Assembly Standing Committee on Revenue and Taxation

I'm extremely grateful and to our new Members we say welcome and to those returning we say welcome to you as well. I look forward to working with all of you as we consider bills under our jurisdiction. Before we take up bills on the agenda today, I will be addressing a few housekeeping items.

First, I want to make sure that everyone understands that the Assembly has rules to ensure that we maintain an order and an orderly and ran efficient and fair hearing. Both support and opposition will be allowed up to two minutes for the two. Excuse me. Up to two minutes for their two primary witness on each bills.

Also we'll have two minutes for testimonies provided all subsequent witnesses should state their name, their organization and the position on the Bill. That's all we will be accepting in this Committee. We will apply these rules consistently to all people who participate in our proceedings regardless of the viewpoints they express.

We will not permit conduct, disruption, disturbance or otherwise impeding the orderly conduct of the legislative proceedings. You in this Committee. We will not accept disruption or disturbance behaviors or behaviors that will incite or threaten violence. In this Committee. Please be aware that violators of these rules may be subject to removal or other law enforcement actions.

With that being said, we will now turn to our attendees adoption of our proposed Committee rules which were distributed to the Committee Members as of February of February 25th of this year, so Members should have already read them. The Committee rules will be posted on a website once it has been adopted.

I want to note that we will be reinstituting a suspense file and the details about that process are spelled out in the proposed Committee rules. In summary, bills with a fiscal impact of plus or minus $150,000 will be will not be eligible for a vote immediately after the presentation.

Instead it will be referred to a suspense file that will enable the Committee to holistically consider proposals before us as and better prioritize policy changes which is especially important this year given the given the projected budget restraints and conditions we find ourselves in as a state.

Accordingly one Only one Bill today on the agenda will be eligible for a vote after presentation. That is file item number 6 AB4 18 by Wilson. Additional Additional file items item number 3 AB330 by Rogers has been pulled today's by the author. Today's hearing. So with that I will entertain. No, let's establish a quorum first. Ms.

Hyland, please give us a roll call.

Gibson.

Aye.

[Roll call]

Thank you very much. A quorum has been established. We will now take up the adoption of our proposed Committee rules. May I have a motion on the Committee rules?

Mr. Chair, I move we adopt the rules.

So properly moved in second. Madam Secretary, please call the role on the Committee's adoption of the rules on the Committee rules.

Gibson.

Aye.

Gibson I Ta. Ta. I. Baines. DeMaio. DeMaio I. Garcia. Garcia I. McKinner. Quicksilva. Quicksilva. Five to zero the Bill. The rules are adopted.

The vote is five eyes and no nos. The Committee rules have been adopted. Thank you very much, Members. We will now move to our first item on our Regular scheduled agenda. AB27 by Ms. Member Shalvo. Okay, so we will. Thank you very much. We have no problem with that. We will move to item by Wilson. 418. Ms.

Wilson, would you please come and approach and begin when ready. File item number for the audience is file item number six. AB418 by Wilson for both your witnesses. You have two minutes each each and you may commence when ready.

Good afternoon, Mr. Chair and Members. I'm pleased to present AB418 which creates a process that California's county tax collectors will follow when utilizing the Chapter 8 sale process. Affording property owners an administrative remedy if the property owner disputes the price set at the Chapter 8 tax out. When a property tax.

When property is tax defaulted, there are two primary ways to dispose of it. Chapter 7 Sales. These are competitive auctions where a property may sell for more than the outstanding taxes. If that happens, the original owner is entitled to the excess proceeds and has one year to claim them.

Under California law, Chapter 8 sells instead of an auction. These sales involve a negotiated price with qualified bidders such as public agencies or nonprofits who use the properties for affordable housing or open space preservation.

The US Supreme Court unanimously ruled that Hennepin County, Minnesota violated Geraldine Tyler's constitutional rights by keeping 25,000 after selling her home to cover a $15,000 debt tax. Debt. Currently, California law prevents counties from depriving property owners of their excess proceeds without first providing one year to file that claim.

However, the use of Chapter 8 sales process, which involves a negotiated sales price of the defaulted property, has created concerns about potential violations of Tyler v. Hennepin if the property is disposed of for less than the fair market value.

There are thousands of tax defaulted properties throughout California that hold very little value for various reasons, making them difficult to itemize and statute fully. Chapter 8 Tax Sales proves useful for distributing countless of those of these Low value properties across California. Chapter 7 Auction sales are often expensive and ineffective.

Many properties repeatedly go through this cycle as buyers acquire them at auction, then abandon them after finding no developmental potential. This leads to ongoing defaults, repeated resales and financial losses.

The Chapter 8 sales process allows county tax collectors to dispose of these properties in a sensible way that does not waste public funds paying for private appraisals that could be recovered in a tax cell due to the Low value of the property.

