Senate EQ — 2026-03-18

Good morning. I am pleased to be here to present SB872. The first comment is that we will be accepting the committee amendments. My staff informs me that the committee was very cooperative and helpful in making the bill a better product. And I think it's going to show this is a rare moment because it really brings together parties that are not always on the same page. For example, Northern California and Southern California don't always agree on the water issues. The environmentalists and the water contractors don't all agree on the on how that water should be distributed and used. But this is a great opportunity and we want to see this move forward. So it bridges together traditional opponents. It's bicameral and bipartisan. So we also have about 60 sponsors outside of the legislature right now. So it's a good bill. It attacks two major problems. Basically, there's a subsidence in the valley where the aqueducts run. Now, I want to say the aqueducts are gravity fed, and when the land drops, the aqueducts are less capable of carrying water. If the subsidence continues further, then the aqueducts will be unable to produce and deliver water to Southern California. So that'll start happening. And they think, they're saying by 2040, 2045, there'll be a complete failure of the aqueducts, which serves 27 million people. So this is a significant problem, a significant risk, and it's urgent. We need to start working on the subsidence as soon as possible. The other problem is the delta levees. Some of these levees were built in the 1800s and many don't have any of the Corps of Engineers safety standards. And so we're significantly risk of levy failure, which would endanger, let's see, $22 billion in state assets. So we're asking to spend a fairly modest amount of money, at least relatively modest, to save a significant risk. But not only that, but if the levies fail, we're also putting people's lives at risk. So this is a significant and urgent problem, both with the subsidence and with the levee failures. So what has led to the subsidence is over pumping of groundwater in the valley. More and more water has been taken out of the groundwater and the groundwater sunk. I've Heard some numbers now they're kind of scary. I don't want to scare the committee too much, so I'll leave those behind. But what this does, what SB872 does, it directs $150 million a year to fix the subsidence and $150 million a year to fix the levy. So we're looking at both of these problems. We want to make sure everybody in the state is satisfied. Basically, the. One of the most critical functions of the state is to provide infrastructure, and water is the most critical factor. We cannot let this problem continue. So with that I mentioned we have 60 or more organizations already on board with this, including from Southern California, from Northern California, all around the state. And today I have two witnesses. Morgan Snyder from Restore the Delta and Jennifer Pierre from the state water contractors. So if they would approach the bench or approach the microphone or bench.

Chair Blakespeare and committee members, my name is Morgan Snyder and I am here today with Restore the Delta. Thank you so much for allowing me to provide comments on SB872 today. This bill is an important step in prioritizing investments in the Delta for the Delta, as well as ensuring drinking water supply for 27 million Californians. There are currently 1100 miles of levees weaving throughout a mosaic of islands in the Delta. These islands and waterways are home to Delta agriculture, commercial fishing, recreation and tourism industries, tribal cultural resources, and one of the most diverse ecosystems on the west coast of the Americas. Collectively, the Delta economy makes up nearly $7 billion annually and is home to 4 million residents across the five Delta counties. Delta levees are foundational in protecting these communities and economies from flood risk. The Delta levees were constructed by in the late 1800s, early 1900s, and have not been upgraded in over a century. In fact, many of these levees do not currently meet the U.S. army Corps of Engineers standard. These levees are also unique in that they are constantly holding back water. And as climate change impacts weather patterns, Delta levees are coming under new stressors from extreme precipitation events, increasing the risk of a breach or boil which would threaten human lives, property, infrastructure and drinking water supplies across California. Repair and maintenance of levies are currently funded through a combination of state, local and federal funding streams. The Delta Stewardship Council has done a significant amount of research on what investments are needed and have provided a tiered approach to investment prioritized by the level of risk. However, and critically, this strategy lacks Prioritization and funding SB the SD 872 takes an important step to identify and allocate funding resources for this critical investment in Delta levies. The proactive investment of 150 million over 20 years would protect upwards of $22 billion in state assets and save the state billions more on emergency funds to support the fallout from levy failures. Restore the Delta believes that this bill embodies the coequal goals outlined in the 2009 Delta Reform act, protecting and restoring the Delta as a place and ensuring a reliable drinking water source for Southern California. I want to thank Senator McNerney today for spearheading this important legislation. Thank you so much.

Thank you very much. I appreciate your testimony. If there's anybody else in the room wishing to express support, please come forward and state your name, organization and position. Good morning, Madam Chair Members.

of the Crescenta Valley Water District and

Good morning.

District of Southern California in support.

Karen Lang on behalf of the Delta

Thank you.

Good morning. Jose Reynoso, the general manager for the San Gabriel Valley Municipal Water District and

Carol Mahoney with Zone 7 Water Agency in strong support.

Good morning. Beth Olasso on behalf of Inland Empire Utilities Agency and the Municipal Water District District of Orange county and strong support.

Good morning.

Good morning. Taylor Trifo with Conservation Conway representing the Tulare Lake Water Storage District in support.

Alex Lehmer on behalf of Defenders of Wildlife and support.

with the Gualco Group.

Agency and San Bernardino Valley Municipal Water District in support.

Chris Anderson, on behalf of the California Chamber of Commerce, we have a support if amended position. The funding needed here is urgently needed right now. Only state owned conveyance facilities would be

We're requesting that federally owned conveyance infrastructure also be eligible for the funding. Thank you. Good morning. Senators Matt Cremins, California Nevada Conference of

Thank you.

Chair members Keith Dunn, on behalf of State Building Construction Trades Council as well as the District Council of Ironworkers in strong support.

No.

Thank you, Madam Chair.

I do want to make sure I'm fully kind of understanding the practical impact of the bill and I'm going to be supporting it, but I had some questions. So my understanding is that when it comes to water conveyance projects, California ratepayer costs can be lowered by seeking as much money from as many sources possible, including our federal partners, which typically require either local or state cost share. Is there a reason the bill is seeking to limit the use of state funding to only proportions of arterial conveyance that is owned by the state rather than arterial infrastructure that is statewide. That's a statewide importance. I just need some clarification on that. I'm not

Yeah.

Well, thank you for the question. I'll take a stab at it. And if one of the witnesses wants to improve my answer, that would be acceptable. Basically, there's a bright line between the state and the federal water projects. The Central Valley Project is the federal project. The state water project is the state project. We typically. The state typically funds the state canals and the federal typically funds. And they have different users. Basically, the federal government just announced $540 million for support of the federal part. And so we take responsibility for the state part. So it's just a division of responsibilities.

Is there any other. Okay, that's it. Thank you.

Well, you can see we have a very wide, broad base of support on this from labor, the environmentalists, all the water districts that have come forward, and there will be more. So it's bipartisan, it's bicameral, and the state has an immense responsibility to make sure that the state has the water it needs. The people in the 27 million people that depend on the state water project are in need of this. The longer we put it off, the more severe the problem is going to be and the more likely it is that people will lose supply of water. So with that, I ask for an aye vote.

Thank you.

Good morning, Ochoa.

best ever.

Okay, so just to be clear, you do not have any lead witnesses in support?

Okay. If there is anybody else in the room who would like to come forward and express support, please come to the microphone at this point and say your name, the organization you represent, and your position on the bill.

Melissa Kostachuk with Western Growers and strong support. Thank you.

Madam Chair members Andrew Antwee with Schioder, Antwee, Schmelzer and Lang here today on

Good morning.

