagement model, where at the beginning of the fifth assessment, the team went out and spent a lot of time doing engagement across the state, working with community to identify research gaps that they could help kind of fill into the research process. And so by doing a lot of that listening, they helped identify over 600 research priorities. And then it was scaled down, of course, to the around 26 priorities that we were able to identify. But this model of the community engagement being able to fit into the research is a model that doesn't necessarily exist elsewhere. And it's a time where we're able to inform the researchers to do the science and then make sure that the community sees themselves in the process. And this is sort of a new model that the fifth assessment does that we're really excited to continue into the sixth assessment. And we're seeing that identify, be able to identify different topical reports as well. So as a part of the portfolio for the fifth assessment, we have topical reports, one on environmental justice and equity, one that's tribally led, one that's on the economic impacts of climate change, and then another on human-induced climate migration. And all of these topical reports were really identified through the community engagement to help see what are the key questions that they want answered and how can that inform sort of the decision making on the local level. And we're seeing sort of the regional reports that come out of the fifth assessment as well really help inform communities that need to do the planning for climate change ahead. And being able to have that downscaled data to that level and the regional reports to help inform decision makings is really crucial So we seeing a lot especially coming out through the fifth assessment that will be coming out as well to help inform

Yeah, so as I mentioned, sort of this kind of engagement process through the first time around, the team identified 600 research priorities, and we're only able to focus on 25 or 26 of those. So there's a huge kind of wealth of information on gaps that could be filled. And so while we were able to focus on some for the fifth assessment, this proposal would really help build the momentum and continue that gap analysis.

And so this continuity, being able to continue that into the sixth assessment is really important. I don't know, John, if you had anything you want to add.

I changed my mind. I would just underscore what Abby is sharing, and I think the first year of the assessment, the sixth assessment, is all about doing that interagency gap analysis and needs assessment, but also doing that with the UCs, the CSUs, other academic partners and researchers to make sure it is truly not duplicative. And we're just filling those very critical gaps that will really kind of drive forward on decision-making and action.

Yeah, so as I mentioned, so during the fifth assessment, the team in the very beginning divided the state into nine different regions. And as a part of that process, there will be nine regional reports coming from that worked with the authors, community-based organizations, researchers in those regions to uplift the findings, the priorities, all through these regional reports. So we have the whole state covered through this assessment. And then all of those findings will be uplifted into a statewide report as well. And then, as I mentioned, we have those topical reports, too, that all will be reflective of the entirety of the state.

We are weeks away from rolling out.

Amazing. I'd be happy to share that.

I would be happy to share that.

Thank you.

Mars Wu with the Green Lightning Institute, also giving comment on behalf of the Center for Biological Diversity. First of all thank you so much Chair Reyes Really appreciate your questions that you shared during the hearing on issue three which we share We want to emphasize that we should be prioritizing California limited dollars for supporting low income and disadvantaged communities who have the highest barriers towards accessing clean transportation That means prioritizing funding for existing equity centered programs like Clean Cars for All, medium heavy duty programs like HRIP. And that also means putting equity parameters, including income caps, lower MSRP caps, and incentive stacking on the proposed new light-duty incentive. If, as CARB said, affordability is –

Thank you.

Thank you.

Thank you so much.

Time's up.

Thank you. Thank you.