We have added amendments to address the concerns of the Howard Jarvis Taxpayers Association, which in turn brought them to a support position by changing the 30 day notification requirement. Tax collectors must notify an assessee before a sale to 45 days.

With me today is my Solano county treasurer, Tax Collector Chuck Lomali and Lake County Tax Collector Patrick Sullivan. In support of this important measure, I'd like to turn it over to my expert witnesses.

Thank you very much. Two minutes each. Thank you very much. Two minutes each.

Good morning, Mr. Chairman, Members of the Committee. My name is Chuck Lamelli. I'm the Treasure Tax Collector here in Solano County. I'm here in support of this Bill. It does two things that are critically important in my estimation. The first is it establishes a clear cut process for all the parties involved in the Chapter eight to follow.

The second thing it does is it requires a noticed hearing where all the parties can come together and discuss all of the matters that are involved with the sale.

For example, your nonprofit agencies that can come in and bid on a property would be able to explain to the cities and the county what they plan to use those properties for. There would be a discussion about the negotiated price that's on the table, how that price was established, and a justification for the price.

And it also gives everybody, again that's involved in the discussion a seat at the table to voice their opinions on those matters.

And for that matter, just the fact that we have a notice public hearing where everybody has to come together and discuss it in public, and the neighborhoods where these properties may be located have the opportunity to come in and weigh in is critical. Thank you, Mr. Chairman.

Thank you. Next witness, two minutes please.

Thank you. Patrick Sullivan, Treasure Tax Collector, Lake County. Thank you, Assemblymember Wilson for bringing this Bill forward. And thank you to the Committee for the Opportunity to speak here today.

I just want to highlight that this gives us a clear procedure to highlight to safeguard due process for all the parties involved with the notice hearing that's been discussed. I did want to touch on a few of Lake County's experiences with Chapter 8 sales, just to discuss the type of properties that are often involved in these.

Typically, we're dealing with inaccessible subdivisions, nuisance properties, lands that have been damaged by wildfire or in other way compromised or have some kind of unusual characteristics. These generally are not normal mainstream properties. Typically those are redeemed by the owner or by a lender.

A lot of the properties we deal with were sold by land speculators over a century ago. And when we do put them in an auction, it just restarts the cycle again, as was discussed, and just triggers the same problem from occurring over and over again. There's also nuisance properties that cities have attempted to clean up post wildfire.

And this falls in the same category when we look at alternatives there to chapter, to Chapter eight sales. Often it's Chapter seven sales or an appraisal. All of these have proven to be very costly for the county. And because of the type of properties involved, they have been ineffective in dealing with them.

So we've attempted to sell them repeatedly. There have been previous attempts at auction. And I think this Bill now offers an us. Offers us an opportunity to move forward with the regulated process that we can all get behind. Thank you.

Okay, thank you very much. Now, this is a time that we can ask Members in the audience if you want to speak in support. Again, we ask you to just state your name, organization, and your position on the Bill. That's all we have time for.

So if you can please make a line and come to the microphone and commence with your name, organization and position.

Good afternoon. Mark Stivers with the California Housing Partnership and support. Thank you. Thank you.

Thank you. Scott Kaufman, Howard Jarvis Taxpayer Association in support. Thank you.

Emma Jungwirth on behalf of the California. State Association of Counties and support.

Thank you very much. Next, we will invite any opposition, opposition to AB418 to please come and join us. Hearing and seeing none. We'll bring it back to the Committee. Mr.

Meyer, thank you. I want to commend my colleague, Ms. Wilson for bringing this Bill forward. Assembly Bill 418. Many don't know, but next week is National Sunshine Week. It's all about providing more transparency to federal, state and local government.

And I see this Bill as a transparency Bill because it gives the public and the property owners the ability to Know what actually is going on. When you have an auction, you know that you're going to get best value. And if there's excess proceeds, the property owner is entitled to those. The Supreme Court.

And thank you very much for bringing up that landmark case which was hard fought because we did see shenanigans across the country by local governments in these disputes over unpaid taxes. The more we can get into Chapter seven sales, the better. But what you are providing is much needed oversight and accountability for these Chapter 8 sales.

And I'm looking forward to seeing full passage and implementation of this reform.

Thank you.

Any other Members have any questions? Hearing and seeing none. Ms. Wilson, you may close.

Thank you. I appreciate that. Thank you, too. Thank you for those well spoken words to my colleague in regard to what this AB 418 is working to do. I appreciate my witnesses, both Mr. Sullivan and Mr. Lomelli. I had an opportunity to serve early in my career as an internal Auditor for Solano county.

And I remember having to go audit his Department quarterly for the regular quarterly cash count, as well as other internal audits. And he always passed, which is wonderful. So I appreciate your time. Mr.

Chairman and Members, we respectfully request an I vote on AB 418, which establishes a clear and transparent process for county tax collectors in California when conducting Chapter 8 sales, ensuring property owners have an opportunity to dispute the sale price.

