August 25, 2026 · Rev Taxation · 3,975 words · 21 speakers · 57 segments
Thank you. So, let's see, without a quorum present, we will begin as a subcommittee and we'll establish a quorum once we have sufficient membership of the committee present. First author is present and ready to go. Assembly member, would you like to present your bill?
Sure. Thank you, Mr. Chair and members. Good morning. I want to just thank you all for taking the time today to hear this bill. I'm proud to present AB 817, which will address several pressing issues brought about because of the lineage facility fire in my district over two months ago. That fire broke out on a 500,000 square foot cold storage warehouse in the heart of my district in Boyle Heights. For those who are not familiar with Boyle Heights, it is a neighborhood in East L.A., a neighborhood surrounded by freeways that has been historically underinvested and the victim of one of the largest environmental disasters in California history, the fallout of the Exide battery recycling plant. But that is not what we're here to talk about today. Today is about a devastating fire. A fire lasted eight days and spewed out smoke that choked the surrounding community. A fire that left a warehouse with 88 million pounds of rotting food and attracted untold amounts of flies and rats, even to this day. My community has been in a situation for almost two months now where residents cannot live in their own home. When the heat rises and temperature spikes, residents can't eat, they can't sleep, and they cannot simply even breathe. And while the city and the county have been working hard to keep lineage on a tight cleanup deadline, More can be done, and that's why we are presenting AB 817. AB 817 will tackle two key issues brought about by this fire. First, by preventing any new building permits to companies like Lineage until they can show they have a contingency fund set aside for disasters like this. The fund will exist to ensure that money will be available for food assistance, housing assistance, air quality monitoring, and health care, because if you're going to do business in the community, you'd better be able to support it when you mess it up. Second, it will ensure that any settlement that a resident or business gets from a future litigation because of its incident is tax-free from the state. Should the community wish to pursue legal action, we want to stand by their side. That money is not income, it's compensation for suffering. They have been through enough and shouldn't have to worry about paying taxes on money that's rightfully owed to them. AB 817 will not undo what has already been done, but it will make sure for every community in California that this never happens again without a plan, resources, and accountability. This morning, primary witnesses in support of AB 817 is Willie Armstrong, Senior Director of State Affairs for Los Angeles Mayor Karen Bass, and Shana Anglin with the California Community Foundation, reading a statement on behalf of local nonprofits who have been on the ground since day one, responding to the needs of the community due to the fire, who unfortunately couldn't make it today. Take it away.
Good morning. Well, I'm a little disappointed that the mayor is not able to come here, but I'm sure you'll be able to fill in well. So please proceed. You'll have two minutes.
Good morning, Chair and members. Willie Armstrong, Senior Director of State Affairs, on behalf of Los Angeles Mayor Karen Bass, proud sponsor of AB 817. We want to thank the author for bringing this timely legislation forward, and we will continue to support this endeavor to bring relief to and accountability for the Boyle Heights community. The Lineage Fire was not just a fire. It became a crisis for families in Boyle Heights. Families have dealt with unbearable odors, rotting food, rodents, and flies while trying to work, run their family business, send their children to school, and simply live their lives. No family should have to live that way. As a consequence of the Lineage Fire, Mayor Bass has issued emergency orders, demanded the removal of 85 million pounds of spoiled food, provided emergency housing assistance for 1,300 residents and families, helping them to temporarily relocate and get connected to critically needed resources. We cannot change, as the author indicated, what happened at Boyle Heights, but we can change what happens next. AB 817 sends a message that, number one, companies must be prepared when something goes wrong, and two, communities must be protected. The bill requires large cove facilities to maintain a contingency fund before receiving new building permits. These funds could be used for food assistance, temporary housing, air quality monitoring, health care needs, and vector control, among other things. AB 817 also includes tax relief provisions for qualified residents, property owners, and businesses affected by the Boyle Heights fire. Settlement funds intended for harm, displacement, and disruption should be available for recovery, not taxes income. And for these reasons, on behalf of Los Angeles Mayor Karen Bass, respectfully ask for your aye vote on AB 817. Thank you, Ray.
