Senate Education Committee

Okay. Good morning. Welcome to the Senate Education Committee hearing. There are five bills on today's agenda. We have one bill, item number one, SB 959, on consent. Witnesses are asked to limit their testimony to two minutes to ensure the committee is able to complete today's agenda in a timely fashion. Seeing that we don't have a quorum, we'll begin as a subcommittee with the first bill. And the first bill that we have up is SB 1058 by Senator McNerney.

Yeah, you can also come to the table as well to do your presentation.

McNerney, do you have any other support witnesses? This is my lead witness. Okay

McLean Rozanski with the Alameda County Office of Education in support.

Good morning. LeAngela Reid on behalf of the California School Nutrition Association in support.

Thank you, Madam Chair, and thanks to the author. I'm definitely supportive of the bill. It follows on a series of work that's happened in the legislature as well as at the local level and certainly is an important follow-up to the legislation we passed last year on ultra-processed foods but also many others. This is not a cause for concern in the bill. And I know the senator is the chair of the Revenue and Taxation Committee has a lot of experience monitoring changes in federal laws and regulations and definitions. And given, you know, given the administration's view about health and safety, luckily this is in the agriculture area, not in the health department. But we just we're essentially deferring permanently to whatever the federal government includes in that regulatory language, which is not inappropriate, but it just it puts the onus on us. both in the legislature and the executive branch to continuously monitor changes to that federal regulation so if anything goes off the rails that we're able to reclaim our time and reclaim our own ability to write the definition that makes sense for california but the languages that is in the federal right today makes sense this is an important conformity and alignment that will allow our school districts to to do exactly what the witnesses so appreciate it and at the appropriate time i'd like to move the bill excellent so we have a motion senator choy thank you uh let me

I think that's a good question.

Thank you, Senator. So at Lodi Unified, we are very typical in how we go about our RFP process in many other school districts. And you had mentioned farmers. I heard produce. I heard junk food. And so when we do the RFP process, it's a specific process. So looking at produce, we just finished our RFP for our produce. And so with the addition of 1058, what this allows us is greater flexibility so that price is not the main driver on this. So if our main driver, for example, in Lodi, is locally sourced, you know, we're in the middle of all of this agriculture, and so we have definitely a local economic interest to awarding to our local farmers. And also it heavily supports and leverages all of the health outcomes that we are all interested in. And it also leverages and recognizes our local economic interest for our farming community when it comes to produce. And to your point on junk food, so an RFP on produce would not include junk food. Junk food would, you know, I don't know what the definition of junk food is legally. I'm pretty sure there is none that I'm aware of on the public health spectrum. Highly processed food. Highly processed food. Yeah, so thank you so much. So that profile of food would not fit inside of that RFP. Did that answer your question?

Or I know Senator Cabaldon, I think, wanted to just make a comment briefly.

