Senate Standing Committee on Governance and Finance

The Senate governance and Finance Committee will come to order. Welcome to everybody. This gray, dreary morning. Let me just start off by saying we are not going to be having any video testimony this year that new rules and the Plexi glass has been removed. And so, we're going to set up a process here in this Committee where all the witnesses will testify from the mic in an excess of caution. We want to make sure we're keeping everybody as healthy as possible during this wintertime.

So, we are going to allow each side to have two witnesses, 3 minutes apiece. And as I said, they'll testify from the main mic. We're not going to utilize the desk at this time. Maybe later, once the flu season has passed. So, what we're going to do is start off. We have two items on our agenda today. We're going to start off with file item number one, SB 546, Senator Alvarado Gill, who is present. If you want to come forward, please do so. Welcome.

And we do have a quorum, so if we could take the role, please.

Senators. Caballero, here. Caballero. Present. Seyarto. Seyarto, present. Blakespear. Blakespear, present. Dahle? Durazo? Durazo, present. Glazer. Glazer, present. Skinner. Wiener. You have a quorum.

We do have a quorum. Welcome, Senator.

Great.

Thank you. I just realized my first time in front of this Committee, so this is an honor. Thank you.

You may proceed.

Thank you. Thank you. So, good morning, Madam Chair and Members of the Senate governance and Finance Committee. I am in front of you today to present Senate Bill 456 which is a sales and use tax law exemption. I want to start out by saying that this is a district Bill and this is a district Bill that I had brought forward very early in my green phase as a Senator representing Senate district four.

And I was very excited to be like, you get a tax exemption, and you get a tax exemption. But the reality is fiscal responsibility makes us focus on the bills that we put forward. And I want to thank the chair to helping me do that in this last year. So this is a Bill that would enact a state sales tax and use exemption for public agencies to purchase dedicated snow removal vehicles.

And in the vehicle code, in the law, there is a very specific list of what those snow removal vehicles are. This Bill was derived directly from my district in response to the debilitating winter storms that we experienced last year. This was the devastating floods, avalanches, roof collapses, many that went on for months and months in the Sierra Nevadas, in the Central Valley. Thankfully, we had no loss of life with the increase of extreme weather events.

Winters such as last year's have shown how vital safe snow removal services are to the local level. You may have remembered on the news we had residents themselves attempting to remove snow with their own equipment. We did have some devastating injuries. Fortunately, no fatalities. This is a result. This Bill is a result of what we saw in this last year. The purpose is really to alleviate the burden put on local public agencies that invest in proper snow removal vehicles.

As a state sales tax exemption, this Bill will not affect any local or county tax revenues. This is simply a Bill that would add an incentive for public agencies to do the right thing to ensure that they have the equipment present. Now, you may be thinking, well, isn't that what Caltrans does?

Right? So let me talk to you a little bit about that. Well, last year, more than 6000 of my constituents customers were without power in the Sierra Nevada. Many of these residents became stranded without necessary resources or electricity. Those of us who live on wells, that means we have no access to water. Those of us who have solar means that we don't have electricity to live off the grid during the winter.

There was another instance in Mono county where the California Highway Patrol forbade Caltrans vehicles from entering affected areas for up to weeks due to avalanche concerns. It was a safety reason. This left my constituents stranded in + ice walls. Having communities with their own snow removals attempting to even get food services. We had to ask for resources to come in to fly in services, medical services, food and water to our residents.

We want to prevent situations like this in California and in this day and age, there should be no reason for us to be held at debilitating circumstances due to extreme weather. And we know that more is coming. Most of our snow in the northern region of our state is in the northern region of our state, but it also affects our most southern regions.

In San Bernardino County last year, rescue teams and community Members were trapped by snow and had to rely on outside resources and rescue efforts. In fact, Governor Newsom had to request of President Biden's Administration to deploy the National Guard for emergency assistance. Now, we get snow every year, but if we don't have the right equipment to help our constituents and our residents throughout the state, we have to call in the National Guard.

In the City of Mammoth Lakes, which I represent, they receive snow up to 30ft deep. That's the equivalent of a three story residential building. Me and my team, when we were able to get out there, and we did have to get escorted by CHP to make it there safely. I saw my constituents climbing on the snow to reach their roofs, to shovel snow off, just so that their roofs would not implode. And this is not unique to our Low income residents and our workforce residents.

This is all residents alike. To a point where our town was even told, you should probably close your town down until the snow melts. Well, we were skiing in Mammoth lakes through July 4. July there was still skiing. So to tell our towns to close down because we don't have the equipment or the resources to help make sure our residents are safe, tells me that we have a problem in California.

So, although there are currently some state reimbursements available for these snow removal costs, the increase in extreme weather events is imminent. We know that without the necessary measures for climate control, we are going to continue to see these patterns. All of our snow communities must have the financial or fiscal incentive to invest in snow removal vehicles that are modern, that are equipped without that excess financial strain.

Now, the City of Lake Tahoe, which many of you have either visited or know of, is also in my district. An example from their city. They recently purchased $3.7 million worth of snow removal equipment to meet the expected 12 hour snow clearance goals last winter. If this Bill were already in place, the city would have saved approximately $145,687 to reinvest into the residents and to ensure safety for all of our visitors across the state.

Now, that's probably not a big number when it comes to our $1.0 billion budget, and it really is not. But what it means is the difference to invest into workforce housing, to invest into local programs, to help with childcare services, to help with education programs, to the City of South Lake Tahoe. That $145,000 plus makes a huge difference to our budget. We hardly notice it.

So you may not think that the Bill affects your district, but every one of you in your districts has constituents that have a second home in South Lake Tahoe. Isn't that a fun fact? Everyone here would directly benefit from this Bill.

