Transcript Highlights:

• And her connection costs.
• costs to financially unstable operators in exactly these types of circumstances.
• Thank you. ...as a cost driver.
• So if, under current law, under AB 1167, if an operator wants to buy a well from another operator, then
• These rules are extraordinarily cost-effective and do not drive the increased gas cost that this bill

Committee: House Natural Resources

Transcript Highlights:

• operations.
• Our utility operates on a fundamental principle reflected in House Bill 2515: those who create costs
• bear those costs.
• Our utility operates on a fundamental principle reflected in House Bill 2515: those who create costs
• bear those costs.

Bills: HB2515 , HB2343 , HB2301 , HB2272 , HB2367

Committee: House Environment & Energy

Keywords: energy facilities, large energy use, regulation, state oversight, infrastructure, water quality, game farms, public health, environmental protection, regulatory oversight, extended producer responsibility, paint waste management, environmental regulations, sustainability, recycling, ski areas, winter sports, terminology update, recreation, regulatory changes

Transcript Highlights:

• Again, operating costs, total revenue, roughly break-even, maybe slightly positive.
• Labor is the largest cost in terms of annual operating.
• As you know, a coal plant is very expensive in terms of the cost to operate.
• A coal plant is very expensive in terms of the cost to operate it. It's a very manual process.
• The bill prohibits utilities from allocating costs associated with data center operations, including

Summary: The committee met at the Coteau Freedom Mine in Mercer County, approved the June 2 minutes, and heard an overview of the mine from Coteau Properties president Andrew Hawbaker. He described the Freedom Mine’s production history, customer mix, safety record, reclamation practices, workforce, community involvement, and economic impact. Members asked about how long land stays in production before reclamation, how quickly it returns to agriculture, labor shortages, groundwater impacts, and which skilled trades are hardest to fill. Hawbaker said the mine typically disturbs land for three to five years, reclamation returns much of the land to agricultural use, and the biggest hiring challenges are electricians, welders, mechanics, operators, engineers, and accountants. The committee then heard from Public Service Commission Chairman Randy Christman on coal mining reclamation. He reviewed the history of North Dakota and federal reclamation laws, the PSC’s permitting and inspection authority, bonding requirements, contemporaneous reclamation standards, and how the state handles topsoil, subsoil, drainage, and revegetation. He emphasized that North Dakota’s program is well regarded, with frequent inspections and no corrective-action issues in recent federal reviews. Christman also discussed problems caused by federal coal ownership that can delay mine plans, and he answered questions about reclamation timing, wildlife easements, wind and pipeline reclamation, and whether similar bonding concepts could apply to data centers. In the afternoon, the committee received an update from Lignite Energy Council President and CEO Jonathan Fortner on the lignite industry. He highlighted the industry’s long-term role in providing reliable electricity, jobs, and tax revenue, along with North Dakota’s low electricity rates and strong grid reliability. Fortner discussed severance and conversion tax revenues, federal regulatory changes, litigation over EPA rules, carbon capture, critical minerals, and the potential for large-load customers such as data centers to support new coal generation. He said the industry sees a window of opportunity for growth and expressed support for new large-load development, while noting that diversified energy companies are also pursuing natural gas and other resources. No formal votes or legislative actions were taken beyond approving the minutes and adjourning for the tour.

Transcript Highlights:

• Participation in Operation Midnight Hammer demonstrated the professionalism... ...and Operation Midnight
• They have an operating fund that sustains all of their operating approach, so part of that.
• They have an operating fund that sustains all of their operating approach, so part of that.
• The department operates six CSCs.
• Increased costs associated with our cold- and warm-water hatchery operations amount to about $1.1 million