Thank you, Senator. And so inside of the RFP process and inside of Fund 13, which is our nutrition services fund, we are financially responsible for that check and balance of the actual cost of everything. The RFP is simply the rail that allows us to drive that. As the author of the RFP for Lodi Unified, looking at the produce bid, we specifically put on there what we're looking for, and we award according to what the RFP allows us to reward by statute. This increases the flexibility for this. And did you say quinoa in Lodi? I would love to find the quinoa farmer in Lodi. But to your point, we would not purchase the $10 million because financially it just would not make sense. And the responsive and responsible vendor is enforced throughout the RFP cycle of the awarded providers. So there's no point in the lunch line where you say, hey, Carlos, Bethany, sorry we've run out of food. Sorry you missed out on the really great quinoa, but now we can't feed you. That you have other checks and balances and controls, both your own but also federal and state, that require that each child gets the meals to which they're entitled. Yes, that is absolutely correct. Great. Are there any other questions? All righty. Senator McNerney, would you like to close? Well, I thank the chair and the committee. I thank the witness. I think Senator Choi and Senator Kabaldon for their inputs on this. I mean, there's always going to be some concern about fraud or by giving schools flexibility based on quality, I think is a real game changer and a winner for our communities. As a witness indicated, we are a farm community. there's a lot of local farm competition and I'm sure that we'll be watching those and it'll be up to the local school districts to make sure that everything is done fairly and properly but but actually the point is to make sure that the students have access to the highest quality food that can be provided by the school district with that I'll ask for an aye vote Great. We have a motion by Senator Cabaldon. We also now have a quorum. So, Secretary, if you wouldn't mind establishing and please calling the roll for quorum. Senators Perez. Here. Perez here. Ochoa Bog. Here. Ochoa Bog here. Cabaldon. Here. Cabaldon here. Choi. Here. Choi here. Cortese. Gonzalez. Reyes. Great. And we have a motion on SB 1058. If you could please call the roll. And the motion is do pass. Senators Perez? Aye. Perez, aye. Ochoa Bogg? Aye. Ochoa Bogg, aye. Cabaldon? Aye. Cabaldon, aye. Choi? Aye. Choi, aye. Cortese, Gonzalez, Reyes. Great. And we will put that bill on call. Thank you so much, Senator McNerney. I see that we have Senator Ashby next here in the room. Senator Ashby is presenting SB 1140 and you can begin when you are ready. Thank you, Madam Chair and colleagues. Good morning. I am here. Okay, Madam Chair, to start? Yeah. All right. I'm here to present SB 1140, which is a safe school campus act sponsored by the California Federation of Teachers. California schools are required to maintain a comprehensive school safety plan that addresses campus risks. However, these safety plans do not always include construction site access protocols. Construction and repair projects require workers to repeatedly open doors, driveway gates, and other points of access to complete their work efficiently, often over the course of several days, weeks, or even months. While our schools undoubtedly work hard to keep their faculty and students safe, unauthorized individuals have gained access to school campuses through unsecured entry points, such as open gates and propped open doors. Some you know of are national tragedies. However, the data points show that there is no known active shooter who's ever successfully breached a locked door in the United States. SB 1140 works off of this data point by closing an important gap in school safety plans. The bill requires schools to enhance their safety plans with measures that limit entry points to better prevent unauthorized school site access during construction, maintenance, and repair times. SB 1140 ensures California can continue to better protect our students from unauthorized individuals and potentially very dangerous events by requiring schools to incorporate measures into their school safety plans that limit unattended entry during construction, maintenance, and repair projects. That being said, I do have one witness with me. I have Mitch Steiger from the California Federation of Teachers. Thank you, Madam Chair, members and staff. Mitch Steiger with CFT, Union of Educators and Classified Professionals, proud to sponsor this bill for all the reasons stated so well by the author. Also, because we think this bill offers an opportunity to prevent tragedies rather than just respond to them, that this is a hazard we've heard about from our members, that, oh, the driveway gate's been open all week, the door's been propped open all day. And fortunately we don't have a tragedy to point to in California where there was a shooter or there was someone trying to commit violence that accessed a school in California because some point of entry was propped open but we much rather be here trying to stop that from happening than scrambling to try to fix it after the unthinkable has already happened So the bill is structured we believe in a very straightforward way that should be easy to comply with where it doesn tell every school you shall do this with your doors or you shall do this with your driveway gates It just builds this concept into their existing process of developing the school safety plan. So this is something that's already done. There's already a safety committee that puts these together and this just means that Excuse me when you're having the discussion about the safety plan that this topic is added to the list We need to figure out a plan because each school is going to be different Some have a lot of doors some don't have that many some have a very secure fence around the campus some don't and So this allows each school to kind of tailor a solution to their specific needs while not reinventing the wheel and creating some new process that they all have to comply with. And just wanted to finally mention that with the respect of the Uvalde shooting where it was originally thought that a teacher had propped the door open the video surveillance confirmed that the teacher had kicked the door out and pulled the door shut but the door was supposed to automatically lock but it didn't. So another reason we like the way this bill is structured is that it in no way discourages maintenance workers from being on campus. We want those maintenance workers on there fixing the locks, fixing the gates, doing whatever they have to do to keep the campus safe, but we don't want to create any sort of an unintended consequence that means it's more expensive to have them on there. We think this bill does that, striking a balance between all these different needs, but still we think doing a lot to prevent any sort of tragedy from occurring in the future. We urge your support. Thank you. Thank you for your presentation. Now let's hear from any other support witnesses here in room 2100. please use the mic outside the railing and only state your name, organization, and position on the bill. Good morning, Chair and members. Rebecca Marcus, representing Brady Campaign and Brady California in support. Thank you. Yara Jidal, volunteer with Moms Demand Action, in support. Good morning. Carlos Lopez with the California School Employees Association, in support. Good morning, Chair and members. Elmer Lazardo here on behalf of the California Federation of