Because whether we rely on the drinking water that comes from our Sierra Nevada region, or we want the safety of our roads so we can protect life or have opportunities for outdoor recreation, skiing, cross country skiing, snowboarding, these are the communities that are affected, and these are the communities that live in your districts. Despite our geological differences, we are one California. And it is our responsibility to every californian who chooses to invest in our state.

By calling California home and the 50 million annual visitors to the Sierra Nevada encompassing 25% of our state. Now, I did have two people that were here to testify today, Mr. Anush Najed, our public works Director from the City of South Lake Tahoe. Unfortunately, the snowstorm is forcing him to stay and help orchestrate the city's response. Yesterday I met with the Mono county sheriff, who was also recognized as the 2021 national sheriff of the year.

And she had to leave early this morning again to make sure that she had made it home safely to her family before the fall of the snow. So I do have here to testify for us today. In support is Kyra Ross from Emmanuel Jones and associates, representing the town of Truckee.

Thank you very much, Senator, Ms. Ross, for the main testimony in favor of the Bill.

Good morning.

Kiara Ross, on behalf of the town of Truckee, in support of the Bill. The town of Truckee typically gets about 206 inches, or about 17ft of snow a year. So, snow removal is a very important part of what we do. It's part of our health and safety. It's part of how we protect our citizens and how people in the town of Truckee get around and get to work between the months of about November.

And we can get snow into May, even into the summer months on these really heavy years. So this Bill would be particularly helpful. Over the last four years, the town would have saved nearly, I believe it was $80,000 over the last four years in savings to the town. That's enough that we can really reinvest that back into additional equipment and we can reinvest it back into the people in the community.

So we think this would be a very helpful Bill and helpful to making sure that our people coming through and our economic development and the people of Truckee are staying safe in the winter months. Thank you.

Thank you very much. Do we have any me toos in support? Come on up to the mic. State your name and your organization.

Thank you. Good morning, Mr. Chair and Members. I'm Christina DeCaro, representing the California Ski Industry Association. We have 36 resorts in California and Nevada and very pleased to support the Bill today. Thank you so much.

Thank you.

Good morning, chair and Members. I'm Eric lawyer with the California State Association of Counties, representing all 58 counties in support. Thank you. Good morning. Ben Trippo with the League of California Cities in support. Good morning, chair and Members. Doug Houston, representing the Sierra Business Council. We too are in support. Thank you. All right, so now we will move to any opposition to the Bill. Do we have anybody who wishes to speak as a primary opposition witness? You have 2 minutes.

Thank you.

I'm Annie Chow with the California Teachers Association. We are regretfully in opposition, though she does have. Senator Alvarado-Gil does have a lot of old goals. Unfortunately, it does have a negative impact on state sales tax revenue, which ultimately reduces Prop . 98 funding, which impacts our schools and community colleges. So ask for your notebook.

Thank you.

Thank you very much. Do we have any? Me too's in opposition. Since there is nobody scrambling to the mics, we will come up to the dyess. Do we have anybody up from. My colleagues would like to comment or have questions. Go ahead.

Thank you, Senator. It seems for me it was like this is important to provide assistance to the local area. So in that sense, I think you've made a really powerful case for that. But when I read that the state already provides reimbursement for anything spending more than $5,000 for snow removal, there's actually two areas in which there's reimbursements. We already have a policy.

We could say the policy is there, that we are supportive and this is how we show, put our money where our mouth is as far as the policy is concerned. So I don't yet get why additional support, and I'm not trying to make this a fiscal argument because I know you're here for the policy, but it spills over to it.

But as long as we're already doing something and it could capture additional costs that local governments may be going through, it's capturing that in our current reimbursement policy. Why more? Just for more? And if the local governments don't have the incentive to do it for themselves, like we have to provide more funding so that they could be incentivized. So I'm not getting with what we already have in place, and the arguments don't seem to, are not strong enough for me to say we should do more.

I appreciate that, Senator Gerasbo, because I also wrestled with that as well before narrowing this Bill to specific snow removal vehicles. So my team was very diligent in looking at this as well. And from the state controller's office, we looked at the reimbursable snow removal report for fiscal year 23 and 24, and this comes out of the highway users tax. And we looked at all the counties throughout California, not just in my district.

And the disconnect is this, the reimbursement goes to the county and the county has the ability to disperse it throughout their county. You heard today from the City of Truckee, which has that local jurisdiction. If they are not allotted money from the county, it comes out of their local monies. So, this is an incentive for those local cities, those local public agencies, and again, no private. No private ski resorts. This is the public agencies to build that fleet at that local level.

Because if we have county vehicles that are sitting, I'm going to use El Dorado for an example. So El Dorado received just under $1.0 million of that highway use tax in 2324. We heard from South Tahoe, their Bill was 3.7 million. So that's about 25%. Right. So it doesn't cover the cost of just that local jurisdiction.

The other situation is that when we have counties that are so large, any disruption in snow or extreme weather along the 50, it creates a barrier between our public works in El Dorado county, which is in the El Dorado Hills area, to South Lake Tahoe, they just simply can't get there. We often are looking towards Nevada to help rescue our residents or to help us with that equipment.

So that's what I'm trying to do with this Bill, is to give that incentive to the local cities, local jurisdictions to be able to provide the equipment that they, again, being in a deficit year, it's never popular to throw forward some tax exemptions. And so you and I are really on the same page there.

But when I look at the larger picture and I look at the lives saved, and I looked at the potential for disaster, not only closing off our state highways, whole cities having to shut down, these are jobs. These are people who rely on the winter season for their income, whether they're a small business, restaurant, our workforce. And that can make the difference between being able to pay their bills during that time. But this reliance on public works, that's what tax dollars are for.