Committee: House Budget

Summary: The committee first heard the Missouri National Guard’s FY 2027 budget request in House Bill 2008. Brigadier General Bob Payne outlined the Guard’s dual state and federal mission, recent deployments and state activations, counter-drug work, and the need to maintain readiness and aging armory infrastructure. Members questioned several items, including a proposed internal auditor position required by statute, a World Cup-related NDI, the use of general revenue versus other funds, and a federal match for base operations support at Rosecrans Airport. The presentation then shifted into executive session, where the committee reviewed a House committee substitute and several amendments. One amendment to fund the Missouri State Fair’s Great American State Fair participation with ag and tourism funds was rejected, while an amendment reducing $50,000 in House and Senate legal contingency funding was adopted. Another amendment directing budget information to all committee members rather than only chairs was rejected. The committee then adopted the substitute and voted House Bill 2014 do pass by a 24-0-1 vote. The committee next took up the Department of Corrections FY 2027 budget in House Bill 2009. DOC described a new CERT stipend increase, a reduction in the Office of Director’s Staff, and several core items including professional standards, federal funds, community treatment programming, education grants, population growth pool, restitution payments, human services staff, telecommunications, general services, fuel and utilities, food purchases, food service, staff training, employee health and safety, overtime, adult institution staff, institution E&E, wage and discharge, and individual institutions. Members asked about the CERT stipend, PREA allegations, education funding, restitution payments, the population growth pool, the working capital revolving fund, food service costs, overtime, retention, warden turnover, the prison nursery, and the use of inmate canteen funds. DOC said CERT members are full-time employees who volunteer for additional duty, that staffing has improved but remains a challenge, that the food service increase reflects the end of inventory credits and inflation, and that the department generally spends non-GR funds first when possible. Discussion also turned to whether DOC facilities could be repurposed for pretrial or mental health populations; DOC said it is legally limited to post-sentence inmates and that staffing and labor-market constraints make reopening closed facilities difficult.

Transcript Highlights:

• So in some ways, that's at no cost to the state in terms of operations.
• But again, 75, three quarters of our operating costs But again, 75, three quarters of our operating costs
• We operate on an open system.
• We are trying to cut costs. I already talked about boosting ridership. We're trying to cut costs.
• funding, and the cost of services, and your... ...due to the gap in fare revenue, operations funding

Transcript Highlights:

• the cost to maintain and operate these systems.
• , operations costs, and attorney general fees. $5 million.
• There are significant one-time requests to help meet the operational costs.
• Of course, we support operational costs. We know you need to operate.
• So we're thinking of them for this operational cost for sure. Okay. Thank you.

Transcript Highlights:

• And then our cost-share ag cost-share program, we've demonstrated success there over the years.
• When it comes to your projections on operation and maintenance costs, what do you all do internally to
• We'll also have operational costs to try and reestablish those timber stands in those areas as well.
• Same question: when you project the costs associated with maintenance and operational expenditures, what
• for operating and maintaining each year, and we use that to build out a budget monitor, cost and cost

Committee: Senate Appropriations Committee on Agriculture, Environment, and General Government

Summary: The Appropriations Committee on Agriculture, Environment, and General Government heard budget presentations from all five water management districts for FY 2026-2027: Northwest Florida, Suwannee River, St. Johns River, Southwest Florida, and South Florida. Each district described its preliminary budget, major funding sources, staffing levels, and how most of its spending is tied to the four core missions of water supply, water quality, natural systems, and flood protection. Several directors noted budget reductions from the prior year largely because major projects were completed or because grant/appropriation funding is not yet fully reflected in preliminary budgets. Committee members repeatedly asked how districts project operations and maintenance costs, how projects are selected, and what share of staff and spending is devoted to core missions versus administration or regulatory work. Northwest Florida Water Management District said its preliminary budget is $93.4 million, down about 15%, with 97% of spending tied to core responsibilities and a request for additional regulatory services funding. Suwannee River Water Management District presented a $70.4 million budget, emphasized its rural/agricultural character and spring protection work, and highlighted the Water First North Florida reclaimed-water recharge project; members also discussed its need for an additional FTE to handle consumptive use permit reviews tied to a new lower Santa Fe rule. St. Johns River Water Management District presented a $181 million budget, highlighted major water supply, water quality, flood protection, and land management projects such as Taylor Creek Reservoir, Water First North Florida, Black Creek, Crane Creek, and Lake Jessup restoration, and said about 93% of its budget supports core missions. Southwest Florida Water Management District presented a $227.6 million budget, with major spending on alternative water supply, water control structure repairs, watershed projects, and land management; officials said 93.4% of the budget supports core missions and discussed rising construction costs for aging infrastructure. South Florida Water Management District presented the largest budget at $1.05 billion, focused on Everglades restoration, flood control, water supply, and ecosystem recovery; the director described major reservoirs and treatment projects, the EAA Reservoir, and ongoing efforts to improve water quality and restore flows to the Everglades and Florida Bay. The committee took no formal votes on the district budgets and adjourned after the presentations and questions.