Good morning. I'm Shana England. I'm vice president of the California Community Foundation. We have anchored and supported community recovery from the Lineage Fire in Boyle Heights. I'm here on behalf of Raquel Roman, the executive director of Proyecto Pastoral, one of our grantees and partners in this recovery. She couldn't be here, so I'm reading remarks that she sent. For nearly 40 years, Proyecto Pastoral has worked alongside families, youth, workers, immigrants, unhoused neighbors, and small businesses in Boyle Heights and the surrounding east side. On June 17th, the eight-day fire ignited a 500,000-square-foot cold storage facility owned by Lineage in our community. For eight days, our community lived with smoke uncertainty and fear, and the prolonged blaze generated significant quantities of toxic smoke and created dangerous air quality conditions for surrounding residential neighborhoods. summer school early childhood centers were disrupted local businesses were impacted and for many residents most this was not an environmental or public health issue It was happening inside their homes and outside their front doors Our neighbors reported burning eyes, throat irritation, coughing, difficulty breathing, nausea, dizziness, and many other symptoms. And while residents were trying to protect their families, community organizations like Proyecto were forced to become emergency responders. We responded because that's what we do. We worked alongside community partners and government agencies. We purchased approximately $10,000 worth of air purifiers and distributed them to community members. Again, we did this because this is what we do in our community, but let me be clear. Community organizations should not have to shoulder the financial and operational burden of an industrial disaster of this magnitude. And what was particularly troubling was the limited support our community received from those responsible. We should not have to organize our own response while the company operating a massive industrial facility in the middle of a residential community was largely absent from that response. The lineage fire is not an isolated incident. Between 2020 and 2024, the U.S. averaged approximately 1,500 warehouse fires every year. Large warehouses and cold storage facilities are increasingly located in and near communities, schools, homes, and small businesses. In fact, there are several other facilities just like this within spinning distance of this facility. When something goes wrong, the consequences don't stay inside the warehouse. Again, the burden of an industrial disaster should not fall on neighboring residents, small businesses, schools, community organizations, or taxpayers. And again, AB 817 can't undo the damage that the linear fire caused. It can't give families back the days they spent worrying about whether it was safe to breathe or let their kids go outside. But we can help ensure that the next community does not face the same uncertainty or face it alone. For these reasons, I thank you for your time and respectfully ask on behalf of the Boyle Heights community for your aye vote on Assembly Bill 817.
Okay, I thank the primary witness. Do we have any other community witnesses who wish to voice their opinion? Please give your name and your organization.
Good morning, Chair and members. Sasha Horwitz, Los Angeles Unified School District, in support.
Thank you.
Good morning, all. Taller, Alex Sanya, and Government Relations for Ultimate Health Services, here in strong support.
Thank you. Thank you. Are there any other members of the public wishing to voice support for this measure? Are there any primary witnesses in opposition? Please approach the table if you'd like and begin your presentation. You'll have two minutes.
Good morning. My name is Judy Little. I'm with the California League of Food Producers, whose members represent a wide variety of food processors, beverage producers. We handle fruit, vegetables, olives, dairy products, snack foods, just to name a few. Thank you for the opportunity to share our thoughts on AB 817 today. First and most importantly, I want to recognize the devastating impact of the June 17th warehouse fire in Assemblymember Gonzalez's district. We have deep empathy for the Boyle Heights and Los Angeles communities who are suffering and truly understand the desire to put in stronger procedures to support these communities if similar incidents occur in the future. We do have concerns with many aspects of AB 817 that ensure tax – oh, we do not have any concerns, excuse me, that ensure tax exemptions for settlement funds and those that received these funds in response to these events. However, we are concerned with the contingency requirements in the bill that create unintended consequences for a wide range of industries that provide Californians with essential products and services. Therefore, we are opposed unless amended today. As written, AB 817 reaches far beyond the dedicated cold storage warehouses. It would affect food producers, distributors, growers, packers, frozen food manufacturers, agricultural cooperatives, retailers, dairy facilities, and even pharmaceutical distribution centers. Requiring a contingency fund as a condition of a permit could discourage investment in new and existing facilities at a time when California's food supply chain already faces capacity challenges. Imposing a contingency fund of up to $20 million could jeopardize investment in new facilities and investment in improving existing facilities. For these reasons, we request AB 817 be narrowed to apply to only new facilities that are 20,000 square feet or more and fully refrigerated, and that the fund amount be tied to the risk posed by the materials stored inside. We also understand and request clarity on how the contingency fund would be calculated, administered, or audited. In lieu of these amendments, we would request a delay in implementation, provide stakeholders time to work with the author, and improve the bill next year. We urge you not to rush the legislation through and allow more time to gain better understanding of what is lacking in current law and what would be most helpful to communities in the future. For these reasons, we are opposed and less amended. Thank you.
Next witness, please identify yourself and proceed.