Our tax dollars are to help ensure that those public benefits are available to everyone. And it simply is an equity issue. Right. We just don't have these programs. We don't need them in our coastal cities for things such as snow removal. So this is an opportunity for us to support that one California with just a fraction of sales tax exemption.

Go ahead, Senator Glazer, thank you.

I appreciate you advocating strongly for your district, and this is certainly an example of that. I think you raised an issue at the beginning of your testimony that certainly resonates with me, which is that we have to make choices, we have to set priorities. But for me, health and safety is a high priority.

When I read the excellent analysis from the Committee on the Examples of tax exemptions that we provide in the state, and I see things like racehorse, breeding stock, well, that's not a difficult choice for me to compare what you're proposing in your measure, which is certainly a health and safety issue, with some other choices that we have made in our wisdom over the years, when we get these things in isolation, I think our first reaction is to say, well, we should look at this comprehensively.

What are all the things that we give exemptions to, and then how does this fit in? But I know we don't have that opportunity here in this Committee at this moment, at the beginning of your first policy hearing for your measure. So for me, it seems like it ranks right up there with a health and safety matter, and it's something that I'm happy to support today.

Thank you.

Oh, Derek. Senator Blakespear, thank you.

I appreciate my two colleagues'comments and questions. And I just want to reference what Senator DeRazzo was saying, because her question about, essentially the report says that the state reimburses counties for 80% of the preceding fiscal year. Snow removal or snow grooming costs over $5,000. So I think that that question really got at something that was front of mind for me.

But you answered it in a compelling way, I think, which was to focus on the disconnect between counties and cities, and especially in large geographic areas when it's difficult to really cover all the needs. And I think we see this in multiple different public policy areas where money goes to counties, and then how does that get distributed in a way that can serve the need the best?

So I think it's also just important, I'm going to support this Bill today, and I think it's important to note that it is serving your district really well, which I appreciate that, but also that it's only available for public agencies. So, like you said, it's not ski resorts that can get this, but that are money making operations. But it's also not just individual wealthy owners of properties that want to be able to buy more equipment to preserve their own private interest.

So to me, that's an important part, and I hope that doesn't change as the Bill moves through, that this is only available for public entities. So I will be supporting the Bill.

Thank you. Thank you.

All right. I guess that just leaves me, and I will be brief. We have some extraordinary circumstances, weather wise, that we were presented with last year. And essentially, I think cities, counties, the state were all caught short because they hadn't had things like to deal with for a long time. The San Bernardino mountains were down in our area, and we had people trapped in their homes because they weren't prepared and their communities weren't prepared, essentially.

And I rode with Caltrans people down, shipping people down south on the plane, trying to figure out how they're going to do this. And a lot of times what that means is local communities have to be able to do so. I think that sounded the alarm that we need to start ramping up our local resources so that they are locally available and immediately available in order to save lives and extract people from the situations that they were in last year.

And the money is kind of a shell game because it's going to come out somewhere, but to enable them to immediately have that savings and also take that savings and put it into either the overtime to operate the equipment or to other parts, other equipment that they will need. In addition to that, I think is really useful. I think it's a useful expenditure or a useful exemption for our communities to have available to them.

I'll be supporting your Bill, and with that, I'll allow you to close. Yes, one more question.

Thank you. Have you calculated. Again, I know this is not a fiscal Committee, but have you made any kind of calculation as to an estimate of what this could become?

Yes. So it is very difficult to have.

A hard number because we don't know who would take advantage of this. Right. So I'm using the case study of South Lake Tahoe, which is one of the most populated areas for snow recreation. And we know every year we get snow in that area. And so using the number of 3.7 million of their investment, it's about 3.9% of the tax rate that would have been saved there. So again, we're not talking millions or even billions. These are very small numbers.

When I look at the reimbursement, the county reimbursement from the state controller's office, let's see, El Dorado county received $1 million in reimbursement, and the only other county that received even close to that was placer. So these are very small fraction of numbers. And again, this is state sales tax. So anytime I get opposition from CTA, which is not often, but anytime I do, it really does tug at my heartstrings, because our teachers do so much in our rural communities to keep our communities connected.

And it's snow days or extreme weather days that close our schools as well. And this is a safety concern also for our educators. And so I don't want to make policy that takes money out of our education system.

However, this is an opportunity for us to invest in that safety concerns that our teachers are having as well, as well as our families that are just taking our kids to school, because closing schools, as we saw in the pandemic, has a negative impact on our whole community and our kids alike. So, it's a fraction of the costs compared to the benefits.

All right, with that, you may close.

Okay.

I think that is my closure. And I just want to thank you all for hearing us today and urge your aye vote. Thank you.

We have a motion to move the Bill by Senator Glazer. Go ahead and call the roll.

Motion is do passed to the Committee on Appropriations. Senator Caballero searto.

Aye. Seyarto, aye. Blakespear? Aye. Blakespear, aye. Dahle? Durazo. Aye. Durazo, aye. Glazer? Glazer, aye. Skinner Wiener, four to zero.

Thank you. Thank you so much.

All right. And we'll hold that Bill open and for others to vote on it. All right, next up, we have a Bill by me, so who's going to want to. Yeah. Move to a chair. I appreciate that. Yeah, she's on her way.

Okay, well, we're going to get started so that things keep moving here.

Thank you.

We have Senator Seyarto presenting SB 230, and I will turn it over to him.

Well, thank you, honorable chair. I'm here to present SB 230 and am accepting the Committee's suggested amendment, which is technical in nature. I presented this Bill and Committee last year, and I'm going to try to keep my comments brief. This Bill is in partial conformity with federal tax law, would allow income eligible taxpayers to claim a tax deduction equal to the amount the taxpayer contributes to an HSA, which is a health savings account.