Thank you very much. This Bill will be voted on right now. And so it shares. I do pass by the chair. It's been moved by Mr. DeMaio. zero, was it? Ms. McKenna. Thank you. Stand corrected. Is there a second? Thank you very much. By Mr. DeMaio. Madam Secretary Highland, would you please call.

[Roll call]

That Bill is 6 to 0. That Bill is out. Congratulations. Thank you very much. Next up, we'll have item number one, AB27, by. Ms. Shaba, would you please? Unless you're passing it to someone else this time. This.

Okay, we're coming. We're coming.

You may proceed when ready.

Thank you so much. Mr. Chair. I am really thrilled to present AB27 to you today. As many of you may know, we have a burning landfill in our district that has been burning since before I was elected and now is 40 acres of trash that is burning about 30ft down in the Chiquita Canyon. Landfill.

It has been releasing toxic fumes that are making our community sick. There's a possible cancer cluster that has developed next to the landfill. And because of that, the landfill had created a relief Fund because neighbors of this landfill have had to keep their windows and doors closed.

They've had to run their AC or Heat 247 for people who have swamp coolers. They just haven't been able to have any air. And because of their increased cost, some people have had to replace swamp coolers.

They've had to pay really high electric and utility bills because of the cost of this and obviously going to the Doctor, medical. So many increased costs that people in our community have been experiencing because of this disaster. So those funds have really been critical to support people in our community.

But the concern has been that if you take those funds, then do you no longer qualify for CalFresh or Medi California? Does it count against you because of that? Are you paying taxes now on this when that money comes in and it goes right out to pay for the costs that are associated with living with this disaster?

So we are requesting in AB27 that this not be counted as gross income. It would not be counted against people being able to both qualify for state assistance programs and also that it would not be taxed. So I have a couple witnesses here today from our community who we flew up to be able to testify.

Steven Howse and Kevan Smalley. And you can choose who goes first and second.

Thank you very much. I just want to remind the witness you have two minutes each. So whoever wants to go first, please proceed.

Take the microphone if you're gonna.

All right, thank you very much for allowing me to speak today. My name is Steven Howse. I lived in Valverde since 1998 with my wife and four kids. We fell in love with the quiet area, the rich history and the close community moving there. We were told the landfill was closing and it was not an issue.

Later we found out that that was not the case. Two expansion later in 2023, the landfill had a blowout in the side of the landfill, releasing leachate and poisonous gases like methane and benzene, causing numerous health issues in our community ranging from trouble breathing, bloody noses, headaches, instant nausea, brain fog.

Over 10 of my very close neighbors developed various types of cancer, including my next door neighbor. In February of 2024, my wife was diagnosed with stage 3 breast cancer. In July, my 19 year old daughter was 30, diagnosed with a rare autoimmune disease.

Exasperated by landfill toxins and gas where she has to take allergy medications daily always carry an EpiPen and an inhaler in case the toxins cause an episode. As a healthy person myself who rarely ever gets sick, I started to suffer from constant sinus infections and now use a daily nasal spray allergy medication and carry an inhaler.

The Chequeta Canyon landfill set up a community relief Fund for nearby residents to use for relocation, home Hardening, increased electrical bills, et cetera. I'm located about 1600ft from the landfill and I qualified for those funds. Not really knowing how long the funds would last. I began to use the monthly funds to Harden my house.

We could no longer use my evaporative cooler or open the windows at night to cool down the house. So I had to replace our very inefficient central AC system and ducting with a whole new closed system and a HEPA filtration.

Next, I started replacing my windows as the odors and toxins would actually come through the older windows that I had at my house, sealing up my doors. I also purchased high end medical grade air purifiers in my house to help with the odors and the toxins.

Now I'm running AC and multiple air purifiers 247 and that gracefully increased my electricity bills despite the fact that I bought solar for my house. Homeschooling our 13 year old son.

A lot of times we had to leave the area due to the toxins, using the funds for memberships or food as we'd have to leave because it would be so bad at our house. We also used the funds to take our RV trailer out of the area or visit family when we just couldn't take it any longer.

And we need to rest and recoup. So I'm asking you to take action to make these relief funds non taxable as it's possible. These funds will put me in a higher tax bracket and caused me to owe taxes as a result these funds when in fact I did use them for the intended purpose. Thank you so much for your time.

Thank you so much for your time.

Thank you very much. Next witness, two minutes please.

Hello, my name is Kevan Smalley and I bought my home in Valverde in 1987. I was informed while in escrow by my agent the landfill will shut down in 1997. Instead, the landfill was given a 20 year extension and another 30 year extension in 2017.

Here we are years later and the landfill has finally closed only after it caused a public health emergency. 20,000 people. The landfill has been taking in waste from all areas and improperly disposing of it. They have Accepted PCB waste from high school in Malibu that was making the students and teachers sick.