Good morning, Chair and members. My name is Katie Davey. I'm the Executive Director with the Dairy Institute of California. Dairy Institute of California represents milk processors and dairy product manufacturers with processing plants located in our state. Thank you for the opportunity to share our concerns regarding AB 817. We would like to start by acknowledging the heavy toll of the June 17th warehouse fire on the Boyle Heights community in Los Angeles, and we agree on the need for clear procedures to handle future emergencies effectively. However, the one-size-fits-all approach being presented to you today will hamper the ability of dairy processors in California to upgrade their cold storage facilities, discourage investment in new facilities, and will harm the ability of California to attract new dairy processors to our state. There are 114 active dairy manufacturing plants across California. Many of these manufacturing operations have a cold storage facility. Dairy processors hold products in cold storage immediately after processing to prevent microbial growth preserve product quality and satisfy strict food safety regulations at the state and federal level California is the number one dairy state in the nation employing over 150 people in which many of them are unionized. Our members have manufacturing plants, distribution centers, and cold storage facilities in urban, suburban, industrial, and rural settings. For California's dairy industry to grow and provide good manufacturing jobs for Californians, we need cold storage facilities for the products we manufacture. Imposing a $20 million contingency fund on cold storage facilities threatens our members' operations and directly compromises their ability to invest in growth and expansion of current facilities as well as fund energy efficiency improvements. To lessen these impacts, we would request AB 817 be narrowed to apply only to massive new cold storage facilities of fully refrigerated space located in urban environments. In the event of an emergency, dairy products are easy to dispose of and do not require extensive remediation. We also ask that the fund amount be tied to the risk posed by the materials stored and the scope of the bill be limited with delayed implementation to give us time to address our concerns with the author. Cold storage facilities are essential to delivering nutritious dairy products to Californians and we are committed to working with the author and all stakeholders to find a balanced equitable approach. However, we must remain opposed unless amended today. Thank you.
I thank the witnesses. Are there any members of the public that wish to voice their opposition? Identify yourself and what organization you are standing in for.
Yes, Rachel O'Brien. Thank you, members and chair, author. Rachel O'Brien with the California Grocers Association. We're opposed unless amended.
Good morning, chair and members. Tricia Gerringer with Agricultural Council of California, respectfully reposed unless amended.
Good morning. Taylor Truffaut on behalf of a variety of agricultural associations, opposed unless amended, but we're encouraged by conversations with the author. Thank you.
Good morning. Elizabeth Esquivel at the California Manufacturers and Technology Association, also an opposed unless amended. Thank you.
Good morning, Chair members. Melissa Koslachuk with Western Growers. We align our comments with those of the lead opposition testimony, opposed unless amended. Thank you.
Good morning. Erin Rohit on behalf of the Almond Alliance, also opposed unless amended. Thank you.
Chloe King with Political Solutions on behalf of the Healthcare Distribution Alliance, opposed unless amended. Thank you.
Nicole Quinones on behalf of the Global Cold Chain Alliance, opposed unless amended. Thank you.
Coriana Miller with the California Chamber of Commerce, also respectfully opposed unless amended.
Good morning, Mr. Chair and members. I'm the California Business Properties Association in respectful, opposed, and less amended position. Just want to thank the author and his staff in continuing to work together.
Are there any other witnesses that wish to voice opposition? I thank the witnesses now. Any members of the committee? Mr. Grayson, you're the only other member.
Thank you, Mr. Chair. Glad to be teaming up with you today. This was a terrifying incident, and I want to commend the author for being incredibly responsive to your constituents and to the needs that exist because of this tragedy in your district. There are a lot of lessons to be learned. I don't believe that management of the warehouse that morning woke up and said, today's a good day for a fire. And I say that not trying to be funny. I say that because the same would go for those who designed the zoning plan. Didn't decide to one day wake up and say, hey, we zoned this warehouse to be right in the middle of a residential area. I think it's a great place to have a fire today. And so nobody, in other words, nobody expected it, which is why this is an incredible opportunity for takeaways for some lessons. My commentary here leads to a question. The delay is, I heard a request for delay. Is there going to be a delay in your bill for implementation?
I want to thank Senator for your comments. I know we've talked about this a couple of times in Anoga, considering that this bill just hit us this week and we've only had a couple of days to do that. Everything is on the table in all options in terms of amendments. We have been speaking with folks in opposition and those you heard on the microphone today about what does delay mean. My concern is I don't want to delay my community any further. And so which is why this bill is coming in the first place. And we have spoken to people who said, hey, we didn't even know there were so many storage facilities that existed in a good way. But it is eye-opening to say we might want to check our own systems to make sure that we don't become the next Boyle Heights. And so you could delay it so that we can come to an understanding. But for the purposes of the tax pieces of it, we want to keep this bill intact. But we are continuing those conversations to have those amendments probably the next 24 hours. But we are working toward that goal.