We appreciate this bill. Sometimes, often regulations and the impacts of

Thank you.

Okay, thank you very much. Do we have any lead witnesses in opposition who would like to come forward? Welcome. Please come to the microphone. You have two minutes and you're welcome to begin when ready.

Madam Chair Bill McGavin with the Corporate Coalition for Clean Air in opposition. We definitely agree with the author's intention to keep costs lower for Californians, but this bill is not the way to do it. I think that your committee analysis does a good job of going through the issues and concludes ultimately, SB981 requires an unbalanced and expensive economic analysis which would delay necessary rulemaking from a single key state Agency. I want to confirm that based on many years of experience at that agency. We spend a lot of time in rulemakings at carb. They are always very lengthy. And I've been involved both before and after the Syria was required. And the Syria has added considerably to delays in rulemakings. This bill would add more red tape delay. And the reason why that's important is the health of Californians. The author talked about global impacts. He didn't mention that California has by far the worst air pollution in the country. And so we need to be expediting getting relief to Californians from that pollution and the sickness and very real health costs that it imposes. 981 would mandate that CARB conduct analyses that it's actually unable to to perform. They don't know what the costs of gasoline are going to be. They don't know when a president will start a misguided war in the Middle East. They can't predict the oil companies taking advantage of the mystery gasoline surcharge that's been identified by both academic and state economists. So for those reasons, we don't think that this bill is the answer. It would actually result in dysfunction and additional litigation.

Good morning. Michelle Canales with Union of Concerned Scientists. Respectfully opposed.

Thank you, Madam Chair. I think you hit on one really great points. I think you're right that this isn't the sole, number one, even majority sole contributor to the affordability crisis. But I do recognize that it could play a part, and it does play a part in that. And we should be looking at certain things outweighing the benefits and so forth. So I get the intent. Senator, I just have two things I wish if you could address. The first one is I read in the analysis and the opposition mentioned that car CARB does not have the capacity to do this. I recognize with LCFs, LCF, yes, they're able to do that because it's specific to just what's being increased on the gas prices. CARB has the purview of so many other different things. Might be a little bit difficult to really hone in on the cost increase on that specific project. The second thing if you could address is regarding the lack of robust approach here. You're just looking at the costs and ignoring the benefits altogether. I think it'd be important to compare cost and benefits of a certain thing. For example, the analysis talked about, sure, this is going to cost a consumer $4 extra, but on the other side, did it prevent 100 kids from going to the hospital with asthma did it prevent X, Y and Z? So ensuring that there's a comparison of that would be important. I will be supporting your bill today. Those two things are outstanding for me. I think if you can further add to this bill, it would be better positioned to really look at things in a more holistic approach. With that, if you could please address those two questions.

With regard to capacity, I know that these economic analyses are not easy. The Syria analysis does take time. The legislature chose to impose that analysis on all regulations because regardless of the time that it takes, the cost of regulatory impositions on the economy is still a very important, important consideration and we need to know that. And I'm seeking a more granular approach because of the affordability challenge that we have currently. Now we talked about the impacts of regulations and that's not the only impact of cost of living and that's true. Other impacts of cost of living, as was stated, is in place inflation, supply chain issues, housing affordability. I would say the latter part of that is regulatory requirements. But the state we can't affect any of the other impacts on the cost of goods. We can't affect inflation. We can't impact the supply chain challenges. Really the only way that this legislature can affect cost of living increases is through regulatory reform. There really isn't any other influence the state of California can have on cost of living except for the cost of regulatory issues. And I realize CARB isn't the only one. But that gets to the capacity issue and that is other entities are general fund funded and therefore increased cost to do increased analysis is a challenge under today's budget challenges. But CARB is a special fund influenced funded by special fund and it might be a little easier to find those increased costs. I'm not saying it's going to be easy. It won't. And you talk about the costs.

They probably didn't have it when Syria was first initiated. So we have to adapt to new things and it's just it's an issue of priorities. Do we believe that it is important to understand the impact of a regulatory action on the cost of living of everyday citizens and businesses? If we believe that that's important, then we need to try to address how to do it. And as I said when Syria was first implemented, I rather doubt that the entities that have to meet that knew were perfectly equipped to do it at the time, but they are now the cost and not benefits. And the health impacts. It was mentioned that California has the first worst air quality of any state in the country. I think if you look at that by region, it's not true. There have been tremendous improvements in air quality since the, let's say, go back to the early 70s. Emissions from fossil fuel vehicles are maybe a percentage of what they were in 1970 and continually being reduced and that has significantly improved air quality. But when we talk about air quality, that is the health and symptoms of asthma that air quality might create, that's not carbon dioxide. Carbon dioxide is not a toxic air pollutant. The health impacts with regard to greenhouse gas emission reduction has to do with the impacts of climate change on health and there is no benefit there. We cannot by ourselves affect the greenhouse gas emissions in the atmosphere. As I said, they're greater now than they were when AB32 was passed. The governor talked glowingly of the Chinese economy that produces so many green products, and that's true. But they produce those with an economy that is entirely driven by coal fired utility plants. China and India, as long as they don't follow our lead relative to the emission of greenhouse gases, we're not going to get there. So relative to this cost and benefit, we're not achieving any benefit because we can't drive climate change by ourselves. I'm not saying, nor have I ever said that we shouldn't do these things, and I agree that we should. But it has to be with an understanding as to what sort of burdens there are on everyday lives and on businesses and on the economy. But at the same time, to the extent that we can address these things to make you more comfortable with an I vote, I definitely want to absolutely

Well, I know, and I, and I. One of the things of one of the principles, principles of salesmanship, which I know a little bit about from my private sector business, is when you close a deal, you shut up. And I thought about that before I said it. But I think it's very important to understand the nature of the challenge and the difference in air quality relative to health issues and air quality relative to greenhouse gas emissions. They are two different battles. And so I just had to point that out. But I very much appreciate your support. And we will talk more about this.

Thank you. You answered a lot of my questions in your rebuttal there. So you're still on Board, though. Right? Okay, good. So, you know, California's energy sector is roughly 8% of our economy. And when that sector experiences price spikes or volatility because of regulation, the rest of the 92% of our economy is impacted. And what I hear most from my district over the years is that the price of energy are killing our families quite literally in their pocketbooks. You know, the price of getting to work, of getting kids to school, the price of electricity, of heating your home, of cooling your home, it's all going up. I also hear from businesses from the trucking industry who are perpetually having to keep up with new regulations from either CARB or from the local air districts. And it's regulation. It's layer upon layer upon layer. And even when they are new regulations are proposed and passed, our businesses may not feel it four years later, and then they're shocked and they can't sustain and they're selling equipment and they're selling their businesses. There are real economic impacts that are currently not considered in a vast majority of CARBS regulation because they have a sort of really goal. It's to meet air quality standards, it's to meet climate goals. And I think this is important to say to carb, no, what you're doing impacts real people. Now, to provide a little bit of clarity, your bill is not one. I love the bill. I'm supporting it. I have a similar bill. Can you kind of explain to me, because the impact, the economic impact isn't going to be required for every regulation and every program from my understanding.

This bill will not require an analysis of every new regulation. It's specific to a dollar amount. Is that correct?

Thank you.