That's the alarm saying 30 seconds are up. 30 seconds is fast. It is. It is. And we appreciate so much that you all were here to listen to the testimony, and we appreciate that you're here also to give public comment. Thank you so much. Thank you, Madam. Good afternoon, Madam Chair. Brooke Rose with the Wildfire Solutions Coalition, and I am commenting on behalf of our coalition members, Sierra Business Council, Association of California Water Agencies, California Farm Bureau, Rural County Representatives of California, Save the Redwoods League, Climate and Wildfire Institute, Mountain Counties Water Resources Association, Regenerative Forest Solutions, and Tahoe City Public Utility District. We are here in support of issue number two, and we want to urge the legislature to restore the $200 million from GGRF set aside for wildfire that was established in SB 901. GGRF should be prioritized for critical climate resilience investments, while the general fund is more appropriate for CAL FIRE backfill. Thank you. Thank you. So I was part of that initial conference committee for 901. So I'm very familiar with it. Thank you. Good afternoon, Chair Reyes. Megan Cleveland with the Nature Conservancy. Just here to provide comments on issue two First TNC appreciates the legislature and the administration recognizing the importance of nature solutions in reaching our climate goals in the cap and invest reauthorization language particularly adding NBS as a priority for GJRF investments We respectfully request that the legislature consider appropriating $250 million for GJRF funding from Tier 2 discretionary funding to the California Natural Resources Agency to support the achievement of the nature-based climate solutions targets. and then just echo the comments from my colleague with the Wildfire Solutions Coalition. Thank you. Good afternoon. Steve Wallach here on behalf of the Alameda Contra Costa Transit District, Napa Valley Transportation Authority, Foothill Transit, Golden Gate Bridge District, and Cal Act to urge your support for continuing to live up to or maintain the commitment made for the zero emission transit capital program and to provide funding to backfill for the Tier 3 funds. There's money there in the interest income and rollover funds to do that. And then also on behalf of the Centers for Transportation and Environment, we urge you to at least examine the need for funding for demonstration programs for zero emission hydrogen buses, particularly bus purchases and for the hydrogen fuel production. Thank you. Very good. Thank you. Good afternoon, Madam Chair. I'm Scott Cox on behalf of CalSTART and the Electric Vehicle Charging Association. Thank you for your time. My comment spans issues two and three. We support a revised budget that maintains the legislature's discretion in the Greenhouse Gas Reduction Fund Tier 2 priorities, including entering fund balance and interest income, more aligned with the intent of SB 840 to support the governor's light-duty incentive and an all-of-sector approach supporting medium- and heavy-duty vehicles, charging infrastructure, and community mobility options. California's portfolio of programs remains a critical part of a better managed and more affordable energy transition. Thank you. Thank you. Good afternoon, Chair Reyes. My name is Maggie Field with Ceres. We're a national nonprofit working with major investors and companies to advance policies to build a cleaner economy. Many of these companies who supported reauthorization of California's cap and invest program. On issue two and six, we strongly support CARB's implementation of a robust cap and invest program this year, along with funding for CARB and CPC staffing to implement AB 1207 and SB 840, Timely, well-resourced implementation is essential to maintaining market certainty. We also urge protecting the integrity of SB 840's funding structure, even amid budget pressures. And on ZEVS, we support the $200 million in funding, but recommend stronger equity targeting and prioritizing robust funding for medium-heavy-duty ZEV programs like HVIP and Clean Cars for All. Thank you. Thank you. Good afternoon, Chair. Kirk Blackburn here on behalf of the San Diego Association of Governments, or SANDAG, which offers the following comments on several GGRF funding items. First, SANDAG supports efforts to modernize the Affordable Housing and Sustainable Communities Program, including dedicating flexible funds to support infrastructure investments aligned with regional priorities. Next, SANDAG supports SB 840's proposed $125 million allocation for transit passes. Next, SANDAG supports the restoration of $75 million for the Highways to Boulevards Reconnecting Communities Pilot Program. And then finally, SANDAG supports the GDRF priorities identified by the California Transit Association. Thank you. Thank you. Good afternoon. My name is Lacey Rock. I'm representing the California Green Business Network. We support thousands of small businesses throughout the state to reduce greenhouse gas emissions and achieve other environmental recognitions and achievements. And we connect the largest sector of our economy, which is new job growth and economic vitality in the state with personal relationship-based technical assistance. And the conversation made clear today that while a large chunk of GGRF funds are