Yeah, the clock is ticking. The clock is ticking. And with 72-hour rule, you're really getting close to the deadline. I have one other question. In your conversations as the bill would move forward, if it gets out, or has there already been consideration as to this fund that your bill addresses or as a requirement or a mandate, are there options? Is there flexibility? Because capital is the lifeblood of doing business. And if you tie up capital, the business doesn't survive. So is there flexibility to where a company could bond or carry a rider on the insurance that they have? Something to where they're not actually tying up their capital, but they can show that there is a responsible plan moving forward if there was a disaster.
I think that's a great suggestion. We're open to having that conversation. I think it's taking that into consideration. I think the reason why we came to that number is lineage itself has only given to community organizations $3 million, and it's still not even cleaned up today. The report just came out that they said they were over 100% clean. They lied. They pushed the goalpost again. For their own cleanup for their own company they paid to million themselves just to clean up their own mess And so the community has not seen any of those dollars which is why we came up with that figure But we are open to adjusting it to the suggestion
you just made. So that makes it easier. But the goal here is that this is only during a state of emergency. And this is an insurance for the community to know that if you're going to be in this area, that they're not going to be devastated should a state of emergency occur like this one. Right. So I would suggest then that if you're going to open up the flexibility of either a bond or a rider on a current insurance policy, that it stipulates that it's only for community response rather than them using it up for their own purpose.
Correct. That's fair. Okay. Yeah. Okay. Thank you.
That's a good point.
I think the senator, does the vice chair have any comments? You recognized?
Thank you. Thank you, chair. To the author, you do have quite a bit of opposition coming from the agricultural sector. And, you know, California was built on the economy of agriculture, particularly the district that I represent. Can you talk a little bit about what work you've done with the opposition to answer their questions and to get their voice in this proposition?
We're continuing to have conversations and amendments that could be coming out very soon. The short of it to answer that question.
Are there certain groups that you're working with, certain constituent bases? Because it's quite a long list of opposition.
I'm aware of the long list. That's also not from my area. And they're also not suffering the consequences of a disastrous fire that happened here. And so many of my voices in my community don't have the affordability to travel up here, which is why we do have two individuals here who are able to testify. But I will say that with that long list, we are having those conversations with them, but there's a longer list of people who are suffering as a result of this fire.
Okay. Okay. So would you categorize this bill more as a district bill?
It certainly does raise the red flag in other parts of the state where these cold storages do exist, that if it happens in their neighborhood across the street from a park or a school, it could present a problem.
Okay. All right. Thank you. Fair question.
I think the vice chair, and I thank Submember Gonzalez for this effort. it's impressive how willing you are to work with the opposition to find the right solution and of course the fire harmed residents and businesses and it was no fault of their own that this happened and only if it is continuing it's ongoing I don't believe they know when this is going to end so it's kind of a nightmare scenario for people who live in the area and I want to acknowledge the opposition cold storage facilities are absolutely critical for our food distribution and safety. While the concerns are outside of the scope of this committee's jurisdiction, I hope this bill can be crafted to maintain access while responding to the disaster in your district. And I know that you're really working to protect the people that live there, but also protect people that live in the vicinity of these kinds of facilities, closed storage facilities. So I'm happy to support your bill, and I encourage you to continue to work with oppositions to create the best bill that's possible. Would you like to close?
No, just thank you so much for the conversation. Thank you, members, for the dialogue and the suggestions. and we will continue to work with opposition in the next couple of hours that we have and hope to get to a good place that's meant not just for Boyle Heights but for the rest of the state. Thank you. I respectfully ask for your aye vote.
Okay, is there a motion on the bill? So moved by... Oh, okay, yes. We need to establish a quorum. Thank you. Would the secretary call a quorum? Senators McNerney.
Aye.
McNerney, present. Alvarado Gill?
Here.
Alvarado Gill, present. Ashby, Becker, Grayson?
Here.
Grayson, present. We have a quorum. And now we are ready to move on to a vote. Motion moved. And the motion has been moved. Would the secretary call the roll? Motion is due passed to the Committee on Appropriation. Senators McNerney?
Aye.
McNerney, aye. Alvarado Gill?
No.
Alvarado Gill, no. Ashby, Becker, Grayson?
Aye.
Grayson, aye. 3-0. The vote is 2-1. The bill is on call. And the committee will go into recess until we get additional members. Thank you for your witnesses. Would the secretary call the roll? This is file item number 1, AB 817 by Assemblymember Gonzalez. Motion is due passed to the Committee on Appropriations. Current vote is 2 to 1. Chair voting aye. Vice-chair voting no. Senators Ashby, Becker.
Aye.
Becker, aye. 3 to 1. The vote is 3 to 1. The bill is out. Yeah. Thank you.