Thank you very much. I appreciate it. I think I've made some of the more important points that have been made on that side of the dais, but I would add with regard to the redundancy, the burdensome nature and singling out carb, I don't see a redundancy unless to do a macro analysis and then try to translate that to a microanalysis is redundant. I would agree with you, but I don't think that's redundant. And the macro analysis doesn't tell us how it affects individual everyday lives. So I don't think that it's redundant with regard to the burden given the increase in the commodities that are affected by CARBS regulations. Again, I'm not saying that CARB is the only cause of that. But there are impacts and that's a burden on everyday Californians and it's a burden on businesses. So is it a burden on CARB to do this analysis? Yes, it is. As I said, when CEREA was first implemented, they probably did not have the capability to do that, but they do now. And we figure out how to accomplish things. And with regard to CARB only, I'll repeat something I said before. The only way that we can affect cost of living issues is through regulatory reform. We can't impact inflation, we can't impact supply chain issues. Think about everything that impacts the cost of food, gasoline, utilities, the cost of doing business and identify those factors. And for the most part, we can't affect them. But with regard to analyzing it from a regulatory perspective, we can. So, and with regard to CARB only, as I mentioned, other entities and it would be very reasonable, reasonable to spread this responsibility more widely. But we have budgetary pressures now with regard to general fund funded departments. CARB is special fund funded. And so that issue is a little bit easier to navigate. So with that I would respectfully and gratefully ask for an I vote.

Thank you. Madam Chair and members, I'm pleased to to present SB887. I want to begin by thanking you for your leadership and your staff's collaboration on this bill. And we'll accept the committee amends. This bill would ensure that data center projects which we hear more and more about today. The circumstances in California with respect to certainly hyperscale data centers have changed in just the last year. California ranks third in the nation. The number of data centers that are necessary infrastructure to serve technology boom, certainly serving artificial intelligence technology. However, in the aggregate, those don't match some of the things we're seeing in particularly inland portions of the state with large areas of land availability. To see hyperscale massive scale data centers that have a tremendous adverse impact on resources, on environment potentially and certainly on energy and energy costs. This bill would ensure the data center projects go through CEQA review, but it creates a pathway of certainty for them with respect to making sure that there isn't wasteful or unnecessary extended judicial intervention in a way that does not serve an environmental purpose. The rise of this technology, as I noted, and the build out of these centers, some of which for example are at meta scale the size of Manhattan, certainly one in Louisiana, one set to consume over 5 gigs equivalent to 5 million homes. These data centers consume massive amounts of energy and water, require large investments in the grid, including at often time using diesel or other fossil fuels to ensure sufficiency of power availability without proper guardrails, without proper incentives to ensure that these are done correctly. These can be disastrous for the state on an environmental scale and on an economic scale. An example in my district alone, a 700 acre, 330 megawatt project alongside a residential community and an elementary school has broken ground with literally no public input and the assertion on the part of the developer that it is ministerially exempt from ceqa. This bill will ensure that centers are not exempt. Creates a pathway of certainty for them to get proper and appropriate review and in exchange appropriate benefits to community, to workers and to protect the environment. It ensures communities near these centers are protected from polluted air. Provide public comment in all facets and pure transparency throughout the process. With me today, I'm happy to have Matt Freeman with Turn and my good friend Corey Schumacher with IBEW Local 569.

You're welcome to begin when ready. You each have two minutes.

Thank you for your comments. Thank you. Thank you.

Thank you.

Okay, great. Thank you. Anybody else in the room wishing to express support, please come forward. State your name, organization and position on the bill.

Comedian Chair, my name is Sam Uden from Net Zero California, a co sponsor of the bill. Thanks to the center for his leadership which we see is a key component for the California to establish a nation leading standard from affordable and clean data centers. Thank you and obviously support the bill.

Clay on behalf of the city of Imperial and strong support.

Morning Madam Chair members Marty Lopez with the California Nurses association in support.

for support and concept.

Thank you and good morning Chair Blakespeare, members of the committee, my name is Kara Bunder and I serve as a state Policy Director at the Data Center Coalition. I'm here in respectful opposition. Unless amended to SB887, the data center Coalition is the national trade association serving as the voice of the data center industry. And our members are leading data center owners and operators and companies that lease large amounts of data center capacity. Data centers are the high tech industrial hubs of the 21st century. They provide the critical infrastructure for everything from financial services and healthcare to advanced manufacturing and AI. SB887 proposes a regulatory environment that would significantly hinder data center development in California by forcing even small scale code compliant facilities into a discretionary process. The bill introduces years of risk and litigation delays. Modern data centers utilize sophisticated liquid cooling and advanced electronics. Excluding them from the same protections offered to other high tech facilities penalizes the very infrastructure California needs in order to remain a global leader. While the bill offers streamlining for environmental leadership projects, the criteria are virtually impossible to meet. Requiring 100% zero carbon electricity for hourly needs within five years, 75% of which must be newly developed, exceeds the state's own aggressive goals. Additionally Additionally, the mandate for four hours of zero carbon storage at 100% peak demand is a requirement not placed on other industrial customers in the state. Finally, the bill creates a unique financial liability by requiring data centers to fully recover all grid investments if they cease operations. Singling out one industry for stranded asset risk while not applying the same treatment to heavy manufacturing or large commercial campuses with similar demands will inevitably drive high paying jobs and the significant tax revenue associated with data centers to neighboring states like Arizona and Nevada. To give you an idea of what is at risk from 2022 to 2023, California's data center industry directly and indirectly generated $23.88 billion in state and local tax revenues, and the latest government spending suggests the data center industry's total state and local contribution of $10.7 billion in California in 2022 was sufficient to fund almost half the construction, maintenance and operation of highways, streets and related structures in the state, including toll highways, bridges, tunnels, ferries, street lighting and snow and ice removal. Our members are committed to paying for their full cost of service for the electricity and infrastructure it uses and be a good neighbor in the communities where they operate. We urge the Committee to resist advancing SB887 in its current form and we welcome the opportunity to discuss amendments with the author. Thank

Good morning, Madam Chair, Vice Chair and members of the Committee. I'm Ahmad Thomas, CEO of the Silicon Valley Leadership Group and we must respectfully oppose SB887 unless amended. The Silicon Valley Leadership Group is the leading business association for Silicon Valley's most innovative companies. Our members reflect the full breadth of the region's innovation ecosystem system and play a major role in supporting the state's General Fund. California's innovation economy depends on predictable, objective and timely permitting and unfortunately, SB887 would move us in the opposite direction. Our opposition to the bill centers on three core areas of concern. First, it would single out data centers for uniquely burdensome sequence treatment despite their central role as the digital backbone of the 21st century economy. SB 887 Bar Data centers from CEQA Categorical exemptions Exemptions that remain available to similarly situated industrial facilities and does so without any project specific environmental finding. This is a targeted carve out that treats one type of technology use differently from similar high tech industrial projects. Second, while the bill gestures towards streamlining via the environmental leadership pathway, the eligibility terms are practically unattainable. The requirements of 100% zero carbon electricity on an hourly basis within five years, with 75% newly built and a mandate of four hours of zero carbon storage at 100% of peak demand go well beyond what is currently feasible at scale. Third, SB887 imposes a unique stranded asset liability, requiring operators to fully repay all grid investments if operations cease. Let me be clear. SVLG supports environmental stewardship, grid reliability, and paying the full fair cost of service. But policy must be technologically feasible, non discriminatory and aligned with established CEQA principles. For these reasons, we respectfully urge the committee to amend the bill so that it aligns data centers with similarly situated industrial customers and with current technological feasibility. SVLG stands right ready to work with the author and stakeholders on balanced amendments.