The Bill limits the deduction to individuals and households at or below estimated median incomes. In order to open an HSA, the account owner must be enrolled in a high deductible health plan. So I want to be clear. This Bill does not promote or incentivize individuals to enroll in these high deductible health plans. Nobody wants a high deductible. Sometimes they're just put in that situation. However, some individuals do need to enroll in a high deductible health plan because it comes with a premium that they can afford.

This Bill seeks to help those who feel they have no other health care options. This Bill represents a choice and an opportunity to provide relief to individuals who find themselves in that position. And I respectfully ask for your. I vote, and I did not bring witnesses today.

Okay, so no witnesses.

No witnesses.

Okay, well, we will move to support. Do we have Members or Members of the public who'd wish to speak in support.

Thank you. Chair and Members Tim Madden, representing the California chapter of the American College of Emergency Physicians in Support, Adam chair and Members John Norwood, on behalf of the Independent Insurance Agents and Brokers Association of California and we would support this Bill just provides consumers with one other option to deal with their health care. Thank you. David Bolog, SFE alliance thank you for bringing this forth in support.

Thank you. Any other Members of the public wishing to testify in support? Not seeing any. We'll welcome anyone wishing to testify in opposition.

Good morning. Diana Douglas with Health Access California, the statewide Healthcare Consumer Advocacy Coalition. I am here in opposition to SB 230. We do appreciate that last year, the author's office took some of our concerns and amended the language of the Bill to add income limits to the tax deduction. However, health access California remains opposed to this Bill. Health savings accounts are savings accounts to pay for high deductibles.

These types of plans are unaffordable as consumers will have to pay potentially thousands of dollars in deductible costs before their plan covers anything. In 2024, the minimum deductible for a high deductible health plan for family coverage is $3,200. What family living on $80,000 a year or less can afford to spend over $3,000 before their health coverage kicks in? When health care is unaffordable, we know that people skip Doctor visits, delay getting lab tests, don't refill prescriptions. There's study after study showing that people delay care.

That is why this Legislature last year voted to zero out deductibles for many people uncovered California. Yet today you have a proposal to encourage high deductibles for individuals making less than 40,000 per year. As your analysis indicates, people in these lower income brackets are less likely to have money saved. Indeed, studies by the Federal Reserve indicate that many people in these income ranges have less than $400 in liquid savings for any purpose.

Giving them tax preferred treatment for savings they can't afford does not actually help them get any health care. Providing a tax deduction does not address systemic affordability issues with high deductible health plans, and especially during these difficult budget times. We should not be targeting state resources to encourage reliance on these costly plans that can have catastrophic financial impacts on enrollees who need care. This increases health disparities, reduces equity, and acts as a barrier to care for all Californians making less than the median income.

As such, I thank you for your time and respectfully ask for you to vote no on this Bill.

Good morning. Chair and Members Bryan Maramontes with AFSME in opposition.

Okay, thank you. Anyone else wishing to speak in opposition? Okay, seeing none, I will go to my colleagues. Would any of my colleagues like to make comments? Okay, I will make a comment. So I'm going to support this Bill today, and I'd like to just share a couple of the reasons why. So I think it's important to note that this is a tax deduction, a state tax deduction to a contribution to an HSA for people making under $42,000 a year.

So this is for very Low income people. And the income guidelines say that anyone who makes less than 47,520 qualify for government assistance. And we know when you are talking about housing costs that people at that income level are really struggling.

So the idea that they would be able to have a tax deduction, I think, makes a lot of sense because there are people who have to go into a high deductible health plan because they can't afford a Low deductible health plan because they don't make enough money. And so allowing them to put money into an HSA and then be able to deduct that from their taxes is something that will help people.

So I'm going to be supporting this today, and I just wanted to make sure that I explained why.

Thank you. Thank you.

And I can hand the gavel back to the chair. She's reemerged. So I just made my comments, and then if others wanted to, they could.

Other comments? You moved the Bill. Very good. There is a motion on the Bill, if there are no other comments, I voted this for in support of this last year, and I'll continue. And one of the big reasons is conformity with Federal Government. It's always good business to do that when we can do it. And this is one of those things that makes sense.

And I do appreciate we discussed the limits on who can avail themselves of this, and I think you've done a real good job on that. And for that reason, I'm going to support it today. So, if there's no other comments. oh, you may close.

Well, thank you very much. I, too, am concerned about health access for people, and one of their barriers is trying to decide if they should get insurance at all because the premiums are too high or if they do get insurance, something that they can afford, which usually comes with a high deductible. And so this helps out with both. I think it helps improve access to people that ordinarily be faced with not even going to the Doctor because they don't have health insurance at all.

And so I appreciate that, and I respectfully ask for an aye vote. Thank you.

Very good.

The motion is do pass as amended to the appropriations. Please call the roll, Senators.

Caballero? Aye. Caballero, aye. Seyarto? Aye. Seyart, aye. Blakespear, aye. Blakespear, aye. Dahle? Durazo? No. Durazo, no. Glazer? Aye. Glazer, aye. Skinner? Wiener? Four to one.

Four to one. We'll leave that open for the absent Members.

We're going to wait a couple of minutes. We have a couple of Members finishing up in another Committee, and then we'll take up the bills.

We're going to open the roll on the two bills that we have.

There he is, just walking in.

Perfect timing.

Okay.

We'll let the good senator get himself situated, and we're going to lift the call. We'll start with file item number one, which is SB 546 by Senator Alvarado-Gil. The motion that was made was do pass to appropriations. The chair will not be voting, and so we'll call the roll.