already pre-allocated, to the extent feasible, please consider small businesses and their ability to reduce greenhouse gas emissions. They're not allocated yet. It's just a proposal. Please consider them for allocation. Good afternoon, Chair. Chris Nielsen with the American EV Jobs Alliance. We strongly support the $200 million proposed for light-duty EV vehicles. We thank you for all your incredible work on clean registration over the years and appreciate your work on this and, of course, the committee staff as well. Thank you. Thank you. Of course, the committee staff. Hi, Lauren Weschy on behalf of the Bay Area Rapid Transit District, and we agree with the LAO that neglecting to provide funding could prevent and disrupt capital programs and jeopardize our ability to draw down federal funding, and as such, urge the legislature to appropriate the plan $230 million in GGRF for zero-emission transit capital programs and establish funding certainty for the Transit and Intercity Rail Capital Program and Low-Carbon Transit Operating Program in the GGRF. Thank you. Thank you. Good afternoon, Chair. Benjamin Liu from the American Lung Association. We appreciate the Governor's $200 million proposal and believe that should be the starting point for ongoing investment into both medium-heavy duty vehicle incentives as well as light-duty programs that improve access to clean vehicles for low- and moderate-income consumers, for example, through Clean Cars for All. We also echo Senator McNerney's call to fund incentives for converting off-road diesel equipment through Farmer and Senator Blakespeare's support for funding alternatives to cars through transit and active transportation. EVs reduce the pollution that drive asthma attacks, emergency room visits, long-term lung damage, especially for children, and heavily impacted communities. Thank you. Thank you. And thank you for the work that you do to make sure that we have the statistics and we have the science behind what we do, especially here. Thank you. Alan Abs with the Bay Area Air Quality Management District, supportive of full funding for the AB 617 program, which would support the four Bay Area communities. The work that the communities have done with the Air District staff is a great story, and we'd love to be able to talk more about it and use it as a way to support the funding for this program. Also supportive of full and continuous funding for the Clean Cars for All program. Right now, we find ourselves running out of money. We have to shut down the program. We get money. We start it back up. It's not a very efficient way to run a program, and if we could fix that, that would be great. Thank you. Thank you. Brendan Tuig, on behalf of the California Air Pollution Control Officers Association, we understand money's tight. Within that context, we urge you to consider prioritizing the farmer program. It's cost-effective. It's also SIP creditable for meeting state and federal standards, which is really important with what the federal government is doing with rollbacks. And then the same goes for heavy duty. Urge you to think about we think that's a good idea, but make projects line up and meet Carl Moyer guidelines. And what that gets you is it means then that those reductions are also SIP creditable. So it helps us not only meet our federal standards, but deal with this hole that the that the feds are creating. Thank you. Thank you. Good afternoon. Eric Thronson on behalf of Sacramento Regional Transit District. Just echoing the concerns and asks of my other fellow transit representatives, and also really appreciate the chair and the rest of the committee that you all prioritize transit funding. I mean, in today's hearing, it was clear that this is important to you, and we'd just like to thank you for that and continue to fight for us. As you know, transit is critical for all of our GHG emission reduction goals. Thank you Thank you Bill McGowan with the Coalition for Clean Air We agree with the governor that we need to continue incentives for zero emission transportation We agree with you Madam Chair that we need to continue incentives for trucks and buses as well as cars When it comes to light duty, we want those funds steered toward low and moderate income Californians through Clean Cars for All and other equity programs because these are the folks who need the assistance making the transition to zero emission transportation. Thank you. Thank you. Hi, good afternoon. Grishina Mohabir, California Environmental Voters. We also appreciate the proposal for the new $200 million tax credit. Dollars to help move the EV transition in the face of federal rollbacks are crucial. And for this program to yield the greatest benefits, we urge consideration of equity factors in program design like income caps, which we know has been brought up today. I would also like to voice support for funding our existing incentive programs, both on the light duty and the medium to heavy duty side, all of which are critical to moving us forward holistically in the clean transportation transition. Thank you. Thank you. Madam Chair and members, Andrew Antwi here today on behalf of a number of clients. On behalf of the Office of Cat Taylor and Tomcat Ranch, we support $90 million annually from GGRF for the Sustainable Agriculture Lands Conservation Program. For