Transcript Highlights:

• Other operating costs like rent, lease, fuel, utilities, IT, and legal services also grow.
• Other operating costs like rent, lease, fuel, utilities, IT, and legal services also grow.
• Other operating costs like rent, lease, fuel, utilities, IT, and legal services also grow.
• Other operating costs like rent, lease, fuel, utilities, IT, and legal services also grow.
• Other operating costs like rent, lease, fuel, utilities, IT, and legal services also grow.

Bills: HF2783

Committee: House State Government Finance and Policy

Transcript Highlights:

• Cost efficiency of the service provided the proportion of operating expenses covered by passenger fares
• and delivered trips outside regular hours of operations.
• We mentioned a little bit about the cost of operators, hiring operators and the shortages.
• the man response operations.
• The staff is so small the costs can be prohibitive.

Transcript Highlights:

• After five or six reactors have been deployed, the cost should come down the cost curve as there are
• as a proxy for anthofa kind capital costs.
• From an operational standpoint, From an operational standpoint, I think there's a couple points I'd like
• to operate.
• structural first-of-a-kind cost underestimation, not cost overrun, which makes future AP 1000s much more

Committee: Joint Advanced Nuclear Energy Committee

Transcript Highlights:

• Chair, no specific instructions on daily operations of the agency, only to operate with integrity and
• I understand that when lumber costs go up, that increases the cost, but that increases the cost across
• It was costing our members $200,000 just in upfront cost to fill out an application, and therefore we
• It was costing our members 200,000, just an upfront cost to fill out an application.
• Ruby's not a political operative.

Summary: The Senate Committee on Director Nominations met to consider Ruby Dylan Williams for Director of the Arizona Department of Housing. Williams described her long career at the department, her work on operational improvements, housing development, manufactured housing, and efforts to expand supply, preserve existing housing, and improve transparency through data and technology. She also said she would work with the legislature, local governments, tribal nations, nonprofits, and private partners, and emphasized the department’s role in addressing housing affordability and homelessness across the housing continuum. Members questioned her about the department’s response to Auditor General findings, including fraud prevention, payment verification, site inspections, and oversight of grantees. Williams said the department had rewritten policies, retrained staff, added stronger controls, and implemented verbal verification steps for wire transfers after a fraud incident. Senators also pressed her on budget priorities, possible cuts, and her view of homelessness policy, with some members characterizing her approach as closer to shelter or transitional housing before permanent placement. Williams said interventions should be individualized and that the department works with local jurisdictions and service providers to match people with appropriate support. Public testimony was overwhelmingly supportive. Developers, housing industry representatives, and nonprofit partners praised Williams’ private-sector housing finance experience, her knowledge of LIHTC and the QAP process, and her leadership in making the agency more efficient and business-friendly. After debate, the committee voted 3-2 to recommend her confirmation to the full Senate. Two members voted no, citing concerns about her answers on fraud oversight, cost controls, and homelessness policy, while the majority supported advancing her nomination.

Transcript Highlights:

• Next on cost share.
• It does not necessarily represent the full cost of operating the system.
• And I will provide some statistics on... ...represent the full cost of operating the system, and I will
• that cost per year to continue to operate that system.
• Project costs going forward: construction costs total about $30 million.