[Roll Call] Five to two

That Bill is out. Moving on to file item number two, SB 230. Senator Seyarto, please call the roll. Oh, that is do pass to appropriations. I'm sorry. Do pass is amended to appropriations, with the chair voting aye.

[Roll Call] Five to three.

That Bill is out. Five to three. That concludes our committee work for today. Thank you all very much for joining us, and we are adjourned.

So we are going to allow each side to have two witnesses, three minutes apiece. And as I said, they'll testify from the main mic. We're not going to utilize the desk at this time. Maybe later, once the flu season has passed. So what we're going to do is start off. We have two items on our agenda today. We're going to start off with file item number one, SB 546, Senator Alvarado Gale, who is present. If you want to come forward, please do so. Welcome. And we do have a quorum, so if we could take the role, please.

Senators. Caballero here. Seyarto, here. Blakespear, here Dahle. Durazo, here. Glazer, here. Skinner. Wiener. You have a quorum.

We do have a quorum. Welcome, Senator.

Thank you. I just realized my first time in front of this Committee, so this is an honor. Thank you.

You may proceed.

Thank you. Thank you. So, good morning, Madam Chair and Members of the Senate Governance and Finance Committee. I am in front of you today to present Senate Bill 456 which is a sales and use tax law exemption. I want to start out by saying that this is a district Bill and this is a district Bill that I had brought forward very early in my green phase as a Senator representing Senate district four.

And I was very excited to be like, you get a tax exemption, and you get a tax exemption. But the reality is fiscal responsibility makes us focus on the bills that we put forward, and I want to thank the chair to helping me do that in this last year. So this is a Bill that would enact a state sales tax and use exemption for public agencies to purchase dedicated snow removal vehicles.

And in the vehicle code, in the law, there is a very specific list of what those snow removal vehicles are. This Bill was derived directly from my district in response to the debilitating winter storms that we experienced last year. This was the devastating floods, avalanches, roof collapses, many that went on for months and months in the Sierra Nevadas, in the Central Valley. Thankfully, we had no loss of life with the increase of extreme weather events.

Winters such as last year's have shown how vital safe snow removal services are to the local level. You may have remembered on the news we had residents themselves attempting to remove snow with their own equipment. We did have some devastating injuries. Fortunately, no fatalities. This is a result. This Bill is a result of what we saw in this last year. The purpose is really to alleviate the burden put on local public agencies that invest in proper snow removal vehicles.

As a state sales tax exemption, this Bill will not affect any local or county tax revenues. This is simply a Bill that would add an incentive for public agencies to do the right thing to ensure that they have the equipment present. Now, you may be thinking, well, isn't that what Caltrans does? Right?

So let me talk to you a little bit about that. Well, last year, more than 6000 of my constituents customers were without power in the Sierra Nevada. Many of these residents became stranded without necessary resources or electricity. Those of us who live on wells, that means we have no access to water. Those of us who have solar means that we don't have electricity to live off the grid during the winter.

There was another instance in Mono County where the California Highway Patrol forbade Caltrans vehicles from entering affected areas for up to weeks due to avalanche concerns. It was a safety reason. This left my constituents stranded in ice walls. Having communities with their own snow removals attempting to even get food services. We had to ask for resources to come in to fly in services, medical services, food, and water to our residents.

We want to prevent situations like this in California and in this day and age, there should be no reason for us to be held at debilitating circumstances due to extreme weather. And we know that more is coming. Most of our snow in the northern region of our state is in the northern region of our state, but it also affects our most southern regions.

In San Bernardino County last year, rescue teams and community Members were trapped by snow and had to rely on outside resources and rescue efforts. In fact, Governor Newsom had to request of President Biden's Administration to deploy the National Guard for emergency assistance. Now, we get snow every year, but if we don't have the right equipment to help our constituents and our residents throughout the state, we have to call in the National Guard.

In the City of Mammoth Lakes, which I represent, they receive snow up to 30 ft deep. That's the equivalent of a three-story residential building. Me and my team, when we were able to get out there, and we did have to get escorted by CHP to make it there safely. I saw my constituents climbing on the snow to reach their roofs, to shovel snow off just so that their roofs would not implode. And this is not unique to our low-income residents and our workforce residents.

This is all residents alike, to a point where our town was even told, you should probably close your town down until the snow melts. Well, we were skiing in Mammoth lakes through July 4. July there was still skiing. So to tell our towns to close down because we don't have the equipment or the resources to help make sure our residents are safe, tells me that we have a problem in California.

So, although there are currently some state reimbursements available for these snow removal costs, the increase in extreme weather events is imminent. We know that without the necessary measures for climate control, we are going to continue to see these patterns. All of our snow communities must have the financial or fiscal incentive to invest in snow removal vehicles that are modern, that are equipped without that excess financial strain.

Now, the City of Lake Tahoe, which many of you have either visited or know of, is also in my district, an example from their city. They recently purchased $3.7 million worth of snow removal equipment to meet the expected 12 hour snow clearance goals last winter. If this Bill were already in place, the city would have saved approximately $145,687 to reinvest into the residents and to ensure safety for all of our visitors across the state.

Now, that's probably not a big number when it comes to our $1.0 billion budget, and it really is not. But what it means is the difference to invest into workforce housing, to invest into local programs, to help with childcare services, to help with education programs, to the City of South Lake Tahoe. That $145,000 plus makes a huge difference to our budget. We hardly notice it.

So you may not think that the Bill affects your district, but every one of you in your districts has constituents that have a second home in South Lake Tahoe. Isn't that a fun fact? Everyone here would directly benefit from this Bill.