LA Metro and MetroLink, we want to thank Senator Blakespeare for her remarks about operational funding needs for commuter rail. And also for LA Metro, we support the ZETCP and LCTOP and TIRCP funding priorities and maintaining those commitments. and for the Port of LA. We support ZEV funding, and thank you for your time. Thank you. Good afternoon. Good afternoon. Ethan Honohano here today commenting on item two on behalf of Powering America's Commercial Transportation, or PACT, a coalition dedicated to accelerating the deployment of accessible and reliable charging infrastructure to support medium and heavy-duty vehicle markets. PAC supports the broader industry request for $365 million for medium and heavy-duty vehicle incentive programs, in addition to the $135 million for clean fueling infrastructure programs. Thank you. Thank you. Good afternoon, Chair. Chris Lee here on behalf of Tri-Delta Transit in Contra Costa County, as well as the Sacramento Area Council of Governments, both echoing the concerns of our transit colleagues related to the Zero Emission Transit Capital program, as well as providing certainty for TERSIP and LCTOP in those Tier 3 GGRF expenditure programs. The Zero Emission Transit Capital Program, that's a $23 million hit in the Sacramento area region alone, and so urge you to restore that funding. Thank you. Thank you. Good afternoon, Chair and staff. Rebecca Marcus, on behalf of the Union of Concerned Scientists, speaking in support of issue number three, continued investment in clean cars, is critical in protecting our clean air and infrastructure and public health. We do ask that you also include funds to support zero emission heavy duty vehicles. On behalf of American Farmland Trust and the California Climate and Ag Network, I urge you to maintain the Sustainable Ag Lands Program or SALCS continuous appropriation within GGRF and invest $90 million to meet current increasing funds and also ask on behalf of the California Certified Organic Farmers for $15 million for the CUS program. Thank you so much. Thank you. Good afternoon. Taylor Truffaut on behalf of a variety of agricultural associations. Ag has not received funding from GGRF for the last two years, so we are requesting funding for farmer, FPIP, alternatives to agricultural burning, and livestock method emission reduction. Thank you. Thank you. Good afternoon Ada Welder with Earthjustice We like to thank the chair for your comments in support of the HVIP program This medium and heavy truck program is obviously extremely important in reducing community pollution and some of the most harmful NOx and particulate matter that harm communities. So appreciate your support there. We're asking for at least $350 million GGRF. Thank you. Thank you. Good afternoon, chair and staff. Thank you. My name is Rocky Fernandez. I'm with the Center for Sustainable Energy. We're here in support of item number three, the $200 million zero emission vehicle incentive. As a longtime administrator for CARB's Clean Vehicle Rebate Project, as well as some of their low-carbon fuel standard used electric vehicle programs, as well as some of the regional Clean Cars for All programs, we know how important these are to keeping market certainty and moving everything forward. So we look forward to working with the legislature to make sure this program is successful. Thank you. Thank you. Hi, Andrew Dawson, the California Housing Partnership. Us, along with 49 organizations, are wanting to elevate the Equitable Building Decarbonization Program and ensure there's no cuts to that program. Additionally, the Tech Clean California Program and the Low-Income Weatherization Program are running out of funding this year. So we want to maintain funding to those critical programs to help low-income Californians decarbonize their homes. Thank you. Thank you. Good afternoon, Madison VanderKlee with the Building DeCarb Coalition Action Fund, respectfully looking for an appropriation to support Tech Clean California, which, as mentioned, helps households decarbonize with heat pumps, also lower their energy bills and gain access to air conditioning. Really critical program for our climate goals, but unfortunately ran out of funding in January. So we're looking for funding to support that. Thank you. Thank you. Good afternoon, Madam Chair. I'm here for a couple of clients on a few issues, so I'll try and wrap this up super quick. On behalf of the California Electric Transportation Coalition on issue three, they support the $200 million light-duty ZEV incentive proposal for first-time buyers. On issue six, Cal-ETC has submitted a letter to this committee from a board coalition, a broad coalition of ZEV stakeholders supporting the infusion of GGRF dollars into a complete suite of California's existing low-carbon transportation programs. And then on behalf of Utility Global, strongly support Senator Archuleta's request to appropriate $20 million for hydrogen projection investment in California. Without this investment, California risks losing federal dollars and potentially stalling smaller projects. Thank you. Thank you. Hi, Melanie Mathewson from DeVoe Burr Group on behalf of Rivian, speaking in support of the one-time $200 million incentive for light-duty zero-emission vehicles. Rivian is an all-electric, all-American vehicle manufacturer employing 