Labor Unions in support. Morning, Madam Chair and members. Dylan Hoffman on behalf of PRISM in support. Great. Seeing as we have no more support witnesses, we'll now move on to lead witnesses in opposition, if there are any. The two lead witnesses may come forward and use the mics at the table in front of us. Seeing nobody getting up, we will now turn it back to discussion with the members. Do we have any questions or comments? Senator Choi? Senator Choi- Thank you, Chair. I just want to understand clearly what the intent of the bill is. The summary says that to limit the access points during the construction facilities maintenance repair projects. Are you concerned of existing building maintenance, repairs, and then doors are probably open, but it has to be more monitored? and school access, whether that's during the construction time or non-construction time, already you do limit the unauthorized people's access to the school. So if you are referring to new project, separate building construction, then that is obviously they need to have a perimeter of the construction area no unauthorized people should be able to access to that point So which project are you concerned or both situations that this bill is addressing Madam Chair, if I may? Yeah. So both, anywhere where there are students present, right now all school sites have to do a school site safety plan. If this bill does what it's supposed to do, it sort of boringly and unopposed makes its way through the legislature, gets implemented, and schools across California make plans for when they have construction on site, and therefore nobody ever gets hurt. We don't do this bill. We run the risk of not learning from other states who haven't been as safe and haven't been as careful, and then folks gain entry onto a campus unintentionally. This is not an indictment of anyone. We know that people are careful around schools, but as you have heard, there have been instances across this country where unintentionally a door isn't closed or it isn't secured or it isn't locked. And in every case in the United States of America where there has been a school shooting, it has been through an unlocked entry. So the goal here is just to ask schools to make sure that when they're doing their overall school site safety plan, that if they have construction or maintenance happening, that they also include that in their plan. I'm all for, obviously, school safety, student safety, and any measures we need to strengthen. I'm all for it so obviously even extra outside the new construction area whether that's a school or non-school issue always for the local government it has been a problem because some thieves may come in with the truck and steal their equipment, whatever, because people trust that they look like part of the workers and that they have that kind of unethical, you know, stealing activities took place many times. So a project, new construction site, the security, and then also always to lock it up when they leave, that has been the practice at the city that I served in the city of Irvine. So I think this is, you know, obviously construction management has to secure that construction site. At the same time, if there's existing building maintenance and repair work, obviously for the convenience, the door can be easily left open. So who's going to monitor that door? I think that has to be worked out between the school administration and the construction company. This bill may inadvertently help with construction loss, but the focus is student safety. Thank you. I will support that. Thank you. Any other comments or questions? Great. Okay, and we have a motion. Senator Ashby, if you'd like to close. Respectfully ask for an aye vote. Excellent. So we have a motion by Senator Ochoa Bogue and SB 1140 is due pass to the Senate Appropriations Committee. Secretary, can you call the roll? Senators Perez? Aye. Perez, aye. Ochoa Bog? Aye. Ochoa Bog, aye. Cabaldon? Aye. Cabaldon, aye. Choi? Aye. Choi, aye. Cortese, Gonzalez, Reyes. Great. And we will put that bill on call. Thank you, Senator Ashby. Thank you colleagues So we going to go ahead and do consent right now for SB 959 Secretary if you could call the roll And we have a motion on the consent calendar. Apologies. We have a motion by Senator Cabaldon. Senators Perez. Aye. Perez, aye. Ochoa Bogg. Aye. Ochoa Bogg, aye. Cabaldon. Aye. Cabaldon, aye. Choi? Aye. Choi, aye. Cortese Gonzalez-Reyes. Great. And we will put that bill back on call. So we're going to go into a short recess while we wait for the other two authors to arrive. and then we'll return once either one of them get here. Thank you. All right, we will bring Senate Education Committee back to order now that we have Senator Padilla here. Senator Padilla, you're presenting SB 1006. Please feel free to begin when you're ready. Good morning. Good morning. Good morning, Madam Chair and members. Thank you for your indulgence. I am pleased to present SB 1006, which sets the Cal Grant B Access Award amount at a new minimum and requires the award to automatically increase each year based on inflation using the California Consumer Price Index. Cal Grant program, as you know, has helped California students cover the cost of college for more than 50 years. Yet its support for non-tuition expenses has failed to keep pace with rising costs. Cal Grant awards for tuition at UC and CSU campuses have increased. The maximum Cal Grant B Access award that helps students pay for non-tuition college essentials such as housing, food, transportation, and books, however, has remained at just $1,648 per year. In 1969, a little bit ago, the amount was set at $900 and is not kept up with inflation. In fact, it is currently worth less than one-fifth of its original value. Non-tuition costs make up a majority of college expenses, often exceeding over $30,000 annually for students living independently off campus. Even when combined with the maximum Pell Grant, less than one-third of average non-tuition costs are covered, contributing to widespread basic need and security among college students. This bill addresses the rising cost of college through incremental investments that will increase access award amounts for Cal Grant B recipients. It indexes the award amount to the California Consumer Price Index and replaces the current fixed cap to ensure the award maintains its value over time. Beginning in the 27-28 academic year, this bill will set the Cal Grant B access award to at least the current amount for the 25-26 academic year, rather than the amount set in the statute. SB 1006 strengthens the program and complements our broader efforts to address the basic needs of college affordability through investments in non-tuition-based costs. With me today, I have Laura Zabo-Kibitz with the Institute for College Access and Success, and Yalmari Crawford, a current student activist at Sacramento State University. Good morning Chair Perez and members. My name is Laura I'm Zabo Kubitz and I'm Senior Policy Advisor at the Institute for College Access and Success. Thank you for the opportunity to testify in strong support of SB1006 by Senator Padilla, which we are proud to sponsor along with our partners at Children Now, EdTrust West, and Public Advocates. SB1006 is crucial to the success of both individual Californians and the state because it would ensure that the Cal Grant B Access Awards that the lowest income students receive to help cover non-tuition costs, including food and housing, are indexed to inflation and do not continue to lose value, and provide much-needed support on Californians' paths to higher education