Nuclear waste from Rocketdyne and remains of a hazardous waste incident that happened in Santa Paula. The fire is burning all those toxic articles releasing fumes into the air for us to breathe and contaminating our water. My home is less than two miles away from the Chiquita landfill.

I smell fumes every day, constantly breathing it in affecting my health condition giving me post nasal drip trouble with sleeping resulting in chronic fatigue that affects my day to day activities. I regularly ride my bike around the neighborhood which is difficult to enjoy because the odor we are paying for a disaster that we didn't create.

To help alleviate our pain the Kita Canyon landfill provided us residents with air purifiers and set up a relief Fund. I was able to receive some funds to purchase better filters and pay my utilities and it helped. But the issue is still there and still continue to be. On top of that public benefits lapsed.

I didn't reapply because I was afraid the relief dollars I want received would mean I would no longer qualify. But that support I really do need. The community and I are tired of living in these conditions.

We are afraid of what other long term effects are to come up on top of the current conditions that has already influenced our lifestyle. Please see the effects this disaster has brought and help my neighbors. And I ask that you support AB27 today and bring some relief and hope to victims of our tragedy.

Thank you very much. At this time any additional people in the room wishing to speak in support please line up on my left. This is support, name, organization and your position.

Thank you. I'm Will Breeger from Climate Action California and I have been asked to speak. For several other groups. I'll just read those. The Glendale Environmental Coalition, 350 Sacramento. 350 Humboldt. The Elders Climate Action in Northern California. The Climate Reality Project for San Fernando Valley.

They have a chapter in Silicon Valley also in support and in Los Angeles, last but not least, the Santa Cruz Climate Action Network. Thank you.

Thank you very much. Thank you very much.

Hi, Erica Parker with Californians Against Waste and strong support. Thank you.

Thank you very much.

Hello, my name is Thomas Alvarez. I'm a resident of Assembly District 40 and I support this Bill.

Thank you very much. Next primary witness in opposition. Would you please make yourself known by coming to the table and speaking, hearing and seeing none. We'll bring it back to the Committee for any questions. Ms. McKenna.

Thank you. Mr. Chair, I have one question. You have. We admitted One word landfill on your payments. Where it says this payment however, admits though omit the word landfill which stipulates what types of payments may be excluded from gross income while including the landfill will define a qualifying payment. So if you could just.

Would you consider putting landfill in where you put Chiquita Canyon elevated temperature landfill event pavement so that you could specify what it is?

Yesaba. You want to respond to that? Yeah, we'll look at that. I want to make sure I understand the concern. We were trying to keep it also a little bit broad because there may be other relief funds. The county in the past has done programs that have benefited the community.

We don't the landfill has actually adding insult to injury, just ended the relief Fund, so they're no longer providing funds. So there may be other funds that are needed from other entities and we want to make sure that those are also excluded.

So I just want to make sure in any changes to the language that we protect that opportunity.

Thank you very much. Any additional questions? I have one. Have you began to have any discussions with the governor's office regarding a potential proclaiming the area a State of emergency?

Zero, have we? There's been a lot of discussions and multiple letters and sign ons by colleagues of these letters and discussions. And we what we have heard is that they're doing everything that they would as if it were an emergency and so nothing would change if an emergency were declared. We feel differently.

We have just seen the response to the fires in LA and what kind of rapid response and relief and support that that has brought. Not to discount the incredible multi agency response that has happened, both state, federal and local to the landfill. But the problem is the fire is growing.

It's possibly going into other cells, it's getting hotter, it's not getting better. Despite all of the work that has happened. It's an emergency and it's making people sick and folks don't have really enough relief to be able to keep themselves safe and healthy. So we continue to believe that a State of emergency is in order here.

It's the worst environmental health disaster in the western United States aside before I was saying that before the LA fires happened. So aside from the LA fires and it continues to be the only fire burning in La.

Thank you very much for that response. You may close.

You know, I appreciate your consideration today. We know that folks in our communities are already struggling so much with an affordability crisis. And so on top of that, people in our community are also struggling with the health impacts of this terrible disaster.

They should not financially be them further burdened and hurt because of the impacts of this burning landfill. And we don't believe that there will be. There's really a fiscal impact because this is not new income. It's a short period of time. It was all spent for the purpose that it was given to folks.

And it's not as if someone got a promotion and has higher income all of a sudden. This is. Nobody got to decide how much they got or for what. And we are hoping that the State of California will come to our community's aid in a time when they really need it. Thank you.

Thank you very much. This Bill is a suspense candidate. Thank you very much. And we appreciate your witnesses for showing up and we understand. Thank you very much.

Thank you.

Thank you.

Next we will have. Yeah. This Bill will be referred to the suspense file. Thank you. Next up, we have File item number two. AB258. Conley, would you please have a seat? And please, when ready, feel free to commence your presentation.