Because whether we rely on the drinking water that comes from our Sierra Nevada region, or we want the safety of our roads so we can protect life or have opportunities for outdoor recreation, skiing, cross country skiing, snowboarding, these are the communities that are affected, and these are the communities that live in your districts. Despite our geological differences, we are one California. And it is our responsibility to every californian who chooses to invest in our state.

By calling California home and the 50 million annual visitors to the Sierra Nevada encompassing 25% of our state. Now, I did have two people that were here to testify today, Mr. Anush Nejad, our Public Works Director from the City of South Lake Tahoe. Unfortunately, the snowstorm is forcing him to stay and help orchestrate the city's response. Yesterday I met with the Mono County Sheriff, who was also recognized as the 2021 National Sheriff of the year.

And she had to leave early this morning again to make sure that she had made it home safely to her family before the fall of the snow. So I do have here to testify for us today. In support is Kyra Ross from Emanuels Jones and Associates, representing the town of Truckee.

Thank you very much, Senator, Ms. Ross, for the main testimony in favor of the Bill.

Good morning. Kyra Ross, on behalf of the town of Truckee, in support of the Bill. The town of Truckee typically gets about 206 inches, or about 17 ft of snow a year. So snow removal is a very important part of what we do. It's part of our health and safety. It's part of how we protect our citizens and how people in the town of Truckee get around and get to work between the months of about November.

And we can get snow into May, even into the summer months on these really heavy years. So this Bill would be particularly helpful. Over the last four years, the town would have saved nearly, I believe it was $80,000 over the last four years in savings to the town. That's enough that we can really reinvest that back into additional equipment and we can reinvest it back into the people in the community.

So we think this would be a very helpful Bill and helpful to making sure that our people coming through and our economic development and the people of Truckee are staying safe in the winter months. Thank you.

Thank you very much. Do we have any me toos in support? Come on up to the mic. state your name and your organization.

Thank you. Good morning, Mr. Chair and Members. I'm Christina De Caro, representing the California Ski Industry Association. We have 36 resorts in California and Nevada and very pleased to support the Bill today. Thank you so much. Thank you.

Good morning, Chair and Members. I'm Eric Lawyer with the California State Association of Counties, representing all 58 counties in support. Thank you.

Good morning. Ben Trippo with the League of California Cities in support.

Good morning, Chair and Members. Doug Houston, representing the Sierra Business Council. We too are in support.

Thank you. All right, so now we will move to any opposition to the Bill. Do we have anybody who wishes to speak as a primary opposition witness? You have two minutes. Thank you.

I'm Annie Chow with the California Teachers Association. We are regretfully in opposition, though she does have. Senator Alvarado-Gil does have a lot of old goals. Unfortunately, it does have a negative impact on state sales tax revenue, which ultimately reduces Prop . 98 funding, which impacts their schools and community colleges. So ask for your vote. Thank you.

Thank you very much. Do we have any me toos in opposition? Since there is nobody scrambling to the mics, we will come up to the dyess. Do we have anybody up from. My colleagues would like to comment or have questions. Go ahead.

Thank you, Senator. It seems for me it was like this is important to provide assistance to the local area. So in that sense, I think you've made a really powerful case for that. But when I read that the state already provides reimbursement for anything spending more than $5,000 for snow removal, there's actually two areas in which there's reimbursements. We already have a policy.

We could say the policy is there, that we are supportive and this is how we show, put our money where our mouth is as far as the policy is concerned. So I don't yet get why additional support, and I'm not trying to make this a fiscal argument because I know you're here for the policy, but it spills over to it.

But as long as we're already doing something and it could capture additional costs that local governments may be going through, it's capturing that in our current reimbursement policy. Why more? Just for more? And if the local governments don't have the incentive to do it for themselves, like we have to provide more funding so that they could be incentivized. So I'm not getting with what we already have in place. And the arguments don't seem to are not strong enough for me to say we should do more.

I appreciate that, Senator Durazo, because I also wrestled with that as well before narrowing this Bill to specific snow removal vehicles. So my team was very diligent in looking at this as well. And from the state controller's office, we looked at the reimbursable snow removal report for fiscal year 23 and 24, and this comes out of the highway users tax. And we looked at all the counties throughout California, not just in my district.

And the disconnect is this, the reimbursement goes to the county and the county has the ability to disperse it throughout their county. You heard today from the City of Truckee, which has that local jurisdiction. If they are not allotted money from the county, it comes out of their local monies. So this is an incentive for those local cities, those local public agencies, and again, no private. No private ski resorts. This is the public agencies to build that fleet at that local level.

Because if we have county vehicles that are sitting, I'm going to use El Dorado for an example. So El Dorado received just under $1.0 million of that highway use tax in 2324. We heard from South Tahoe, their Bill was 3.7 million. So that's about 25%. Right. So it doesn't cover the cost of just that local jurisdiction.

The other situation is that when we have counties that are so large, any disruption in snow or extreme weather along the 50, it creates a barrier between our public works in El Dorado County, which is in the El Dorado Hills area, to South Lake Tahoe, they just simply can't get there. We often are looking towards Nevada to help rescue our residents or to help us with that equipment.

So that's what I'm trying to do with this Bill, is to give that incentive to the local cities, local jurisdictions to be able to provide the equipment that they, again, you know, being in a deficit year, it's never popular to throw forward some tax exemptions. And so you and I are really on the same page there.

But when I look at the larger picture and I look at the lives saved, and I looked at the potential for disaster, not only closing off our state highways, whole cities having to shut down, these are jobs. These are people who rely on the winter season for their income, whether they're a small business, restaurant, our workforce. And that can make the difference between being able to pay their bills during that time. But this reliance on public works, that's what tax dollars are for.

Our tax dollars are to help ensure that those public benefits are available to everyone. And it simply is an equity issue. Right. We just don't have these programs. We don't need them in our coastal cities for things such as snow removal. So this is an opportunity for us to support that one California with just a fraction of sales tax exemption.