Good morning, Madam Chair.

Thank you. Good morning. Chairmembers Jose Torres with TechNet and respectful, respectful opposition as well.

behalf of the California Chamber of Commerce and opposition.

Chair and members Jasmine Ivankola with the Cal Asian Chamber. We oppose unless amended. Thank you.

Thank you.

Senator Padilla, I'd love to give you an opportunity because I'm all in with what you're doing. If you could just address the opposition, say they're going to go to our neighboring state. Can you share a little bit more about your thoughts on that?

That was a rousing thought, sounding closing even, but we're not even quite there yet. So I'll return to the senator mentor. Is that good? Okay. Yes, Vice Chair.

Sure. I'm happy to start again. Kara Booner with the Data Center Coalition. So to your point, Senator, our members do work very closely with the local authorities and agencies that are responsible for approving the these projects. They're, you know, following local codes and local zoning regulations as well. You know, we talk a lot about the energy use and the water use of data centers and of course, those are also often regulated at the local level. And our members are working with those folks to make sure that they are in compliance with what is being required at those levels. I share your concern with having, you know, this overly prescriptive approach at the state level and allowing the, you know, local authorities to handle what is appropriate for those economic development projects in their community.

Briefly. Madam Chair and members, thank you again. I just want to address the latest question in response. I think a great example of why this bill is needed is the one I cited with respect to one large hyperscale application pending in my own district. This is someone who is proposing a massive data center that would, on reliability and storage, rely on new connections to fossil fuels in an underinvested community of color that already has some of the worst environmental justice and public health challenges in the entire state. An area of my district that has poverty rates double the state average, asthma and childhood disease rates much the same, directly attributed to poor air quality and the emission of fossil fuels in the region and the lack of environmental mitigation, the lack of community benefits, and a project proponent in that particular case who's asserting complete exemptions, ministerially based on zoning, based on, you know, and is now being litigated in the courts in Imperial County. That's exactly the scenario that demands that we set standards for these types of projects. And with that, Madam Chair and members, I would at the appropriate time when you have a quorum, respectfully ask for an I vote.

Senator Blakespear?

Blakespeare. Present. Valaderis. Valaderis. Present. Alan? Alan? Present. Dali. Gonzalez. Hurtado and Menjevar. Menjewar. Here.

Thank you.

Senators Blakespeare?

Blakespeare?

Validaris?

Valladares?

Allen?

Alan? Aye. Dolly Gonzalez? Hurtado. Menjavar.

Padillas, SBA 887. Benjavar. I.

Thank you, Madam Chairman.

Good morning, Madam Chair and members. Senate Bill 1008 would renew the exemption from the California Environmental Quality act for the closure of an at great rail crossing by order of the California Public Utilities Commission that expired on January 1, 2025. This is a non controversial measure that restores a long standing policy to ensure timely action on on rail safety. The PUC will continue working with all relevant stakeholders when assessing the safety of an at grade rail crossing. The reinstatement of this prior exemption will better protect the public by allowing the PUC to continue exercising its authority to alter or abolish dangerous crossings in a timely manner to protect public safety. Joining me today is Peggy Igbo Egbuhay, Senior Director of Public affairs for Union Pacific Railroad who is happy to answer questions.

Thank you very much, Chair Blakespeare and honorable members of the committee. Peggy Egbuhay. I am the Senior Director of Public affairs for Union Pacific Railroad. I have been in my current position for three years as as of last Sunday and before that I was with our public projects department, Engineering for about a decade I've been with the railroad. This is my 32nd year. So I have a little bit of information about how we manage projects on the railroad side. And I really just wanted to, you know, thank Senator Ochoa Bogue for bringing this very, very important bill forward for the exemption foreclosure of at grade crossings. Union Pacific strongly endorses the USDOT's policy to eliminate redundant crossings that are at grade. And this is for safety. No crossing is a safe crossing, but it has to be done in collaboration and in partnership with the road jurisdiction and with PUC as well as the operating railroad in California, we have about 8, 8500 at grade crossings that are active throughout the state. So Union Pacific has about 2,000. And of course there's several other operating railroads in the state. So, you know, not only do we work in collaboration with the local road authorities and jurisdictions, so think of the state. If the state owns the crossing, the city, the county, it's. It's an agreement between Union Pacific, in the instance of Union Pacific, and that's who I'm testifying on behalf of, and the county, city or state. There's also an incentive program that Union Pacific has to contribute money to close a crossing. That contribution requires a federal match up to $100,000. So there's been a lot of conversations I've had with numerous cities over the tenure of my career, numerous counties, about the opportunity to close various crossings. It is a federal law to eliminate redundant at grade crossings. So of course we support that. But we also support doing it responsibly and you know, in collaboration, in agreement with all parties. I stand ready for any question. Questions you have.

Madam Chair members Tyler Waka, on behalf of the California Business Properties association and strong support.

Reed and associates representing BNSF Railroad, in support. Thank you. Okay, Anyone else in the room wishing to express support? Okay. Anybody in the room wishing to express opposition, please come forward as a lead witness. Not seeing anyone. If you would like to come forward and express opposition at the microphone, please do so. I don't think Senator Strickland is expressing opposition to this bill. No. Okay, well, we will bring it, we will bring it back to the committee. Any comments? Okay, good. Well, we'll turn it back to you, Senator, for close.

Okay, thank you. Who was. Oh, the vice chair. Okay, great. The vice chair moves the bill and the motion is do pass to the Senate Committee on Energy, Utilities and Communications Committee. Assistant, please call the roll.

Aye.

Aye.

Aye.

Aye.

Aye.

Aye. Okay, that's four to zero and we will keep that on call. And let's, let's see, we have two authors here. Senator Strickland. Is next. And if any members of the committee need to leave and you would like to record the vote, we can go to the votes for the earlier bills. Are you listening to me, Senator Allen? Senator Menjevar, Vice Chair. Okay. Senator Allen looks bewildered.

Okay, great. You're welcome to begin when ready. You have two minutes.

Well, thank you very much. Any other witness in support. If you'd like to express me too support, Go ahead.

There's a question for the gentleman who just spoke. Is there anything in this bill that specifically helps the domestic production or is it just across the board?

Right.

Senator, if I might add. If you wait, I might add.

Thank you.

But then I just want. On that, on that point. Yeah, on that point. Look, I think the person testifying is absolutely correct. But those are midterm long term solutions that we need to do for domestic production, which I support, which I think would help grow our economy. But people are feeling the pinch right now and people are having to decide between a gallon of milk and a gallon of gas. And there's not much that we can do to collectively as a legislature to drop prices immediately. And this is one of the only options that we have. And this is an option that would drop grass prices by A$8 a gallon, 1100 per family. I do think we need to work on that. And that's why we asked the governor to go in an emergency session. Because this, this issue is not going to go away. This is only a temporary. And I always say this bill is only temporary. That's why it's a year. Because we need.

Solutions.

Sure.