credentials. Importantly, this bill would benefit over 300,000 students annually at all types of public and private higher education institutions. We are grateful for the legislature's ongoing support of the Cal Grant program. However, unlike Cal Grant awards for tuition at CSU and UC that automatically grow with statewide increases, its awards for non-tuition expenses, which, as the Senator mentioned, often exceed $30,000 annually and have increased by 80% in the last decade alone, have failed to keep pace. At just $1,648 today, the maximum Cal Grant P. Access award is worth less than one-fifth of its original value. Research finds that many California college students face basic needs and security which impacts their ability to thrive in higher education. Data from CSAC finds that 66% of California college students are food insecure and 53% are housing insecure. These figures rise to 79% and 73% respectively for student parents. Importantly SB1006 would also ensure that that Cal Grant B Supplemental Awards available to student parents and recent foster youth who face additional affordability barriers are indexed to inflation. We are proud to sponsor SB1006, which would complement the state's efforts to address basic needs in college affordability and respectfully urge your aye vote. Thank you for your time. Hello, Chair Perez and members of the Senate Education Committee. My name is Jamari. I am a second-year political science major at Sac State. I am a student activist and a young Latino activist here in Sacramento. I am here in support of SB1006 by Senator Padilla because as a formerly homeless student and as someone who continues to struggle financially, it is extremely difficult for me to prosper academically, to advocate for others, and to organize in the community while still figuring out ways to pay for college, which unfortunately includes me borrowing loans that I had to take out to pay for my college dorm because the aid that I got was not enough to cover it. I only received $700 monthly from paid volunteer work, which supplements my financial aid, but that money is not enough to get me through the month, even with careful budgeting. Unfortunately, I have to miss out on networking opportunities that could further my career and my academics because I may not have enough money to pay for an Uber to get back from the event to my dorm or vice versa. I also miss out on parts of my college experience because I may not have enough funds to experience those parts of my college experience. Many other students that I know also face similar challenges. Cal Grant B being indexed to inflation would significantly benefit hundreds of thousands of students statewide by ensuring that the aid that they get does not continue to lose purchasing power As someone who works with former foster youth and formerly homeless youth such as myself at the Guardian School of Sporting Massac State I see the effects of students struggling to pay for rent, emergency costs that may come up, and books for classes. And so non-tuition need-based aid is absolutely important to make sure that these students are able to thrive, excel in their classes, have an enjoyable college experience, and not have to worry about whether or not they can pay for books for classes, money for gas, and money for a parking pass, and so much other things. And so SB1006 will significantly improve the conditions of the students, including myself, by ensuring that award does not continue to lose value each year. We are grateful for your consideration of this bill, and I hope to get your eye vote today. Thank you. Thank you so much. We will now see if there are any other support witnesses here in room 2100. If so, please use the microphone outside the railing and state your name, organization, and position on the bill. Ben Nash with Children Now in support. Thank you, Mark McDonald, on behalf of National University and the San Diego Community College District in support. Good morning Chair and members, Oscar Sandoval with the Center for Healthy Communities in strong support. Good morning, I'm Maggie White with the California State University Chancellor's Office here in strong support. Thank you very much. Good morning, Jessie Hernandez-Reyes on behalf of the Campaign for College Opportunity and California Competes in support. Good morning, Senators. On behalf of Public Advocates, Carina Paredes in strong support and a co-sponsor of the bill. Thank you. Good morning, committee. Valentina Rodriguez, student at Sacramento State Support. Hi. Good morning, Chair and members. Carol Gonzalez on behalf of the Cal State Student Association. Proud to support the bill. Sorry we couldn't get the letter in on time. Thank you. Sorry. I thought my colleague was going to walk through the door. Carol Gonzalez on behalf of EdTrustWest, they were running through me again. Thank you. Thank you. Now we'll turn it over to opposition. Do we have any opposition lead witnesses here in room 2100? Seeing nobody getting up, I'll turn it back now to discussion with the members. And I just want to say before we get started, Senator Padilla, I really appreciate this bill. This has been, I think, something that I know I've worked on even before I got to this building. And it's great seeing friends here. Laura, it's nice to see you. And, you know, I remember working on the Cal Grant Equity Framework, which was signed into law but was never funded. And we've continued to have conversations about putting more money into the Cal Grant. We know that we need to lift the amount of aid that we've provided our students, and yet we fail to do so. and it's a constant struggle because we know for our students they've seen the cost of transportation, of housing, of food continue to dramatically rise, and yet that award amount hasn't changed. And what that does is it causes our students to rely more and more on student loans and on other forms of student aid. When we should be raising the Cal Grant, we know that we should, and so I think that this is a very intentional and measurable way for us to start moving that number, tying it to CPI I think makes a ton of sense it always should have been tied to CPI and really really happy to be supporting this and to see you introduce this so just wanted to acknowledge that acknowledge all of the tremendous efforts that have been put into this over the years And I'm hoping that we can make the investment in this one because we need to really start making movement on that. I'm going to turn it over now to Senator Ochoa Bogue. I just want to echo not the part that I've worked on it like you have, But I actually am very grateful that you are kind of tying it to the CBI. I think it's great. I think, as mentioned by our chairwoman, I think it should have been done from the get-go. So I'm really glad that we're finally doing it. I can't believe we've waited this long to do it, quite frankly. I cannot just fathom that. But I'm grateful that you're taking the lead on this, Senator Padilla. And I will be happy to make the motion when the appropriate time is here. Senator Choi. Thank you, Chair. Excuse me, Madam Chair. Senator Padilla, thank you for the bill idea. I just want to have some clarification. Before your bill, existing legislation does not allow CPI automatically included, and your bill is trying to catch up a small portion that is behind the CPI. My calculations are only catching up with $97 per month. and then also other foster parents, the amount that they are getting $6,000 would include that the CPI rate. Are you specifying certain percentage to be built in if existing law