Good afternoon, chair and Members. I'm pleased to present AB258 today, which will increase the amount of funding for the California Fairs network in the governor's annual budget to 5% of gross receipts of taxable sales made on fairgrounds. Historically, fairgrounds have relied on funding from horse racing fees.

In 2009, the Legislature eliminated license fees for horse racing and instead provided an annual continuous appropriation of $32 million from the General Fund to support fares. Then in the 2011-12 state budget, that appropriation was eliminated to create a more stable funding source for fair fairgrounds.

The Legislature passed AB 1499 in 2017, which required three quarters of 1% of gross receipts from fairgrounds to be included in the governor's annual budget for fairs subject to legislative appropriation. Originally, AB 1499 was anticipated to get funding for fairs back to the $32 million level of 2011. Unfortunately, it now provides significantly less.

This year's budget includes an allocation of $4.7 million to split among the more than 70 fairs in the state. This is no longer sufficient to cover the growing needs of the fairs network as they face increased pressure to serve their communities in alternative capacities, most notably for emergency response.

California fairgrounds have been called into action more than 300 times in the last 10 years. As COVID 19 medical sites, staging for emergency equipment and for personnel and fire evacuations to help those displaced by wildfires and other natural disasters.

On average, 20 fairs are called into service every year to address emergency situations, including in the most recent Los Angeles fires. In order for fairgrounds to continue serving their communities and providing an important service to the state and to meet the original objectives of AB 1499, the change proposed in AB 258 is absolutely necessary.

AB 258 will simply provide funding closer to the $32 million once guaranteed to the Network Affairs. Importantly, the Legislature will still have final determination on whether that amount gets included in the state budget. So I want to conclude by also thanking California's Treasurer, the Honorable Fiona Ma, for co sponsoring AB258.

With me to testify in support of the Bill is Sarah Cummings, CEO of the Western Affairs Association, and Cliff Munson, Manager of the Ciskio Golden Fair. This Bill has no opposition. Again, thank you and when appropriate, I respectfully ask for an aye vote on AB258.

Thank you very much. You have two minutes. Please commence.

Chair Gipson, Vice Chair Ta and esteemed Members of the Assembly Revenue and Taxation Committee. My name is Cliff Munson and I serve as the Chair of the California Fair Alliance Legislative Committee and I'm the CEO of the Siskiyou Golden Fairgrounds in Yreka, California. I am here today to express strong support for Assembly Bill 258.

California's Network affairs is a vital cornerstone of our state's cultural and economic livestock landscape. We are the heart of our community, showcasing the best of California agriculture, fostering youth development through programs like 4H and FFA, providing affordable family entertainment and stand ready to serve our communities in times of crisis.

Just since I've been our Fair manager, we have served more than 2022 times as an emergency services location for our community. However, financial realities facing our fairs are increasingly challenging and AB258 offers a critical lifeline. The Network of California Fair's mission is to serve our communities in times of celebration and challenge. Challenging times as well.

The increased metric is needed to generate funds to reinvest in California State Fairgrounds infrastructure, educational programs and to ensure the continued viability of our fares. Assembly Bill 258 seeks to address this challenge by elevating support for our fairgrounds.

The increased funding mechanism will allow us to reinvest a more reasonable amount of vital resources back into our facilities and programs, ensuring that we can continue to provide the valuable services that the California families have come to rely on for the Siskiyou Golden Fair and for fairs across the state.

This legislation is not simply about the financial support, it's about ensuring our ability to serve our communities. We're not asking for a handout as our annual funding equates to a fraction of our operational budget. We're asking for increased support to reinvest in our facilities, programs and the future of California agriculture.

We urge the Members of Assembly Revenue and Taxation Committee Support Assembly Bill 258 and help ensure the continued success of the California Network affairs.

Thank you very much. Next witness. Two minutes please. Thank you.

Thank you. Chair Gibson and Members of the Committee. My name is Sarah Cummings. I'm the President and CE CEO of the Western Fairs Association. Thank you. The parent company to California Fairs Alliance. I'm here today to lend our full support of our organization to Assembly Bill 258 and to advocate for the network of California Fairs.

Western Fairs Association represents fairs across the western United States and Canada. And we understand the critical role these institutions play in their respective communities. In California. Our fairs are more than just annual events. They are economic engines, educational platforms, cultural touchstones and command centers, hospitals and evacuation centers in times of crisis.

They are the heart of our communities and a vital part of the fabric of our state. Assembly Bill 258 represents a crucial step towards ensuring the long term sustainability of California Fairs.

Current Funding the current funding metric is appreciated, but we have come to realize it does not meet the needs of the network of California Fairs and their ability to succeed as the stewards of the state's fairgrounds infrastructure and the fairs core mission of serving the public good. The Western Fairs Association recognizes the importance of fiscal responsibility.