Hi, Chair Billy Spear and members of the committee, thank you for the opportunity to be with you today. I'm Sam Wade, Vice President of Public Policy with the Renewable Natural Gas Coalition. We represent over 300 member companies selling renewable natural gas in California. And I'm here today in opposition to the portions of SB 1035 pertaining to the low carbon fuel standard. We agree with the committee analysis that this bill would create a fatal pause for the clean fuel industry. If the low carbon fuel standard was suspended, investor confidence in California's overall support for the transition to clean fuels would be decimated. The LCFS is a cost effective and proven method of meeting our greenhouse gas goals. The program works well because it is technologically neutral, geographically flexible and open to private sector innovation. As a result, since 2011, it has delivered the cleanest fuels at the lowest cost to California consumers while avoiding any significant impact on conventional fuel prices. Because of the lcfs, RNG growth in California has occurred rapidly. California now has the greatest total number of RNG projects of any state. 235 projects across food waste diversion, landfills, wastewater and agricultural activities. It would be a tragic irony if California was to suspend its primary program to transition off of conventional fuel due to short run swings in the price of oil caused by the conflict in Iran and other geopolitical factors unrelated to clean fuels. With respect to global leadership, there are other states working to follow California on lcfs. Four state level programs are in place and eight in active development. Canada has a program both nationally and provincially in British Columbia inspired by California. Those efforts would also be harmed significantly if California Fails to stay the course. We recommend against any LCFS programmatic changes. Currently, recent LCFS market uncertainty, created in part by extended deliberations both at CARB and here in the legislature, has weakened the investment thesis for private capital trying to help achieve California's goals. We need to refocus on stabilizing incentives to invest in climate action, including clean fuel, and fully embrace the LCFS as a key tool. Thank you.

Thank you, Madam Chair, Members of the committee, Keith Dunn here on behalf of the State Building Construction Trades Council. I didn't bring any props, but I'll be happy to provide each and every one of you the two statewide elections in which the voters of California endorsed spending attacks on fuels to invest in their roads. Let's remember, these projects not only fund careers within the union and non union construction workforce, but also provides critical safety projects that every citizen that travels in California to work, to school, to pick up your children depends upon every single day. Starting and stopping those is a more dangerous impact to our economy than to anything else. I would also offer that this is not the only solution. We need to stop trying to drive out our refining interests here in the state of California by continuing to look at opportunities to drive that business out of state. I'm going to have the opportunity later in the session to about talk on each and every one of you about the problems with the continued push to drive refining out of the state. But the suspension of the gas tax has been rejected twice. Once when it was passed, once when it was tried to be recalled. The voters want this because they understand that our infrastructure is the key to the economy. I appreciate the affordability discussion, but I would tell you that having fuel produced elsewhere with no labor standards, no environmental impacts, is a greater threat to our economy than a simple reduction that's going to pull out of the general fund, which, you know, right now we're at a struggling portion of our budget. We have a lot of priorities. It's not an appropriate use to go and backfill this with the general fund at this time. Again, happy to provide each and every one of you with the results of two statewide elections in which the voters of California decided what they would like. With that, I'm happy to answer any questions from any of you moving forward.

chair members Brian White on

Madam Chair members.

Madam Chair members Carlos Guterres here on

and Clean Fuels Alliance America. In opposition.

Good morning, Madam Chair members Scott Cox

At their request.

Good morning.

In opposition.

Thank you, Madam Chair and members.

In opposition.

and the Bioenergy association of California, in opposition.

Thank you.

Okay, thank you. All right. Well, we will bring it back to the committee now and I'll just make a few comments. So I appreciate the efforts of the senator, but I'm not going to be able to support this bill today. And I wanted to take a moment to explain my position. So I want to start by saying that, like all of us here in the legislature, I do understand the pain that high fuel prices are causing for Californians. Even for the small segment of Californians who don't rely on a personal vehicle to get between their jobs, their home and the rest of their life. It is more expensive to do anything when fuel is more expensive. So that means goods that they use are more expensive in addition to transportation. And I also know that as state legislators, we work to do right by our constituents and to respond to the challenges they're facing. Sometimes those challenges are caused by things that are in the state's control, and sometimes they're not. Trump's disastrous war in Iran is obviously causing a huge amount of pain at the pump, and I hope to see that resolved as soon as possible. But I also know that this is entirely out of control of the state. I appreciate the senator's bill focusing on things that are within the state's control, but I can't support this approach. As the committee analysis notes, although altogether, cap and invest and LCFS add about 38 cents to the price of gas, and I don't want to minimize the real impact of the 38 cents per gallon. But this is only a relatively small part of the overall cost of a gallon of gas that consumers are facing today. And those 38 cents per gallon, it's not going to the oil companies or to petro states. It's helping the very same people who are struggling with those high gas prices. Cap and Invest puts a lot of money directly back into disadvantaged and low income communities. It funds things that include housing, transportation, air, monitoring, Cal Fire. To date There has been 5.87 billion invested into disadvantaged communities and 3.32 billion invested into low income communities. I also want to mention that if we don't deal with the climate crisis, if we don't reduce our carbon emissions and prevent the globe from continuing to warm, we are all going to be living or not living on an uninhabitable planet. Somehow this seems to get lost in the conversation because we seem to forget why we're doing these policies. It's also worth noting that a portion of the bill suspending the state gas tax was already considered, as Mr. Dunn referenced twice being roundly rejected by voters in 2018's Prop 6. I'm proud of California voters for voting 57% in favor of keeping the gas tax and that's because they want to improve our roads. As was mentioned, our constituents understand that the programs and services that the state provides offer very real benefits and they sometimes do come with costs so they don't shy away from that fact and Prop 6 and I don't think we here in the legislature should shy away from it either. So again, I'm not able to support this bill today. I know that getting through the fossil fuel clean energy transition, this mid stage transition is going to be difficult and it will require a lot of weighing of different trade offs. But to me, doing irreparable damage to California's two biggest climate programs, which provide numerous benefits to everyone in the state, residents and workers in order to grant one year of relief from a small portion of the price of gas is not a trade off that I support. We need these programs to help California move forward in the future and not to be stuck relitigating the arguments of the past. So I'll turn to my colleagues if you'd like to make any comments. Senator Menjewar

Yeah, there's a major shift since Prop 6 joined us. We're in a crisis situation here in California that was not here during Prop 6. We just lost Valero and Phillips 66, 20% of our oil production. And I don't see how it's good for the environment that we now get all our oil from India, which the way they don't have the same environmental standards that we do and we're getting refined oil from India. I would remind you that we have now, I think only six, five refineries left that do. California formulated gasoline and almost relying completely on foreign oil. We by the way, when you say, you know, Trump, we called, we saw this coming. We asked the governor to go in special session well before the war in Iran. Well, we have the 20% reduction and quite frankly, it's projected that there might be more further reductions in production here in California. And when you rely on foreign oil, things like what's happened in Iran is exactly what we're facing. So what's being projected at the beginning of the year was $8 a gallon of gas. Everybody thought that was crazy. Well, in some places, especially in Southern California, in your district, I believe last night I was on Spectrum, they had a nine dollar gallon in San Fernando Valley in Chevron. So that's much different than when we had Proposition 6 a few years ago. We're in a crisis situation now. And I virtually, I would virtually say that if today we put that same initiative on the ballot, you wouldn't have the same result because now we're facing $8 a gallon of gas. And it's even projected with the war in Iran that it could go up towards $10 a gallon of gas. So I would ask my colleagues, when they see those seniors on fixed income and when they see those college students living paycheck to paycheck, they can't afford these high gas prices, why we're now not willing to lower the gas prices a dollar to help with that relief.