does not have a specified, such as a 3% or California CPI rate, rate whichever that is publicly announced so if you can clarify and that is my first part question second part question is that when your bill passes what amount of money will be impacted I'm worried about the California budget situation in a deficit whether this will be implemented or not. Madam Chair, Senator, thank you for the question. Just to clarify, this bill specifically goes to the access award amount under the Cal Grant B portion which right now is limited in statute to a discrete number. This bill instead would align that with the maximum per student amount provided in the 25-26 award year which is distinct and was allowed to be more flexible under a different statutory proceeding. So we're providing that more flexibility to bring that forward and we're also requiring that it be automatically tied to CPI and increased on an annual basis. The second part of your question in terms of I think I understood the second question to be asking if I had a scoring or a calculus on budget impacts or costs and I don't have it in front of me but I would probably can get you that information to your office if you need it. I don't think it's substantial or adverse and I think when considered against the value of increasing access and student success for people who rely on Cal Grant to be able to even get into a learning environment, I would argue it's probably a good investment. Thank you. I want to support it. Thank you, sir. Yes. Okay, yes. So this is not obviously an official scoring, but what we've done with our research team is that for year one it would be about million million would be for increasing the to inflation and then the other million would be for increasing the for the student parents and foster youth So we estimated that in the first year it would increase by about for that first award and then about for the second award And goodness, what was I going to say? Lost my train of thought. Oh, I know what I was going to say. Advocates are also going to be doing budget advocacy on this as well. Yeah. We know that's critical in order to make sure that this actually happens. Like I said, I'm unfortunately having that experience working on this before. But I think this is really a measured way to approach this. I hope the governor agrees as well. So Senator Padilla, would you like to close? Thank you very much, Madam Chair, just briefly. I'm always reticent in a policy committee to try to score a bill ahead of when it's key fiscal. I just don't believe in creating your own bad karma. But aside from that, I appreciate the assist from one of my lead witnesses. And I would just reiterate, this is about access. This is about everything from creating a healthy learning environment by reducing the burdens, certainly on students with less means. And we have to catch this up. And Madam Chair, I want to thank you for your leadership in this space, even before you join the legislature. And I think I would agree it's a measured approach to adjust this in the right way, and I would respectfully ask for an aye vote. Excellent. Great. Do we have a motion? A motion. Okay, a motion by Senator Choi. And the motion for SB 1006 is due pass to the Senate Appropriations Committee. Secretary, can you call the roll? Senators Perez. Aye. Perez, aye. Ochoa Bog. Ochoa Bogues, Cabaldon. Choy. Choy, aye. Cortese. Gonzales, aye. Reyes. Great. And we will put that bill on call. Thank you so much, Senator Padilla. Thank you, Madam Chair. So we will go ahead and lift the calls because I know Senator Gonzalez has joined us. Secretary, if you can go through the bills. On the consent calendar, SB 959, file item 1, the motion is, oh, it's consent item, current vote is 4 ayes and no no's with the chair and vice chair voting aye. Senators Cortese, Gonzalez, Gonzalez, I, Reyes. Great, and we will put that bill back on the call. Okay. File Item 3, SB 1058 by Senator McNerney. The motion is due passed. Current vote is 4 ayes and no no's with the chair and vice chair voting aye. Cortese, Gonzalez, Gonzalez aye, Reyes. Great. And we will put that bill back on call. File Item 4, SB 1140 by Senator Ashby. Motion is due passed to the Senate Appropriations Committee. Current vote is 4 ayes and no no's with the chair and vice chair voting aye. Cortese, Gonzalez, Gonzalez, Reyes. And we will put that bill back on call. Thank you. Thank you. Thank you Thank you. Thank you. All right. Good morning, Senator Rahab. You're here to present SB 1141, and you may begin when you're ready. Thank you. SB 1141 will prohibit a business from contracting with the University of California if a UC executive is paid or has been paid by that business within the previous year. UC manages vast budgets, complex procurement systems, and long-term vendor relationships, and the university exercises significant discretion in selecting contractors, consultants, and partners. Outside of competitive bidding, this discretion has been exercised without oversight or transparency and has created opportunities for conflicts of interest, self-dealing, and steering contracts to companies that compensate officials directly or indirectly. The consequences of these conflict-laden contracts extend beyond financial loss. They erode public trust in the university, deprive competing businesses of opportunities, and risk diverting resources away from students, faculty, and research. To ensure that contracts are made based on merit and public benefit, SB 1141 will specifically prohibit a business from bidding on, entering, renewing, extending, or expanding a contract with the UC if a UC executive has served that business as a paid director, paid consultant, or paid advisor within the last year. The bill will also prohibit a business from contracting with the UC for one year after providing or promising compensation to any UC executive or immediate family member. As a publicly funded institution, UC has a legal obligation to ensure that contracting decisions are made solely in the best interest of the university and the public it serves. With me to testify in support of this measure is Catherine Leibarger, Executive Vice President of AFSCME 3299. To answer any technical questions, Kate Hallward, Counsel for AFSCME 3299. Good morning. Catherine Leibarger, Executive Vice President for AFSCME 3299, along with the frontline workers at the University of California in support SP 1141 is a long overdue step toward dismantling a dangerous conflicts of interest practice For years we have witnessed troubling side deal relationships between companies who receive UC contracts and UC's executive management. We know of senior UC executives with seven-figure public salaries who have concurrent, lucrative, private roles with companies also doing business with UC. For example, reports acquired through Public Records Act requests show CareDX, a medical data company, pays the CEO of UCSF Health to sit on their CareDX corporate board of directors. Welltower, a real estate company that leased buildings to UCLA Health, has paid the CEO of UCLA Health a total of $1.8 million so far to sit on its corporate board of directors. SB 1141 does not prevent any company from doing business at UC. SB 1141 does establish and enforce clear prohibitions against conflicts of interest. SB 1141 protects the integrity in the UC's contracting processes, levels the playing field for competition, maintains public trust, and shields state government from the damaging, scandal-baiting accusations emanating from Washington, D.C. Thank you for your consideration. Good morning, Chair and members.