4,000 Californians with dozens of service locations across the state. Timing of this program is critical for Rivian, which will release the new midsize SUV this spring, and is looking to their home state to support them in this endeavor. We respectfully urge your support for this $200 million appropriation. Thank you. Thank you. Good afternoon. Caitlin Rodner-Sutter on behalf of Environmental Defense Fund, also in support of the $200 million one-time light-duty incentive program. In addition to all of the air quality and climate benefits of that, we see this as a really important partnership between the state and the automakers so we can work together eventually to develop the next generation of durable vehicle standards. Also very supportive of investments in heavy duty for all the reasons you outlined, Chair, with all of the air quality and climate benefits that come with cleaning up heavy duty transportation. So thank you. Thank you. Hello Ryan McCarthy on behalf of Lucid Motors a California EV automaker with about 3 employees in the state making some of the longest range and most efficient electric vehicles on the market Through a leasing model, they have been able to turn over vehicles very quickly, and now you can find about 400-mile range EVs for $40,000. This is how you increase access, is making the most compelling products available to everybody. We strongly support the Governor's EV incentive program, hope it will support leases, hope it will support California companies and the jobs there and the most innovative products that they and other leaders are developing. Thank you. Okay, thank you. Good afternoon. Iria Repitian on behalf of Hyundai. We strongly support the Governor's 200 million ZEV tax credit proposal. We believe this proposal will help stabilize the market, support carb development and drive forward regulations and encourage continued EV investments. So we strongly encourage you to support this proposal. Thank you. Thank you. It's so good when you're under 30 seconds. Good afternoon, Madam Chair and staff. This is right here in my ear. Herman Barahona, Executive Director of the Sacramento Environmental Justice Coalition. I'm here on behalf of our affiliate, the Common Ground Industrial Areas Foundation. We cover Yolo, Solano, Placer County, Sacramento, El Dorado counties. We represent people who earn less than $2,000 a month. and they cannot buy EVs. And the dealerships are trying to mess with them all the time. So we are strongly supportive of any enhancements of these programs, but they're going to help people navigate through the dealerships all the way what's going on on the ground. This is why we also support SB 1075, because we need more controls on the ground. Thank you. Thank you. Good afternoon to everyone. My name is Jesus Figueroa Acasio. I'm here with Sacramento Environmental Justice from Sacramento. So I also strongly agree to AB 1075. Thank you. Thank you. Record set. Good afternoon. Melissa Werner here on behalf of Honda, also in support of the $200 million proposal by the governor towards light duty Zev incentive program. Thank you so much. Thank you. Hi there. I'm Alexandra Levy on behalf of the Agricultural Energy Consumers Association. We are urging funding for all ag programs in GGRF, but want to express strong support for dairy methane reduction programs that are extremely oversubscribed and needed to achieve the state's ambitious methane reduction goals. Thank you. Thank you. Good afternoon. Katrina Fritz, California Hydrogen Business Council. We're the largest hydrogen trade association in the U.S. We represent automakers, OEMs, and community groups as well. So I'm here today on item nine. We support additional funding for HVIP from the Heno settlement, and we would support more going back to the vouchers themselves for faster deployment of trucks and buses. Transit agencies are choosing hydrogen buses. We have over 400 in fleets in California now. The Federal Transit Administration is not funding new zero-emission bus projects, and tariffs have increased vehicle costs, so we strongly urge you to fund the Heno settlement back into the HVIP program. Thank you. Hi, Chair Reyes. Good morning, or good afternoon. I'm Ryan Canney with Clean Energy, asking for your support of the Assembly request for $100 million in incentive funds for low-nox truck incentives that would go into the HFIT program. The state right now has a clean air problem and is threatening to not meet federal attainment, which would jeopardize up to $75 billion in federal transportation funding. So the displacement of dirty diesel to the cleanest available technology cleanest trucks for low-knocks trucks that meet a 20 milligram or cleaner standard would be needed thank you thank you for the chair brian schobe on behalf of the california climate and agriculture network i want to echo senator mcnurdy's comments about alternative manure management healthy soils fertilizer prices have doubled in the past month and and food prices will soon follow the amp program offers a three-in-one solution by giving dairies the financial assistance they need to convert manure into compost, improve water quality, produce methane, and reduce imported fossil fertilizers. Thank you. Thank you. Good morning. Sarah Brennan with Weideming Group on behalf of NextGen California in support of