We also believe it is essential to support the fair institutions that provide an invaluable service to our communities. AB258 strikes a balance between these priorities. Providing targeted support to the California Fairgrounds by way of revenues generated on those fairgrounds. We encourage you to recognize the vital role that California Fairgrounds play in our state.

By Supporting Assembly Bill 258 you will be investing in the future of our communities, our agricultural heritage and the well being of California fairgrounds. So again we respectfully ask for an increased percentage of the gross receipts metric with your support of AP258.

Thank you very much. Are there any additional people in the room wishing to speak in support of Assembly Bill 258? Would you please line up? Please state your name, your organization and your position. This is the support line.

Durazo Manning, on behalf of California State Treasurer Fiona Ma Proud, co sponsor of this Bill.

Thank you very much. Eric Will Rural County Representatives of California support. Thank you very much. Are there any primary witnesses in opposition to Assembly Bill 258? Would you please come forward? Hearing and seeing none. I'll bring it back to the Committee. Mr. Deo, you're up.

So we always have percentages, but let's get it. Basic math. How much are we talking about would be an increase from the General Fund budget if we adopt this increased percentage earmark for the fares?

Well, I mean, my understanding is it brings in about 4.7 million a year under the current formula, and it's anticipated to go up to about $32 million a year, which again is the target that was originally set for fairs.

So it's millions of dollars. In my view. It is an earmark, and I'm very leery of earmarks. Our fairgrounds are regional assets. There's no doubt about that. Many are very well run, some are not.

And I have significant concerns about supporting this Bill at a time when some of our fair boards have decided not to fulfilled their mission of running efficient venues for the taxpayer because these are taxpayer assets. But they're playing politics. The 22nd Agricultural District in San Diego County chose to turn away good business.

The crossroads of the west gun show and discriminated against second amendment supporters. That is illegal. It has not been challenged fully to the Supreme Court, but it would be as illegal as turning away a gay wedding. And I think a lot of my colleagues would never tolerate that.

It would never reward the fares with increased dollars for that. So if we saw some changes in policies, like a change at the 22nd Agricultural District, I might be more willing to put some money there. But they're turning away good business and they're doing so in a way that violates constitutional rights.

Thank you very much. Any other Committee Members wishing to speak on this? Mr. Conley, thank you very much for bringing this Bill forward at this time. You may close.

Thank you. And again, just to reiterate, more than ever, we are calling on our fares to shoulder an important burden in society, and that is to not only run efficient fairs, but to step up and really be the center of emergency response throughout our state.

This is a modest proposal that gets us back to where the original intent was in terms of funding fares. That has only become more urgent at this time. So with that, I respectfully ask for an aye vote.

Thank you very much, Mr. Conley, for Assemblymember Conley for bringing this Bill before us. AB258. This Bill will be referred to the suspense file. Thank you very much. Thank you. Item number three, AB330 Rogers, has been pulled. So we will move to item number four. AB 397 by Gonzalez.

Become the judge.

Welcome, Mr. Gonzalez. Thank you very much for the Again, this is item number four, AB397. And you may commence whenever you are ready.

Ready. All right. Good afternoon. First, I want to thank Chair Gibson and all the Committee Members and their staff for all of their work on AB397. As many of us here around the room know that too many Californians are struggling to make ends meet.

And as someone who grew up in Section 8 housing myself and grew up in rental assistance programs where you fear that something has broken and you tell the landlord for getting feared of getting kicked out with that, I've lived the experience of what it's like to grow up in poverty, often watching my mom as we celebrate International Women's Day, having to stretch even something as simple as food stamps.

Having this extra income can be a life saving for working families, putting food on the table, enabling families to pay medical bills, or allowing them to just simply pay their rent.

A study by the center on Budget and Policy found that 91% of people who get a Child Tax credit use it to pay for necessities such as food, clothing, housing, utilities and education. And as we know, families don't see these as luxuries. These are just simply bills.

Under current law, families lose access to the California Child Tax Credit when their child just turns only six years old. But we all know that the cost of raising a child does not end there. It only begins.

AB397 will gradually expand the Young Child Tax Credit, to be renamed the California Child Tax Credit over the course of four years. Specifically in 2025, families with children younger than 10 years old will qualify in 2026. Families with children younger than 13 years old will qualify in 2027.

Families with children younger than 16 years old will qualify in 2028. Families with children younger than 18 years old or 19 and 23 they're attending college will qualify. The Child Tax Credit is a proven tool to fight poverty and uplift families in a prosperous and equitable future.

And with potential federal cuts, as we all know, to safety net programs, now more than ever, California needs to step in and step up. Because as California goes, so goes the nation.