Thank you for your presentation. We'll now hear from other support witnesses here in room 2100. If you're here, please use the microphone outside the railing and state your name, organization, and position on the bill.

Thank you.

Thank you.

Naomi Nakamura, pharmacy technician at UCSF Medical Center, in strong support of SB 1141.

Good morning, Madam Chair and members. Tyler Aguilar on behalf of the University of California. I want to lead by stating that the university is fundamentally aligned with the author's goal of ensuring the highest ethical standards in public contracting. We maintain a zero-tolerance stance towards self-dealing and agree that no official should personally benefit from university contracts. We've also had a chance to speak with the senator and her staff on multiple occasions. I appreciate her listening to our concerns. However, currently we are in respectful opposition to this bill because it would unintentionally trigger an immediate operational and instructional crisis across our 10 campuses and five medical centers and overlooks an existing comprehensive framework of transparency and oversight that already operates under public scrutiny. It would also apply more stringent prohibitions on UC than those applicable to any other state agency in California Conflict of interest at UC is already strictly regulated by Public Contract Code Section 10516 and the Political Reform Act, which utilizes recusal as the proper remedy to ensure integrity without halting essential services. Furthermore, current law provides severe consequences for wrongdoers, including felony charges and other financial remedies. UC also maintains robust internal safeguards, such as Regents Policy 7707, which requires executives to obtain prior approval before joining any outside board. This is a request that is denied even if there is a perceived conflict. This is done annually. SB 1141 replaced this comprehensive framework with a more rigid mandate that ignores whether an employee actually had any decision-making authority at all over a contract by blocking contracts where any entity with a UC, where a UC leader provides unpaid board service. This bill effectively bars our experts from offering technical guidance needed to develop tools that meet the specific needs of our students and of our patients. Furthermore, the bill's broad definition of compensation would count standard passive investments like $500 in dividends from a publicly traded company as a disqualifying conflict for a UC contract. Because this bill applies to all executives and their direct reports, regardless of their involvement in any contract decision, we could be prohibited from annuing essential software licenses or medical supply contracts under this bill, for a few examples. With the added 10-year risk of a system-wide ban, many vital UC vendors may simply choose to avoid doing business with the university at all. For these reasons, the University of California, as opposed to SB 1141, I'm happy to answer any questions that you may have as well.

Ezra Shaban on behalf of Vizient, a UC contractor. We just got brought on board on Monday, so no letter on file, but we do share the concerns that UC has.

Ben Golombek with the California Chamber of Commerce and Respectful Opposition.

Senator Choa Bogue. Thank you, Madam Chair. So I'm curious, and this is either for the author or for the witnesses in support, but I'm curious as to right now, we already have in writing conflict of interest at the university, which is regulated by the public contract code as stated by the opposition 15 is at 10 5 1 6 prohibits any officer or employee from having a financial interest in an activity funded by a university contract the these protections are also bolstered by the political reform act with the gov code 87100 87103 and a robust suite of university policies including the UC conflict of interest code region policy 7707 UC policy PPSM 82 on conflict of interest and UC policy BUS-43 which specifically governs conflicts within business contracts. So is this more of, so there's all of these conflict of interest codes already in statute. My question is, are we just not enforcing it? We, I'm sorry, not we, but I'm just saying, are these conflict of interest not being enforced already? Because it seems like you already have lots of code in, or a lot of statutes in code already. So I'm trying to understand why the need for additional clarifications or another bill on this issue because there's quite a bit of them on record.

Are they supposed to be recusing themselves from actually making these decisions for the contracts?

but within the vote in behind closed doors i'm going to assume that the attorney's presence or the council the legal counsel that is present in in those contract uh negotiations uh would let them know to recuse themselves i'm assuming there is not a public vote at all there isn't a vote from which they could recuse themselves.

And why is the process designed that way? Why was it originally designed that way?

Just following up how do you explain the contracts that are being awarded behind closed doors or privately that have board members on those companies and those businesses

I mean, that's a great question.