Committee: Joint Water Topics Overview Committee

Summary: The Water Topics Overview Committee met to review several interim studies and receive updates from the Department of Water Resources. The committee approved the March 26, 2026 minutes, observed a moment of silence for the late Representative Conmy, and welcomed Representative Hansen to the committee. Staff then reported that the watershed management study and the stormwater/wastewater study had both satisfied the presentation requirements in their study directives, with no further required testimony unless members wanted additional information. The department’s main presentation focused on major water projects and agency operations. Reese Haas and staff updated members on the NAWS project, the Southwest Pipeline Project, Devils Lake outlet operations, low-head dam safety work, floodplain management repository implementation, data center water use, and the 2027 Water Development Plan. Members asked detailed questions about NAWS funding sources, remaining project costs, capacity concerns for All Seasons and other users, and whether current construction is being designed for future demand. The department said NAWS remains on track for substantial completion by October, that remaining NAWS funding will come from a mix of federal, state, and local sources, and that current construction is designed for ultimate capacity while some future components will be adjusted for increased demand. A large portion of the meeting was devoted to the department’s cash management, Resources Trust Fund revenues, carryover balances, and the State Water Commission’s cost-share program. The department reported $340.6 million in carryover remaining, explained that much of it is already obligated to long-term projects, and noted that oil price forecasts and stripper-well exemptions will affect future revenues. Members raised concerns about large carryovers, affordability for local sponsors, and whether the state should continue obligating money multiple bienniums ahead. The department said it is working with the commission on a revised prioritization framework, including high/moderate/low project categories and a two-tier pre-construction/construction approach, to better manage obligations and affordability. The committee also reviewed Deloitte’s finalized studies on regional governance/finance and cost-share policy. Deloitte presented options for Southwest, NAWS, and Red River governance, with stakeholders generally favoring keeping NAWS largely as is, using the current Southwest model with improvements, and pursuing a more structured governance option for Red River. On cost share, the department said Deloitte’s recommended package would cover projected needs through the 2030s, but would require policy changes such as lower percentages for some project types, a 25% replacement-project rate with a cap, and possible bonding or delayed reimbursement strategies. No votes were taken on these policy questions, and the chair indicated the committee would continue the discussion at future basin meetings and the September Water Topics meeting.

Transcript Highlights:

• and staff in order to pay for basic operating costs.
• and staff in order to pay for basic operating costs.
• and staff in order to pay for basic operating costs.
• and staff in order to pay for basic operating costs.
• and staff in order to pay for basic operating costs.

Bills: SB5998

Committee: Senate Ways & Means

Keywords: fiscal appropriations, budget, state funding, financial management, operating expenses

Transcript Highlights:

• This table is another way of looking at the cost of operating prisons. Page 7.
• This table is another way of looking at the cost of operating prisons.
• In this case, we're looking at a breakdown of the current average cost per person of operating prisons
• These costs are not driven by operations.
• These costs are not driven by operations.

Summary: The Assembly Budget Subcommittee on Accountability and Oversight held a hearing on the California Department of Corrections and Rehabilitation (CDCR) budget, with a focus on prison population trends, spending, facility closures, and efforts to find savings. The Legislative Analyst’s Office (LAO) presented data showing the prison and parole populations have fallen sharply over the past 20 years while CDCR spending has remained high, driven largely by security, health care, litigation-related requirements, and aging infrastructure. The LAO also said the state is likely to have several thousand empty beds by 2030 and recommended closing another prison, identifying the Correctional Training Facility in Soledad as the strongest candidate, while also urging more transparency around facility deactivations and the Boston Consulting Group (BCG) efficiency contract. CDCR Secretary Jeff McCumber said the department faces structural budget pressures from retirement payouts, workers’ compensation, overtime, medical transport, aging facilities, and violence in prisons, but emphasized declining recidivism, expanding reentry beds, and the need for more single-celling and rehabilitation. Department of Finance representative Anthony Franzoa said the administration is not proposing another prison closure at this time, opposed new reporting requirements on deactivations, and said the BCG contract is intended to produce long-term savings even if near-term estimates are being revised downward. Amber Rose Howard of California United for Responsible Budget argued the state should close more prisons, redirect funds to community services, and stop spending on excess prison capacity. Members questioned why CDCR still relies on vacancy savings, why rehabilitation is only a small share of the budget, and whether the department should be more transparent about capacity reductions and legal liabilities. Several members criticized the $20 million BCG contract and the lack of competitive bidding, while others pressed CDCR on staffing levels, single-celling, suicide prevention, and health care costs for older incarcerated people. The hearing did not take a formal vote, but it ended with clear committee concern about CDCR’s budget transparency, the pace of prison closures, and the need to align spending more closely with the declining prison population and the department’s stated rehabilitation mission.