to get worse even from today.

we, it's going to get a lot

Well, I happen to believe, I happen to believe and we could agree to disagree without being disagreeable. I think it's important that people can put food on the table. I believe it's important that people can eat. I believe it's important that people don't have to decide between a gallon of milk and a gallon of gas. And I think that's why you're seeing actually candidates who are campaigning around the state. People like Antonio Villaragoza and Matt Mahan are also calling for suspension of the gas tax because it's one of the only things that we have in our tool chest that lower the prices today. Now, I agree this bill and I opened with this bill's not the solution to all the problems. This bill is just to help with the crisis that we face today. And to answer your question, again, going back to the initiative, I believe the initiative was out there today, especially with the projections that we're starting to see when your constituents are going to come to you come September, October. And it's $10 a gallon of gas, not only $10 a gallon of gas, but gas shortages where you're going to go to a gas station and there's not going to be gas available. We need to go in emergency session, I believe last January. But we need to start talking about those midterm long term solutions. But this is the only Thing that you could tell your constituents that you did and you fought for to lower gas prices today. We don't have other tools that would have that opportunity to lower the prices today.

That won't happen today.

And again, we could agree to disagree, but today people are struggling to put food on the table. I think people would want to prefer to a small suspension in order to make ends meet and be able to put food on the table and have to decide between a gallon of gas and a gallon of milk. That's my argument. We could agree to disagree without being disagreeable. But I think the economy right now, my district is probably one of the more high influential districts based on salaries or based in my district. Poll came out, 50% of people are worried about living paycheck to paycheck. That's happened in my district. I can only imagine what's happened to every district across the state of California. I would remind you high gas prices fall disproportionately on those hardworking California families, those seniors and in fixed incomes, those young people who are just graduating college. And I'll also remind you high gas prices increase the cost dramatically of products that we have like groceries. And we have. We all agree that we have an affordability crisis in California. I've heard Democrats and Republicans say that in this building and if we don't pass this, we're going the other way in terms of affordability for hard working California families.

Okay.

So, well, first of all, thanks for bringing this, this bill forward. Californians do not need another excuse. They don't need another explanation. They need relief today. They need relief now. We have the highest gas prices in the nation and every single Californian feels it every single day. But we made this decision out of this legislature to create a system that is fragile, that is volatile, so that when we globally feel these price hikes, Californians are hit hardest. And right now families are just being asked to absorb it and they can't. So yes, I support this temporary suspension of the gas tax. I think we can walk in, chew gum, support this relief at the pump for Californians and fully fund infrastructure. But the point is people need relief today. But here's the real question here. Why are Californians always the ones who paying more at the pump? And when Are we going to fix it? That's the deeper question here. This is about a solution that we need now, but we have a longer debate that has to happen. So I have a question for Dr. Micha, and I have about three or four questions for you, but the first is really about our global dependence. Can you walk us through why something like the Strait of Hormuz matters to California and why we're. And where we're actually sourcing our oil and gas from today in California?

Yes. Thank you. So just a level set here, though. California, which used to produce the vast majority of our own oil is now increasingly relying on foreign sources and shipping routes, and meaning that instability halfway across the world can raise prices for us here locally. That's a fair takeaway, that is.

So then, if we're tied to global markets, then how tight our supply really becomes critical. And based on your analysis and current modeling, can you tell me how many days of gasoline supply does California actually have right now?

And so what does that mean?

I think we're going to need to get back to the plot here, which is the bill.

Yeah, can we refocus on that?

Increases in gas prices in most of the statistics indicate to us that about 12 days, 13 days, it's almost an automatic dollar increase per gallon. Almost automatic.

I think that this moment in California's energy crisis is critical. And I think we can walk and chew gum, we can relieve the gas tax at the pump right now and fully fund our infrastructure. But it's going to take political will, it's going to take prioritizing the needs of Californians, and it's going to take supporting this bill. Senator Strickland, thank you.

Yeah, I agree. It's going to take political will. I mean, part of what's frustrating, I think, about this whole situation for so many of us is that, you know, our colleagues, friends in Congress have been unwilling to even do the most modest of assertion of their own sovereignty against this president in the wake of this bill, of this war that he's launched without any congressional authorization. In addition, when we took steps to try to create more transparency in the oil refining process to better understand these gas price challenges, our friends from the other side, Seattle, didn't support those efforts.

I think we need to engender at this moment. You know, I think we do see greater coalescence from both Democrats and Republicans about the need for more environmentally friendly labor friendly in state production. That's part of why we passed legislation last year that was focused on trying to make it easier for there to be production in Kern county and elsewhere. I think we could do more in that direction, especially in those oil fields that are far from frontline communities so as to address some of this disparity that exists. I don't think anybody is particularly happy with this reliance on all this international import. We all know that there's a massive environmental impact associated with just even shipping the oil here and let alone the extraction procedures that they go by, the labor standards, et cetera. So I actually think there's some coalescence here. It's interesting we're talking so much about our dependence on international imports. One thing I do, one thing that Siva and others will say over and over again as you talk to economists, it's not so simple as just resetting the balance. This is a global market and these prices are set, they're set by global supply trends. And everyone is seeing gas prices spike, regardless of all over the world, regardless of whether the extraction is happening close to them in a significant way or not. And that's because of the disruption associated with this war. And unfortunately, the President is not even able to get kind of close allies to assist in freeing up the Straits of Hormuz to make the flow of oil easier through there because of the way that he's approached foreign policy. And I just, I hope that my colleagues will. Will also join in calling out this president and your colleagues and friends in Congress who have just stepped back and really, I mean, from my perspective, abrogated their responsibility in our system of shared governance. So, you know, with that, I share the concern about the extent to which this bill, as conceived, would dramatically impact a large number of infrastructural projects that actually impact our constituents bottom lines as well. One of the reasons why we got so much support for fixing the roads and the bridges and everything else is because we were actually able to show how much an average Californian is spending on car repairs because of how lousy our roads are. And it was so inexcusable, given how much better our weather is, when you saw how much more our folks were spending on car repair versus other parts of the country where there's much tougher weather conditions. And yet our roads were in such bad shape that the potholes and the cracks and the rivets and all the issues that folks face just driving around town, I experienced in my own district puts your car at risk. And we knew we needed to get those issues fixed because one bad drive could. Could be a financial disaster for somebody as well. So, you know, there are a lot of competing concerns here with regards to affordability. I appreciate what you're trying to do, Senator. I don't support the way you frame this bill, but I will say I appreciate the conversation, including the conversation about the straits of foreign movement, not just because I think it's important for people to be focused on some of the international implications and all the implications associated with this war, but I also think that there is, I am sensing, an increased commitment, as reflected in last year's legislation, for us to both continue to double down on clean energy, which of course, would make us less, incredibly less reliant on all these dangerous international trends in a particularly volatile region in the world, the Middle east, but also more a careful but concerted effort to do more oil production in the state. You know, as long as it meets high labor and environmental standards, we know we can do it. There's a way to do it. You know, that effort has been started last year with our, you know, unleash Kern legislation that. I see Senator Grove here, and I know that she was, you know, she'd been talking about this for a long, long time, and I appreciate the advocacy she's brought to this issue with regards to the negative impacts of imports. So with that, I just. I think there's opportunity for us to kind of work, do some work together, you know, and I appreciate the fact that you've repeatedly brought up the fact that we are so reliant on foreign imports.