So is it are we to understand that individuals, when these conversations are happening, there's obviously statute in place that says, you know, you're not supposed to have personal financial benefit. when these contracts are being negotiated, and I know you don't like the back doors, but privately or in the system that is not publicly viewed, is the assumption that a fellow board member would, if somebody was not recusing themselves, they would themselves report them as not recusing themselves? Is that something that would be happening? behind closed doors, if somebody wasn't doing and recusing themselves, if they had a conflict of interest or if they're getting paid, would someone else in that board or in that decision making cabinet report this individual as someone who's not recusing themselves and financially benefiting? I think that could be a very real example of something that could happen.

So it's my experience just, you know, my husband sat on city council for 12 years. I sat on the school board. He now sits on the water board. And there's a lot of conversations that happen, you know, when they have closed session, what they call closed session, right? Every governmental entity has closed session in some form, shape. And that's where certain conversations happen, where legal counsel is always present. and in those situations legal counsel usually will say and questions are asked you know who can and cannot make decisions based on whatever it is but counsel is always giving counsel as to where they can and cannot participate I'm going to assume that because we already have so much in statute already in place, even though it's not publicly made. I think there is a, you can't make me laugh. I'm going, sorry, we have a personal relationship and we're personal friends and it just, she just, when I oppose her bills or when I support her bills, there's always like a look that she gives me. And so I try not to look at her when I'm trying to have a dialogue of the issues. I'm going to assume that people would be following the law because I think the penalties would be very, very harsh. And I don't have the penalties of if someone actually moves forward in breaking, you know, the protocol or breaking code. But I'm going to assume they're pretty severe. They're pretty severe. I think the question at hand is, and that would actually fall into every single other government entity, is whether or not closed sessions are even allowable. If we're going to start questioning whether or not people are doing what they're supposed to be doing, if legal counsel is present, if they're following all the rules we have statute, I'm assuming that people are following what they're supposed to be following. That's my ethical way of thinking is that we all are adults. We're hoping that people are following the rules when they're in closed session and making contracts, especially when we already have them in written law. I think the concern that we have here is that it's not public. But then again, every government entity, including the state legislature, does things behind closed doors and makes negotiations behind closed doors. whether it's right or wrong I struggle with it as well but what did the governor say that's how the sausage is made and one of his comments on on contracts don't necessarily agree but the rules are there I'm conflicted with this one I really am because I understand what you're trying to do which begs the question as to the system itself but the rules are already in place and It's whether or not we have the ability to see whether or not they're being followed, which goes again. Every entity has the ability to have closed sessions and make decisions on that end So I would love to hear Senator with Chairwoman Senator Cabaldon thoughts on this

I'm sure Senator Cabaldon will have a couple of items to add to this.

Thank you so much. And I want to thank the author for bringing this forward because this is just, and for AFSCME3299 for leading this effort. I couldn't agree more with what the author said. I'm curious though as to the UC's position because you'd mentioned that this was an operational crisis, and I'm just wondering why it would be such an operational crisis. because I would say, I mean, any, even though you do have, as has been stated you know a policy that seems to be sort of just the bare minimum in some cases without a recusal process which is hard because it is not public I don't see how this could be an operational crisis, but please explain and indulge me on that

Yeah. And then receiving a very large compensation on the UC side and then serving on the board. How is that not viewed as a conflict of interest in that on that level? And it's not just the compensation part of it. If CareDx has a CEO that has values that are just so dissimilar from the UC system, why would that even be allowed? I would think that that would be just an appearance of impropriety on top of any issue that this company had. If they were stealing thousands of dollars from – that's scary to think about. I understand. You know, so that's, yeah, in addition to, I just think that that adds an extra layer of just appearances all around that just don't seem to, you know, be in alignment with anyone at the UC system. In some cases, it could. And I think what I would like to see is the UCs come together, come, you know, based on this, come up with a more comprehensive policy, independent review. it needs to be able to address these appearances of impropriety and even at $500 and a dividend so that's still compensation nonetheless but you know that's something that I think needs to be addressed but I would just I'm appreciative of this bill because this is was news to me that this was actually happening I mean you see you hear it kind of happening but then it's really highlighted and you think if we can't do this as elected officials and I actually used to work for a company called Microsoft let me tell you how stringent those policies were I couldn even give a water bottle to an elected official That how stringent the policies were And I just so dumbfounded that the UCs would not have that similar policy If you want to act like a corporation, then let me tell you, corporations also have that very stringent policies. But if you're a public university system, even more so. So all that to say, supportive of the bill, and thank you for bringing it forward.