one of fully restored greenhouse gas reduction fund allocations to not backfill general fund obligations with prioritization for community air protection programs, and a strong regulation of AB 1207 and SB 840 to generate critical funds for the Greenhouse Gas Reduction Fund while reducing pollution, and lastly, a passage of the $200 million of incentive program and expansion of funds to also support medium and heavy-duty zero-emission vehicles. Thank you. Thank you. Good afternoon, Madam Chair. Chris McKaylee on behalf of the California Renewable Transportation Alliance. Similar to clean energy, We support a $100 million allocation from GGRF targeting heavy duty, low-nox trucks. We think that that $100 million incentive could get 2,000 trucks off the road. That is targeting the highest polluting hardest to electrify heavy duty vehicles Thank you Madam Chair Thank you Hi Chair Anna Vasquez here on behalf of the Riverside County Transportation Commission and the San Diego Metropolitan Transit System urging the GGRF discretionary backfill to fully fund Tier 3 TRICP and LCTOP, as well as appropriate the plan $230 million in the GGRF funding for the Zero Emission Transit Capital Program and the allocation of $20 million for fiscal year 2627 for SB125. And on behalf of the San Diego MTS to reinstitute the partial self-tax and use tax exemption for zero-emission buses purchased by transit systems. Thank you. Thank you. Madam Chair, Michael Pimentelli with the California Transit Association, voicing for one additional time support for the monies for SB125, zero-emission transit capital program dollars. These monies critical for getting agencies to remain operational, get them to a point of self-sufficiency through self-help measures. I would also note that we want to establish some funding certainty on the TIR, CP, and LC top, recognizing that they're now in Tier 3. And then finally, I do want to see some investment move forward in medium and heavy duty so we can continue to move forward on zero emission transition in the transit sector. Thank you. Thank you. Madam Chair, Brendan Rpicki on behalf of Via Transportation, which partners with more than 80 communities across the state to expand equitable, clean transit options. As you consider the GGRF, we request you restore at least $40 million to CARB's Sustainable Community Strategies programs which saw its funding cut last year These programs directly support underserved and disadvantaged communities Also request the legislature restore the million to the Zero Emission Transit Capital Program Thank you. Thank you. Good afternoon, Chair Nate Solove on behalf of Zim Solutions. Appreciate your support of the HVIP program. In the 2024 budget, finance took over $300 million from the Cummins settlement and used that for other parts of the budget. We're asking that a minimum of $170 million of that amount go to the HFIP program in this year's budget, which was stipulated as part of that settlement agreement. Also, on behalf of the Port of L.A., supporting that GGRF funding go to the Zero Emission Ports Program, which was zeroed out several years ago. It's critically important to reduce emissions in port communities. Thank you so much. Thank you. Good afternoon, Chair. Tricia Geringer with Agricultural Council of California, representing over 15,000 farmers throughout the state. Here on Issue 2, GGRF, we're very supportive of the farmer program, ag equipment, and also food production investment program, as supported by Senator McNerney at the beginning of the hearing, and also ag waste sustainability and livestock methane reduction programs. Thank you so much. Thank you. Good afternoon, Chair. Vincenzo Caparelli here on behalf of California Association of Council of Governments. regarding the GGRF proposals. First, we want to call on the governor and legislature to appropriate the $230 million in funding for the Zero Emission Transit Capital Program. And in light of the changes to SB 840 with SB 840 we call on the governor and legislature to establish funding certainty for TERSIP and LCTOP Finally turning to ASIC we appreciate the governor proposal including requirements to incorporate regional priorities in the SES allocation Thank you. Thank you. Good afternoon, Madam Chair. John Moffitt on behalf of the Alliance for Automotive Innovation here in support of two items today. Issue number four, moving the bidirectional charging regulations from Energy Commission over to ARB. They are our traditional regulator. We have a good working relationship with them. Look forward to working with them on that. And also in support of issue number five, the $200 million for the light-duty zero-emission vehicle rebate. We want to align ourselves with the comments Department of Finance made earlier. We know incentives work. Thank you. And they work. Thank you. All right. Thank you all who provided information on the panel. Thank you for those of you who are still here, Alejo. Thank you to the staff that is here also. And thank you to all those who provided comments. Comments and suggestions are important to us. We want to include your testimony in the official hearing records. So if you did not provide your comment today, you can certainly provide it online. Thank you to everyone, and thank you for your patience. This Budget Subcommittee No. 2 is adjourned.