Let's move this into Your close to answer. Yeah, answer.

But is this bill gonna solve gas shortages?

No, no. But this is, I'm framing where we are. $10 a gallon, gas and shortages. So $10 a gallon gas, we're talking right now, affordability crisis before we face that gas. And everybody here contends and knows high oil and energy and gas prices fall all throughout the economy, including our grocery costs. So we don't have much in the tool shed right now to help people who are facing this and facing this very soon to see our constituents, our constituents are already in pain before this happens. And so this is why I brought this bill forward. This is why it's a short term solution. We could work on some of those long term solutions. But when your seniors come talk to you when it's $10 a gallon of gas and they're on fixed income, you're going to say, well, I had an opportunity to lower a dollar a gallon, but I said no, you're going to go as young people, just graduate college, living paycheck to paycheck, who can't afford these high gas prices. And when you have the opportunity, you're going to have to tell them, I didn't take that opportunity. When you go to those hard working California families living paycheck to paycheck, deciding between a gallon of milk and a gallon of gas, you're going to have to say, I didn't take that opportunity to lower these gas prices by $1.80 a gallon. We have a lot to do in the short and long term. But I'm asking you today to vote for my bill because we are in a crisis situation and we're seeing a bigger crisis situation. We already agreed as Democrats and Republicans that this year affordability is a crisis facing all of us. Well, what we're projecting here and what I'm trying to tell you today is going to get a lot worse. And this is one of the only opportunities we have to lower gas prices today. That's why I asked her. I vote.

Senators Blakespeare. Valderris.

Valaderis, aye. Alan?

Allen. No. Dali. Gonzalez. Hurdado. Menjivar.

Menjevar.

Thank you, Madam Chair.

Thank you.

Now we have our last bill, which is SB 1039 from Senator Grove. It is her birthday. I'm sure this is right where she wants to celebrate with all of us.

Thank you for that, Madam Chair. That was very kind of you.

Thank you, colleagues. Thank you. I'm here today to present SB 1039 which establishes a clear evidence based process for refinery fence line monitoring to ensure that requirements are practical, facility specific and focused on pollutants that refinery can actually emit. So just repeat that again to focus on what the refinery can actually emit. I want to start by saying that I accept the committee amendments to clarify the process for identifying facility specific pollutants. And I appreciate the consultants working with my office and willingness to be able to amend our bill to make it better. California has some of the most stringent air monitoring requirements in the country, if not in the world. Refiners are required to operate both community air monitoring systems and fence line monitoring systems that provide real time publicly accessible data. SB 1039 does not, I repeat, does not roll back any of those requirements. Community monitoring remains in place and transparency to the public remains in place and the public access to data is unchanged. What this bill addresses is a gap in how these requirements are being implemented. In some cases, facilities are required to monitor pollutants that are not even generated by their operations. My witness here today is a small refinery in Bakersfield, California and under the fence line monitoring program, he does not produce a number of those constituents that he's required to monitor for, which increases his cost. SB 1039 creates a formal process for refiners to provide substantial evidence to their local air district to exclude those pollutants from fence line monitoring requirements. The bill also establishes clear criteria for when the pollutant may be excluded, including when it does not release it is not released through the routine or non routine operations and real time monitoring is not technologically feasible or where there are other valid technical jurisdictions. We also want to directly address the concerns the bill undermines air quality protections. It does not. SB 1039 strengthens the system by ensuring monitoring requirements are grounded in actual emissions and supported by evidence. When monitoring is not tied to real emissions, it can implement pose significant costs without improving the public health outcomes. These systems cost millions of dollars up front and hundreds of thousands of dollars every year to operate, depending on the size of the refinery. When requirements go beyond what the facility can actually emit, those unnecessary costs do not disappear. They're absorbed through the business and ultimately passed on through the supply chain. SB 1039 ensures that monitoring remains protective of the public health health well being practical, technological, feasible and tailored to each facility Today with me to testify is the president and CEO of San Joaquin Refinery in my district, Cyrus Mojibe.

Thank you, Madam Chair, Chair, members of the committee. My name is Cyrus Mojibit. I'm the president of San Joaquin Refining Company in Bakersfield, California. SJR is one of the oldest continuing operating facilities in California. Our facility began operating in 1939 and has been family operated since 1968. We produce very little transportation fuel and no gasoline. Instead, we refine heavy Kern county crude oil into specialty petroleum products such as asphalt for road paving, industrial lubricants, transformer oils for electrical infrastructure, agricultural products, and other products that support a wide range of industries. Our scale, processes and environmental footprint are dramatically different. Our refinery processes 100% California produced crude oil, specifically heavy Kern river crude produced in Kern County. Nearly all the crude we process comes from within 25 miles of our refinery. That means the oil is produced locally, transportation exported locally, refined locally, and then distributed to markets across the United States and around the world. This is one of the most localized and efficient petroleum supply chains anywhere in the world. From the time crude oil enters our refinery to the time it leaves as finished products, the process typically takes 45 days. However, regulations such as Senate Bill 674 treat all refineries as if they are large transportation fuel fuel producers. When the legislature originally established refinery monitoring requirements, local air districts were given the authority to tailor those programs to the refineries in their jurisdiction. Our local air district recognized that our refinery does not produce many of the chemical constituents required under the monitoring program and initially reduced our scope accordingly. That decision was later overturned through litigation from environmental groups, forcing the full monitoring framework to apply even where those compounds may not be reasonably present. The result was a dramatic increase in cost. Original estimates of $300,000 ultimately became over 2 million in capital investment, with approximately 200,000 per year in ongoing maintenance costs. While SB674 isn't the issue before the committee today, it also illustrates a larger challenge facing refineries in California. Over the past decade, California refineries have faced a layering of environmental regulations, reporting requirements, and operational mandate.

I will. I was told at four minutes, so I got.

Thank you so much, Madam Chair.

Okay. Thank you very much. I hope you had the time you needed. Yeah. Okay.

Yeah. Okay. Anyone else wishing to express support, please come forward.

So.

Okay, thank you. Anybody else in support? Okay, Opposition witnesses, please come forward. And you each have two minutes. You're welcome to begin when ready, Madam

Go ahead.

Okay, thank you. Anybody else wishing to express opposition, please come forward.

David Quintana, on behalf of the South

We have not finalized our position yet, but we want to let you know

Justice Network and the Asian Pacific Environmental

permission, expressing opposition from the San Francisco

350 Bay Area action.

Bill McGovern with the Coalition for Clean Aeropost.

California and in California environmental voters in opposition.

Michelle Canales with Union of Concerned Scientists and respectful opposition.

May I respond?