Thank you, Madam Chair, and thanks to Arthur, who is a steadfast champion and won't be silenced on ethics or conflicts of interest or the importance of integrity in government. I appreciate the efforts going on. I do have some concerns, and they're pretty significant, but I just want to put that on the table. I think mostly for the author's close, although if I'm getting some of the technical issues wrong, happy to understand those as well. First, I think it's important to, having been both a professor and a mayor, the University of California is not a city. It's not a school district. It's not a city government. It's not an agency with its own locally elected board. It's much more like the Department of Health Services or any other state agency. It's not like that either, but it's much more like that. And so when we talk about open meetings and closed session and behind closed doors, virtually all decisions that are made around contracts in state government are in that frame behind closed doors because there isn't a board or an agency to prove every single thing. And, you know, if the regents don't and can't manage every single contract for every single thing at the campus, we might put them on their agenda for them to review. But they can't possibly process everything, just as there's no board. Even we don't process everything for the entire state of California. So just the notion of recusal in an administrative environment is a well-established one. even even actually in City Hall the city manager can be required to recuse themselves the director of economic development can be required to recuse themselves regardless of whether it's in a meeting per se or a vote is being taken so I think we had some discussion about recusal isn't a thing it's absolutely a thing and it is required by all of state laws as well as the university's own policy when it when it comes to this I the the the bill and at at least in its current form, applies to essentially all non-public agency entities, regardless of their corporate form, which includes then private sector entities organized as nonprofits. And here's where the university, as the representative for UC Davis, the importance of the university in the community is not to be minimized. So if the Vice Chancellor of Community Relations at UC Davis serves on the advisory board for the Yolo County Food Bank, which is a nonprofit organization, and the university applies for and wins a grant from us for a basic needs center on campus that they want to operate in conjunction with the Yolo County Food Bank, they absolutely should be contracting with the Yolo County Food Bank, notwithstanding that advisory board relationship. both because that's going to be the most capable provider locally but also because the university should be supporting and contributing to that to the local economy the local civic cultures as well so I think you know there are good reasons and the bill I think I think is too broadly character too broadens application to to all non agencies and then to advisory bodies and other sorts of things that that that vice chancellor has no no financial interest in the food bank and they just they on behalf of the university are simply supporting an important community institution and that should not require that that community institution to not be eligible to contract them in the university around around around the provision of those services and i think similarly don't i absolutely don't want an environment where medium and smaller sized businesses and nonprofits even big corporations but they'll figure it out on their own where where they're worried that now they are the ones responsible for monitoring this and so they and they're not really sure they how would they know that the that the assistant vice chancellor at UC Davis owns stock through their 401k or their 401b program how would they even know so they then have to find that out you know any interaction with the university and I think this gets to one of the fundamental policy issues is I think contracting out ethics to the private sector ethics enforcement is not a good public policy that if I share a lot of the concerns all of the concerns that the author raised around the around the ethical issues and the senator Gonzales also emphasized but that's on us that is on the public sector the courts the FBPC and other agencies and the administration the university itself to implement and I'm very weary of saying that it's the private sector's responsibility to enforce these ethical obligations that that university executives already have under existing state law and and and university policies that to me is a fundamental policy question which is hard for me to get my head around that Microsoft is going to be responsible for enforcing our own ethics laws in that respect. But I don't want a chilled environment either where local companies and others are like, hey, it's just too much trouble to contract with the University of California for Sal's Tacos in West Sacramento to do a contract for events. It's just like I don't know how to go through that. I know that somebody from UC Davis is always over here getting tacos, and I ask them to be part of our thing or whatever, and they help me with my taxes. They're not going to be covered by this bill, but the notion that doing business with the University of California is harder than for any other thing in the state. I just think when you talk about operational failure, that seems a bit exaggerated to me, but I do see a problem in that regard. and one other example we've you know in our regional in this region we created a region-wide nonprofit on workforce and education develop workforce development and education coordination and our higher ed partners were work we're kind enough to loan us one of their vice chancellors to be the CEO we and with with you know some extra compensation paid by by the nonprofit regional collaborative that's that would have been precluded under this kind of arrangement and the university has an important role to play in our in our communities in our regions and so I appreciate the intent of the bill I am worried about the structure of the of outsourcing ethics and about some of the implications so I know I can't I can't I think I can't support it today but but do but do understand and agree with Senator Gonzalez in particular that the university has to do a better job itself in terms of enforcement and transparency and sunshine in these issues too, that the university has been entrusted by the people through the Constitution with extraordinary which it's our constitutional obligation to respect but the flip side of that is the university has a special public trust obligation to lead the way on ethics and conflict of interest and look forward to them doing that. So thanks to the author. I can't support it today but appreciate the efforts that are going on here and hope that the university responds in kind.

Thank you, Madam Chair. I will be supporting the bill today. I would though appreciate going forward much more clarity on the distinctions between what government code section 1090 does currently versus what this bill would do I don't understand in the analysis the side-by-side distinctions. The analysis seems to say that 1090 only requires recusal, which is not true. 1090 requires the contracting entity on the government side to not enter into a contract where there's a financial interest by one of its voting members.

I respectfully ask for an aye vote.

It's a motion.

Cabalden.

Troy, no.

Cortese, aye.

Gonzalez, aye.

Reyes, aye. And that bill is four ayes, two noes, and that bill is out. We're going to go ahead and lift calls since we have all members here.

Cortese, aye.

The consent calendar is out 7-0. File item 2, SB 1006.

Cabaldon, aye.

Cortese, aye.

Reyes, aye. That bill is out 7-0. File item 3, SB 1058.

Cortese, aye.

Reyes, aye. That bill is out 7-0. File item 4, SB 1140, Cortese.

Reyes?

That bill is out, 7-0. And everything's done? There's nothing else? Okay. Great. And that is it and concludes our agenda for today. The Senate Education Committee is adjourned.