Transcript Highlights:

• and reduced transportation costs.
• It doesn't cost them as much, or is it they're just accepting that more energy is costing them to drill
• industry that's already operating at a competitive disadvantage, and those costs don't operate in a vacuum
• costs of our refineries.
• So that communities know what the impact is from these operations and what the cost and timeline for

Committee: Senate Environmental Quality

Summary: The Senate Environmental Quality Committee held an informational hearing on the environmental impacts and planning considerations associated with refinery closures. In opening remarks, the chair framed refinery shutdowns as a complex part of California’s decarbonization transition and said the committee would focus on environmental and land-use issues, while Vice Chair Gunda argued closures reflect years of policy-driven disinvestment and warned that supply disruptions and higher prices could harm working families. State agency witnesses from the Energy Commission, CARB, and the Water Boards described the state as being in a “mid-transition,” with declining gasoline demand, growing zero-emission vehicle adoption, and increasing conversion of some refinery assets to renewable fuels, but also with abrupt capacity losses that can force greater reliance on imports and storage. They emphasized the need for proactive planning, transparency, and coordination across agencies, and noted that refinery closures can stress pipelines, terminals, and other linked infrastructure, with potential liabilities falling to the state if those assets are not financially supported. The Water Boards explained their cleanup authorities and tools for refinery decommissioning, including investigation, monitoring, remediation, and enforcement under the Water Code, and said site-specific cleanup plans depend on contamination, groundwater conditions, and future land use. They noted that decommissioning can reveal previously inaccessible areas and require additional sampling or wells, and that cleanup costs can range from tens to hundreds of millions of dollars. Committee members pressed the witnesses on whether the state has enough information to plan for land transitions, whether current tools are adequate, and whether more standardized procedures or financial assurances are needed. The witnesses generally said existing tools are useful but that more transparency and better data sharing would help communities and policymakers understand liabilities and long-term redevelopment opportunities. Members also questioned the relationship between California policy, refinery closures, imports, and global emissions. CARB said its programs apply to transportation fuel suppliers whether fuel is refined in-state or imported, and that its climate and air-quality rules are designed to reduce emissions and avoid leakage. Some senators argued that California’s policies have accelerated closures and that demand has not fallen fast enough to offset lost refining capacity, while agency witnesses responded that closures are also driven by global market forces, aging infrastructure, crude quality, and changing fuel demand. The committee then heard from outside experts, including a Notre Dame professor who said closure costs are often underestimated and that stronger financial assurance requirements can shift company behavior, a Stanford/SLAC researcher who outlined five drivers of refinery closures, and an environmental attorney who discussed community impacts and lessons from the Phillips 66 Los Angeles refinery closure. No votes or formal actions were taken; the hearing was informational and focused on testimony and questions.

Transcript Highlights:

• is completed or operating.
• , or operating.
• 400% cost overrun.
• The costs will be too high.
• So the major cost here is the front end cost of money.