This afternoon with me to highlight the impacts of the Child Tax Credit and importance of AB397 are Alisa Anderson, the policy Director of the California Budget and Policy Center, and Sam Wilkinson, the senior policy associate of Grace and and Child Poverty California Uplifting A Community Member's Lived Experience.

Thank you very much. You have two minutes to please commence.

Good afternoon. Chair Gipson Members of the Committee. My name is Alyssa Anderson and I'm the Policy Director at the California Budget and Policy Center. We're a research and analysis nonprofit that works to expand opportunities and promote well being for all Californians, no matter their race, age, gender, zip code.

Refundable credits like the Child Tax Credit are proven policies for helping to achieve this vision Tax. Decades of research has found these credits not only lift families out of poverty, they're also linked to long term benefits for children, including better health and school achievement.

California's Young Child Tax Credit adds to these benefits for over 400,000 families with earnings below the poverty line. 60% of families who benefit from the Young Child tax credit make $20,000 or less a year. So this credit provides much needed support. It's enough to pay for almost three months of groceries for a mother and toddler.

It also lifts families out of deep poverty, which is especially harmful to children's development. The Young Child Tax Credit, together with the Cali ATC lifted 225,000 individuals out of deep poverty in 2023. But this credit is only available to families with children ages 0 to 5.

That leaves families with older children, about 60% of families with Low incomes ineligible for this support. The poverty fighting impact of this credit would be so much greater if all Low income families with children were eligible for it. This would help about 500,000 more families pay for the necessities that their children need.

Critically important right now, given California's worsening affordability crisis and persistent inflation. Expanding the Young Child Tax Credit would also make sure that families get consistent support from this credit as their children age. Right now, families lose access to this credit when their children turn.

But as you know, families continue to face many child related expenses when their children reach school age. Another important reason all Low income families need this credit is because most are excluded from the full federal child tax credit. Counterintuitively, the federal credit provides little to no support for the lowest income families.

It also excludes many immigrant families who face additional barriers to making ends meet. So extending California's credit to all Low income families with children would help to fill in these gaps in federal support. And this is especially important right now with Congress considering further restricting the federal Child tax credit and other vital supports for families.

So state leaders must prioritize policies that take California in a different direction. Fostering greater prosperity, not poverty. And this should include strengthening anti poverty tax credits so that more families with children have the resources they need to be healthy and thrive. Thank you.

Thank you very much. Next witness. Two minutes.

Thank you so much, Chair Gipson and Members of the Committee. My name is Sam Wilkinson. I'm a senior policy associate with Grace and in Child Poverty in California. And I'll be up testimony from one of our incredible advocates who has claimed the Young Child Tax Credit but was unfortunately unable to be with us today.

My name is Cody Van Felden and I'm a senior project associate with John Burton's Advocate for Youth. I started my journey as a youth advocate with JBay in 2020, advocating for foster youth and youth who have experienced homelessness like myself. Filing taxes had always been a scary thing and often is for foster youth.

I did not have the support network to show me the steps to file my taxes. It wasn't until my daughter was born that I filed my taxes and realized how life changing these credits are, especially the Young Child Tax Credit. My daughter is almost four years old and I fear that I am.

I fear the day I am no longer eligible for the yctc. This credit is critical in providing financial relief. If any of you have children, then you know providing for even one child is expensive. And for those of you that do have children, you also know that those expenses don't stop when the child turns 6.

Now, my daughter is not 6 years old or even a teenager yet, but I can already anticipate the increase in costs to ensure my daughter can thrive. For my household, this includes extracurricular activities like sports or dance, as my daughter loves staying active.

It also means family outings such as trips to the California State Fair, where families create lasting memories that children can look back on for years. Additionally, it involves providing her with the necessary food and clothes as she grows and needs proper nutrition, while constantly outgrowing her clothes that will need to be replaced throughout her childhood.

The YCTC has allowed me to better manage these costs and ensure that my daughter has what she needs to thrive in her early years. It gives me the breathing room to plan for the future and invest in her development. It gives me. zero, excuse me.

Whether that's through activities, healthy food, or the other necessary expenses that come with being a parent, without the yctc, it would be much more difficult for me to provide my daughter with the opportunities she deserves.

This credit is a lifeline for many parents like me, and I urge you to consider the impact it has not only for our families, but on the future of our children. Thank you.

Thank you very much. Any witnesses in the audience wishing to support this, please state your name, organization, and your position. This is for support only. You may commence thank you.

Rebecca Gonzalez with the Western center on. Law and Poverty and strong support.

Thank you very much.

Good afternoon. I'm Vanessa Orozco here on behalf of Golden State Opportunity Voices for Progress and the California Immigrant Policy center. And strong support. Thank you.

Thank you very much.

Good afternoon, Chairmember. Jonathan Munoz on behalf of First Five California in support, thank you very much.