Go ahead, Senator Glazer, thank you.

I appreciate you advocating strongly for your district, and this is certainly an example of that. I think you raised an issue at the beginning of your testimony that certainly resonates with me, which is that we have to make choices, we have to set priorities. But for me, health and safety is a high priority.

When I read the excellent analysis from the Committee on the examples of tax exemptions that we provide in the state, and I see things like racehorse, breeding stock, well, that's not a difficult choice for me to compare what you're proposing in your measure, which is certainly a health and safety issue, with some other choices that we have made in our wisdom over the years, when we get these things in isolation, I think our first reaction is to say, well, we should look at this comprehensively.

What are all the things that we give exemptions to, and then how does this fit in? But I know we don't have that opportunity here in this Committee at this moment, at the beginning of your first policy hearing for your measure. So for me, it seems like it ranks right up there with a health and safety matter, and it's something that I'm happy to support today. Thank you.

Senator Blakespear.

Thank you. I appreciate my two colleagues' comments and questions. And I just want to reference what Senator Durazo was saying, because her question about, essentially the report says that the state reimburses counties for 80% of the preceding fiscal year, snow removal or snow grooming costs over $5,000. So I think that that question really got at something that was front of mind for me.

But you answered it in a compelling way, I think, which was to focus on the disconnect between counties and cities, and especially in large geographic areas when it's difficult to really cover all the needs. And I think we see this in multiple different public policy areas where money goes to counties, and then how does that get distributed in a way that can serve the need the best?

So I think it's also just important, I'm going to support this Bill today, and I think it's important to note that it is serving your district really well, which I appreciate that, but also that it's only available for public agencies. So, like you said, it's not ski resorts that can get this, but that are money making operations. But it's also not just individual wealthy owners of properties that want to be able to buy more equipment to preserve their own private interest. So to me, that's an important part, and I hope that doesn't change as the Bill moves through, that this is only available for public entities. So I will be supporting the Bill. Thank you.

Thank you. All right. I guess that just leaves me, and I will be brief. We have some extraordinary circumstances, weather wise, that we were presented with last year. And essentially, I think cities, counties, the state were all caught short because they hadn't had things like to deal with for a long time. The San Bernardino mountains were down in our area, and we had people trapped in their homes because they weren't prepared and their communities weren't prepared, essentially.

And I rode with Caltrans people down, shipping people down south on the plane, trying to figure out how they're going to do this. And a lot of times what that means is local communities have to be able to do so. I think that sounded the alarm that we need to start ramping up our local resources so that they are locally available and immediately available in order to save lives and extract people from the situations that they were in last year.

And the money is kind of a shell game because it's going to come out somewhere, but to enable them to immediately have that savings and also take that savings and put it into either the overtime to operate the equipment or to other parts, other equipment that they will need. In addition to that, I think is really useful. I think it's a useful expenditure or a useful exemption for our communities to have available to them. I'll be supporting your Bill, and with that, I'll allow you to close. Yes, one more question.

Thank you. Have you calculated? Again, I know this is not a Fiscal Committee, but have you made any kind of calculation as to an estimate of what this could become?

Yes. So it is very difficult to have. A hard number because we don't know who would take advantage of this. Right. So I'm using the case study of South Lake Tahoe, which is one of the most populated areas for snow recreation. And we know every year we get snow in that area. And so using the number of 3.7 million of their investment, it's about 3.9% of the tax rate that would have been saved there. So again, we're not talking millions or even billions. These are very small numbers.

When I look at the reimbursement, the county reimbursement from the state controller's office, let's see, El Dorado county received $1 million in reimbursement, and the only other county that received even close to that was placer. So these are very small fraction of numbers. And again, this is state sales tax. So anytime I get opposition from CTA, which is not often, but anytime I do, it really does tug at my heartstrings, because our teachers do so much in our rural communities to keep our communities connected.

And it's snow days or extreme weather days that close our schools as well. And this is a safety concern also for our educators. And so I don't want to make policy that takes money out of our education system.

However, this is an opportunity for us to invest in that safety concerns that our teachers are having as well, as well as our families that are just taking our kids to school, because closing schools, as we saw in the pandemic, has a negative impact on our whole community and our kids alike. So it's a fraction of the costs compared to the benefits.

All right, with that, you may close.

Okay. I think that is my closure. And I just want to thank you all for hearing us today and urge your aye vote. Thank you.

We have a motion to move the Bill by Senator Glazer. Go ahead and call the roll.

Motion is do pass to the Committee on Appropriations. Senator Caballero. Seyarto aye. Blakespear aye. Durazo aye. Glazer aye. Skinner. Wiener. Four to zero.

Thank you. Thank you so much.

All right. And we'll hold that Bill open for others to vote on it. All right, next up, we have a Bill by me, so who's going to want to. Yeah, I'm presenting you both. I appreciate that.

Yeah, she's on her way. Okay, well, we're going to get started so that things keep moving here.

Thank you.

We have Senator Seyarto presenting SB 230, and I will turn it over to him.

Well, thank you, honorable chair. I'm here to present SB 230 and am accepting the Committee's suggested amendment, which is technical in nature. I presented this Bill and Committee last year, and I'm going to try to keep my comments brief. This Bill is in partial conformity with federal tax law, would allow income eligible taxpayers to claim a tax deduction equal to the amount the taxpayer contributes to an HSA, which is a health savings account.

The Bill limits the deduction to individuals and households at or below estimated median incomes. In order to open an HSA, the account owner must be enrolled in a high deductible health plan. So I want to be clear. This Bill does not promote or incentivize individuals to enroll in these high deductible health plans. Nobody wants a high deductible. Sometimes you're just put in that situation. However, some individuals do need to enroll in a high deductible health plan because it comes with a premium that they can afford.