So just so you know, my witness here did go to the local air district board and did prove with a beyond a shift shadow of a doubt that they did not produce. I think out of the 21 constituents, correct me if I'm wrong, six are the only ones that they produce. So they shouldn't have to monitor. The air district board did accept that and made a ruling that they would be exempted from those additional exemptions. And then they filed the some of the EJ groups filed a lawsuit against the air district and then they reversed their decision. So I get that there is a process, but the process process isn't working. My witnesses refinery produces after Benicia has closed, which is kind of scary because they're a very small facility in Bakersfield. They're not anything like a major refinery. They're a small facility. They produce the majority now of all the asphalt that we'll be using our roads for the roads infrastructure and repair that like we just heard about how important our roads are. They also produce transfer oil, which you can't have the electricity generating green energy stuff without it and ink oil. So pens, T shirt printing, things like that. So they're not a refiner of gasoline and so they don't produce those emissions or those constituents that are qualified under the air monitoring system. Just a response to your. Thank you for your support too, Madam Chair.

bill undermine reduce protections against fence line monitoring of the communities?

So in this example, this said refineries being held accountable for what they produce and ensuring that they're protecting, in this case, 21 constituents.

But it doesn't sound we're lowering the threshold.

To the opposition, the bill of the committee amendments, which I really appreciated is saying that you can only move forward with this if the local AQMDs approve. Prove this with options that have been used in the past. One of your statements was that it's removing your ability to protect communities. But if we're allowing these said facilities to utilize the options that AQMDs have already provided, how are we not protecting the communities?

I mean, they won't be able. I think we might be reading the committee amendments differently because, yes, it's codified certain guidance that have been used across as examples. That's one. And the second thing is one of the options is if they don't produce that pollutant and you determine it. Determine it. AQMD determines, in fact, they don't produce that pollutant, they're exempt from monitoring that.

So why are we upset if we're just codifying the current guidelines?

Okay, so. Because before, I thought we heard you're attempting to codify, but now it doesn't match. Exactly. Apples for apples.

Thank you.

on this at the local levels, they're

Yeah, but it says that you may exclude a pollutant if there's substantial justification for any of the following. And then it lists A, B and C. Yeah, so.

But that's also limiting as well. It's just these items. And if there are other criteria or you get new information that are necessary that would be excluded.

And I think, you know, Senator Grove, to the chair's point. Point. You know, if in ongoing conversations, if new information is brought about, maybe there's a way to look at how you also include that in determining. But from what I read, it seems like there's avenues to both protect the community, which I'm always going to be up in arms about, but also not put additional regulations on an entity that is not responsible for said pollutants. I think felt like it was a good balance.

Am.

Can I say something?

Well, yeah, I'm a little torn here. I mean, I understand this enjoys a. First of all, I think I understand the goal. I'm also understanding how this could jam up aspects of the work of the airborne. So, look, I can only imagine this is. A lot of these issues are going to be worked out if this bill is able to proceed. My desire here is to lay off, quite frankly, because I'm concerned about getting these issues resolved. But I understand the intent of the bill and I'm certainly open to supporting it if necessary. Necessary if the bill is struggling to get out of committee today. But I think it's going to. I'm going to. I'm going to be asking more aggressively about some of these concerns that have been raised by the opposition. So I understand you've been engaging in good conversation with the chair and enjoys the chair's recommendation. And I see what you're trying to get at, Senator.

In 2012, our total environmental compliance costs were around $400,000.

8.5 million.

Can I ask the opposition witness just your answer to that point about kind of culpability, responsibility? We obviously want you to be empowered to protect the air, but this culpability

We can send you an invoice and show you how he has to register for this. I don't mind doing that at all.

Thank you.

I can provide you the exact pollutants that were.

Okay, question. Yes.

Thank you, Madam Vice Chair. So I actually agree with a lot of what my counterpart has said here that this was a somewhat rational bill. 674 has passed, and they put in a rational way for it to be administered by sending it to each local air district. We then had a rational conversation with our air district and came up with a rational plan to administer it. And then, of course, we're sued. They were sued by fanatics that disagreed with it. And then I don't blame them for this, but they're forced to go back to the old plan. So over the course of four years, we went from a plan that was agreed to that only Made us test for the consensus constituents that we do produce. And now I'm back to producing more than double the amount because eventually they have to give in to these lawsuits that continue to get filed to them, filed at them by environmental groups. And so it worked until they got sued. So I think the point of this bill is to give us the ability to prove that we don't make benzene, toluene, ethyl benzene, xylene, all the chemical constituents that come from gasoline because we don't produce gasoline. So I think it existed and I think our air district acted in good faith to implement that. But then they get sued and I don't blame them for this. They can't fight every single legal battle they get. And it went back and got deferred. So I disagree respectfully with the idea that I can just go to the air district because that's what we did and they agreed and then we got sued back into submission.

Sure, absolutely. So originally our plan, I think it was 2020, we had it first established with the air district was one single point monitor and one path. So there's point monitor and there's paths that certain distances to line to measure for constituents. That scope was about $300,000. And then we were going to test for sulfur dioxide, nitrogen dioxide, naphthalenes, hydrogen sulfide. And then the lawsuit happened and we ended up going back and we ended up with three points and three significantly longer paths, one of them going north to south along Highway 99, which I'm sure every one of you has had the joy of driving the 99. It's 150,000 cars per day, mainly gasoline driven cars that the fence line monitoring points are about 50ft from the highway because we butt right up to Highway 99. So I think there's a lot larger chance of false positives, which I would argue are a greater thing threat to the public to get btex, that's the acronym for benzene toluene ethyl benzene xylene to get false positives on constituents like that then from my facility.

Yes.

Yes. So again, we only produce a little bit of diesel fuel, but we are once Valero closes down, we will be the largest producer of asphalt in the state of California. We are also, as A gentleman from SIPA said, We are 85 to 90% of the state's supplier for transformer oil and 25% of the national supply. Transformer oil is an oil that goes into every transformer pad mounted and pole mounted, that helps the cooling and insulation of transformers. It helps the conductivity and lubricity of electricity through the lines. Should the state reach the electrical mandates that it desires to achieve, you would probably need another half dozen refineries like me producing transformer oil to meet the transformer oil needs for a fully electrified grid.

I'm all done.

Thank you, Madam Chair. And I appreciate your committee and you working with me on this. I appreciate the amendments, who I think make a lot of sense. I think both consultants agreed as well and just respectfully asked for an I vote.

Senators Blakespear.

Blakespeare. Aye. Valaderis. Valaderis, Aye. Allen Dali. Gonzalez Hurtado. Hurtado. Aye. Menjavar. Menjivar. Aye.

Thank you. Thank you, Madam Chair. Thank you, Members.

Senators blakespeare.

Blakespeare.

Valaderis.

Valades, aye. Alan I. Allen. Aye. Dally. Gonzalez hurtado. Aye. Menjavar.

Menar. Aye.

Senators Hurtado. Hurtado, Aye.

So moved.

Senators Blakespear.

Blake, Spear. No. Valaderis.

Valaderis. Aye. Allen Dali. Gonzalez Artado. Menjevar.

Menjivar.

Hurtado.

Hurtado. I.

Yes. Okay. It's three to one and reconsideration is granted. We're now on to item number four, which is SB1008 from Senator Ochoa. Bogue, please call the roll.

Ay.

The motion is due pass to Revenue and Taxation. Senators Blakespear. Dally, Gonzalez. Hurtado. Hurtado.

Madam Chair asks for reconsideration.

Yes.