Summary: The committee heard public testimony on Senate Bill 5821, which would direct the Department of Commerce, if funded by gifts or grants, to develop a nuclear power strategic framework and integrate it into the state energy strategy. Supporters, including Sen. Braun, Energy Northwest, public power representatives, and several pro-nuclear advocates, said Washington needs to keep advanced nuclear on the table to address rising electricity demand, reliability concerns, and clean energy goals. Opponents, including the Sierra Club, Columbia Riverkeeper, tribal representatives, and other environmental advocates, argued the bill gives nuclear special treatment, lacks sufficient guardrails on waste, safety, cost, and public process, and was rushed without adequate tribal consultation. Several tribal testifiers said the bill should require early, meaningful government-to-government consultation and stronger protections for treaty rights and cultural resources. The committee then held a work session on a Washington State Institute for Public Policy report reviewing state policies supporting small modular reactors. Staff and researchers explained that the report surveyed 79 policies in 35 states and found most states are still in preliminary planning stages, with policies focused on feasibility studies, siting, workforce development, permitting, financial support, and market integration. Members asked about water use, waste, footprint, and whether the report covered fusion; the researchers said it was limited to fission and that water needs vary by reactor design. Some senators noted the need to consider lifecycle impacts and compare nuclear with other energy technologies. The committee also heard Senate Bill 6010, which would change FSEC tribal consultation procedures by exempting most government-to-government consultations from the Open Public Meetings Act when there is no deliberation or commitments, requiring all FSEC members to participate in consultation, and giving tribes a chance to review and correct the consultation summary before it goes to the governor. Tribal witnesses and environmental groups supported the bill as a way to improve confidentiality and meaningful consultation, while the Association of Washington Business opposed it, saying it could add delays and suggesting timelines. Finally, the committee heard Senate Bill 6004, which would update contracting statutes so public entities can contract for renewable or non-emitting generation capability under CETA definitions; utilities supported the update as a modernization, while consumer and environmental opponents warned it could shift financial risk to ratepayers, especially for nuclear projects. No votes were taken in the transcript.

Transcript Highlights:

• of operating a farm with the loan limits.
• The administrative and operating payments provided by the U.S.
• And make those decisions about their operation.
• The direct operating we increased from 400,000 to 750,000.
• They are dealing with high input costs.

Committee: Senate Agriculture, Nutrition, and Forestry Committee

Keywords: farm bill, rural economy, crop insurance, access to credit, young farmers, USDA funding freeze, agricultural policy, risk management

Summary: The meeting of the agricultural committee focused on significant concerns regarding the current state of America's rural economy, highlighting the need for a strong five-year farm bill to address the challenges faced by farmers, particularly young and beginning farmers. Key testimony was given by multiple stakeholders including agricultural leaders and young farmers, emphasizing issues related to crop insurance, access to credit, and the adverse impact of recent USDA funding freezes. Various members discussed the necessity of risk management tools that farmers rely on to secure financing, which is crucial for sustaining agricultural operations and supporting rural communities. The importance of timely legislative action was underscored, as many farmers reported struggles in the current economic climate, raising urgency for reforms within the Farm Bill framework.

Transcript Highlights:

• What is the total operational cost of the program right now?
• So we will be operational. We will...
• But we know we have these contracted operating costs in 2026-27 that have to be paid.
• This relates to investment operating cost of $38.1 million, which is largely driven by ongoing implementation
• incurred by the Cannabis Tax Fund: $21 million in personnel and operating costs, and $31 million in