This Bill seeks to help those who feel they have no other health care options. This Bill represents a choice and an opportunity to provide relief to individuals who find themselves in that position. And I respectfully ask for your. aye vote, and I did not bring witnesses today.

Okay, so no witnesses.

No witnesses.

Okay, well, we will move to support. Do we have Members or Members of the public who'd wish to speak in.

Support thank you chair and Members Tim Madden, representing the California chapter of the American College of Emergency Physicians in Support.

Madam chair and Members John Norwood, on behalf of the Independent Insurance Agents and Brokers Association of California and we would support this Bill just provides consumers with one other option to deal with their health care. Thank you.

David Bolog, SFE alliance thank you for bringing this forth in support.

Thank you. Any other Members of the public wishing to testify in support? Not seeing any. We'll welcome anyone wishing to testify in opposition.

Thank good morning. Diana Douglas with Health Access California, the statewide Healthcare consumer advocacy coalition. I am here in opposition to SB 230. We do appreciate that last year, the author's office took some of our concerns and amended the language of the Bill to add income limits to the tax deduction. However, health access California remains opposed to this Bill. Health savings accounts are savings accounts to pay for high deductibles.

These types of plans are unaffordable as consumers will have to pay potentially thousands of dollars in deductible costs before their plan covers anything. In 2024, the minimum deductible for a high deductible health plan for family coverage is $3,200. What family living on $80,000 a year or less can afford to spend over $3,000 before their health coverage kicks in? When health care is unaffordable, we know that people skip Doctor visits, delay getting lab tests, don't refill prescriptions. There's study after study showing that people delay care.

That is why this Legislature last year voted to zero out deductibles for many people uncovered California. Yet today you have a proposal to encourage high deductibles for individuals making less than 40,000 per year. As your analysis indicates, people in these lower income brackets are less likely to have money saved. Indeed, studies by the Federal Reserve indicate that many people in these income ranges have less than $400 in liquid savings for any purpose.

Giving them tax preferred treatment for savings they can't afford does not actually help them get any health care. Providing a tax deduction does not address systemic affordability issues with high deductible health plans, and especially during these difficult budget times. We should not be targeting state resources to encourage reliance on these costly plans that can have catastrophic financial impacts on enrollees who need care. This increases health disparities, reduces equity, and acts as a barrier to care for all Californians making less than the median income.

As such, I thank you for your time and respectfully ask for you to vote no on this Bill.

Good morning. Chair and Members Bryant Maramontes with AFSME in opposition.

Okay, thank you. Anyone else wishing to speak in opposition? Okay, seeing none, I will go to my colleagues. Would any of my colleagues like to make comments? Okay, I will make a comment. So I'm going to support this Bill today, and I'd like to just share a couple of the reasons why. So I think it's important to note that this is a tax deduction, a state tax deduction to a contribution to an HSA for people making under $42,000 a year.

So this is for very Low income people. And the income guidelines say that anyone who makes less than 47,520 qualify for government assistance. And we know when you are talking about housing costs that people at that income level are really struggling.

So the idea that they would be able to have a tax deduction, I think, makes a lot of sense because there are people who have to go into a high deductible health plan because they can't afford a Low deductible health plan because they don't make enough money. And so allowing them to put money into an HSA and then be able to deduct that from their taxes is something that will help people.

So I'm going to be supporting this today, and I just wanted to make sure that I explained why.

Thank you. Thank you. And I can hand the gavel back to the chair. She's reemerged. So I just made my comments, and then if others wanted to, they could.

Other comments? You moved the Bill. Very good. There is a motion on the Bill, if there are no other comments, I voted this for in support of this last year, and I'll continue. And one of the big reasons is conformity with Federal Government. It's always good business to do that when we can do it. And this is one of those things that makes sense.

And I do appreciate we discussed the limits on who can avail themselves of this, and I think you've done a real good job on that. And for that reason, I'm going to support it today. So if there's no other comments. zero, you may close.

Well, thank you very much. I, too, am concerned about health access for people, and one of their barriers is trying to decide if they should get insurance at all because the premiums are too high or if they do get insurance, something that they can afford, which usually comes with a high deductible. And so this helps out with both. I think it helps improve access to people that ordinarily be faced with not even going to the Doctor because they don't have health insurance at all. And so I appreciate that, and I respectfully ask for an aye vote. Thank you.

Very good. The motion is do pass as amended to the appropriations. Please call the roll.

Senators. Caballero, aye. Seyarto, aye. Blakespear, aye. Dahle. Durazo, no. Glazer, aye. Skinner. Wiener. 4-1

Four to one. We'll leave that open for the absent Members.

We're going to wait a couple of minutes. We have a couple of Members finishing up in another Committee, and then we'll take up the bills.

We're going to open the roll on the two bills that we have. Perfect timing. Okay.

We'll let the Senator, a good Senator, get himself situated. We're going to lift the call. We'll start with file item number one, which is SB 546 by Senator Alvarado-Gil. The motion that was made was do pass to appropriations. The chair will not be voting, and so we'll call the roll.

Senators Caballero, Dahle, aye. Skinner, no. Wiener, No. 5-2

That Bill is out. Moving on to file item number two, SB 230. Senator Seyarto, please call the roll. zero, that is do pass to appropriations. I'm sorry? Due pass is amended to appropriations, with the chair voting aye.

Senators Dahle, aye. Skinner, No. Wiener, No. Five to three that Bill is out.

Five to three. That concludes our Committee work for today. Thank you all very much for joining us, and we are adjourned. Okay.