Summary: The Assembly Budget Subcommittee 5 on State Administration held a May Revise hearing focused on state administration proposals, with the chair noting no actions would be taken and all items would remain open. The committee heard presentations on a range of budget proposals, including technical adjustments for the Governor’s Office of Service and Community Engagement and the California Workforce Development Board, security and election-related funding for the Secretary of State, modernization and loan-backfill requests for the Department of Consumer Affairs, and multiple Employment Development Department updates covering EDD Next, UI and DI/PFL benefit estimates, workforce funding, and an EMT training reappropriation. Several items drew discussion from the LAO and committee members. The LAO generally supported technical or modernization items such as PERB’s implementation requests, GoServe’s College Corps adjustment, the Secretary of State’s security and HAVA grant items, and the Board of Pharmacy modernization proposal, but raised concerns about the Bureau for Private Postsecondary Education’s proposed $10 million General Fund backfill and interest-free loan language. For EDD, the LAO flagged the size of the DI/PFL benefit adjustment and the unusual structure of the document management system proposal within EDD Next, while EDD said the changes reflected higher participation and benefit levels after SB 951 and ongoing modernization needs. The Department of Industrial Relations drew the most extensive questioning. It proposed funding for legal unit reclassifications, EAMS and Cal/OSHA data modernization, a new Cal/OSHA emerging technologies unit, a COYA reappropriation, and trailer bill changes requiring electronic payment of employer assessments and adjusting the Workers’ Compensation Appeals Board timeline. Members pressed DIR on high vacancy rates, long wage theft and workers’ compensation backlogs, low collection rates for fines, and the need for clearer workload and outcome measures. DIR said the requests were intended to improve efficiency, support audits and corrective action plans, and better address emerging workplace risks, while the LAO said the workload drivers behind delays remain unclear. The hearing also included support for CalHR’s employee assistance program consolidation and CDT’s proposal to expand “Poppy,” a statewide generative AI assistant for state employees.

Transcript Highlights:

• Plymouth, they cost $29.91 cents, and Metro Transit has a cost of $21 only.
• </c> at significantly less cost. at significantly less cost.
• </c> reports of the cost-effectiveness. reports of the cost-effectiveness.
• </c> disguised as a cost-saving measure. disguised as a cost-saving measure.
• </c> provided more cost-effectively? provided more cost-effectively?

Transcript Highlights:

• The Governor's budget maintains the 2025 Budget Act Agreement to support Cal Fire operation costs with
• The Governor's budget maintains the 2025 Budget Act Agreement to support Cal Fire operation costs with
• Another piece is they are clarifying how state operations costs are treated under this framework.
• But on tier one, on state operations, it includes a wide range of departments far beyond the cost of.
• It's a state operations cost required by legislation, and it fits and aligns with GGRF enabling statute

Summary: The subcommittee heard testimony on the governor’s proposed sustainable aviation fuel (SAF) tax credit, which would provide a $1 to $2 per gallon credit against the diesel excise tax for SAF sold for use in California from 2026 to 2036. The Department of Finance and CARB argued the credit would help decarbonize aviation, support refinery transitions, and keep fuel production and jobs in California. The Legislative Analyst’s Office recommended rejecting the proposal, saying it is a relatively expensive way to reduce greenhouse gases, could have uncertain or limited climate benefits, and would reduce diesel excise tax revenue that supports highways, local streets and roads, and other transportation programs. A major point of debate was whether the credit would simply shift limited feedstocks from renewable diesel to SAF rather than create new low-carbon fuel supply. Professor Aaron Smith and the LAO said that because feedstocks such as used cooking oil, tallow, and vegetable oils are limited and already used in other fuel markets, the policy could increase SAF at the expense of renewable diesel, with possible increases in fuel prices and little net emissions benefit. Administration and CARB staff disputed that outcome, saying additional waste-based feedstocks are available and that the policy would not meaningfully raise gasoline or diesel prices. Senators focused on feedstock availability, impacts on road funding, fairness to consumers, and whether the proposal was really aimed at preserving specific refineries such as Phillips 66. Public comment was sharply divided. Labor representatives, refinery workers, airlines, Boeing, airports, and some local residents supported the proposal, emphasizing jobs, refinery investment, and aviation’s need for a liquid-fuel decarbonization pathway. Environmental and transportation groups, including the Center for Biological Diversity, World Resources Institute, Earthjustice, California Environmental Voters, counties, cities, and trucking and asphalt associations, opposed it, citing weak net climate benefits, possible fuel-price impacts, and losses to transportation funding. No vote was taken; the chair announced all items would be held open for a future hearing.