Any witnesses in opposition, would you please come to the table? Hearing and seeing none. Anyone in the room wishing to speak in opposition, would you please line up? Hearing and seeing none. I want to bring it back to the Committee. Any questions from Committee Members, this is the time. Hearing and seeing none.

Let me just say to Member Gonzalez, certainly appreciate this Bill. I absolutely appreciate the testimony that you read on behalf of the witness that couldn't be here. It's a terrible time that we're in both as a state and I think our country and looking at potentially resources being lost or not directed towards this area.

But I want to commend you on your efforts in this space. Certainly appreciate it. With that being said, this item is. zero, I'm sorry, please remember, please close.

I'll second that in terms of that piece, but no. Thank you, Mr. Chair. Thank you to Committee Members for having this conversation and continuing this dialogue.

Look, on a personal note of personal privilege, I remember my mom working well over 12 hour days and myself having to cash cans and newspapers and so much to to help to make the ends meet. When my brother passed away when I was 10 years old, he was 18.

Suddenly anything I did benefit from was completely taken off the table and tax credits were just out the window because having one child at home meant you didn't necessarily qualify if you had 23 or four. So with that, you know, AB397 will provide relief to communities facing the same hardships I experienced firsthand.

And as the gentleman before me in the other Bill had said, we're not looking for a hand up, handout, we're looking for a hand up. And that's what this Bill provides. And so I respectfully ask for your I vote because no family deserves to grow up in poverty. Thank you.

Thank you very much. This Bill would be referred to our suspense filed. So thank you very much and thank your witnesses for coming to this Committee.

Thank you.

We can. zero, that's what I'm just going to do right now.

Just one moment. I'm going to ask our Clerk Ms. Our Committee Clerk, Ms. Hyland to please open a roll to absent Members to add on and then we will take the next presenter on AB418.

Baines. Baines. Aye. Okay, we're done.

Thank you very much. File item number 5. AB 398 errands. Please approach and have a seat. Any of your witnesses can also feel free to come up and have a seat.

Does she want to add on to the Committee rules? Adding on to the Committee rules, Baines. Aye.

Thank you very much. Ms. Aarons, you may proceed.

Thank you so much. Chair and Members, hello. This is my very first bill and very first Committee that I'm presenting to, so please go easy. AB398 will establish a minimum refundable benefit of $300 for the California Earned Income Tax Credit.

As of right now, benefits to California tax filers earning less than $31,950 would be eligible for this credit. Right now, the minimum Cal EITC benefit is $1. 81% of all Cal EITC eligible tax filers receive less than $300. Speaker Rivas challenged us to focus on affordability and policy and help working Californians.

And that's exactly what this Bill does. Making AB398 law guaranteeing eligible Californians a minimum of $300 for this benefit will help working Californians better afford the rising cost of living by putting more tax money back into their pockets that help build California's economy.

AB398 is sponsored by the California Prosper Coalition, including Golden State Opportunity Grace and Child Poverty California and United Ways of California. I have. Can I introduce my witnesses now, please? Okay, so I have two amazing witnesses to testify in support of this Bill.

I would like to introduce our first expert witness, Adro Okoro, Senior Counsel of Public Policy for United Way California Capital Region, and Danielle Bautista, Director of Public Policy for United Ways of California, who uplift a community member's lived experience.

Thank you very much and welcome. You have two minutes each. Whoever wants to go first, please.

Sure, I'll hop in.

If you can move the microphone close to you. Thank you. Thank you very much.

Hello, Chair Gipson and Members. As mentioned, my name is Adriel Okoro. I am the Senior Counsel of Public Policy and Advocacy for United Way California Capital Region. I'm here today on behalf of California Capital Region as a proud sponsor of Prosper California Coalition Member in strong support of AB398 by Assemblymember Aarons.

For over 100 years, United Way California Capital Region has been mobilizing people to action so that all can thrive. In the past five years, we have completed over 22,000 tax filings within our five county region. This includes Amador, El Dorado, Placer, Sacramento and Yolo counties. This has resulted in over $33.2 million in refunds.

These dollars are reinvested back in our local California economy and help our working class families meet their basic needs. Just last tax season in partnership with community based organizations just locally we assisted nearly 800 families bring in over $190,000 in just California Earned Income Tax Credit Refunds.

As Members of this Committee, we are all aware the California Earned Income Tax Credit has been successfully delivering cash to households via tax refunds for the past 10 years. Establishing a Cal EITC minimum of at least $300 would provide a meaningful credit for claimants, make it worth to file and ease Franchise Tax Board and Administration.

According to the California Budget Policy Center, about half of tax filers without children in the home receive Cal EITC of less than 100 with a minimum credit of $1.

The Budget center also estimates that nearly all Cal EITC recipients 88% got less than 300 from tax credits in year 2021 with 79% getting less than $200 and 43% getting less than $100. More than 100,000 families with children receive a Cal EITC of less than $100.

According to the California Budget and Policy Center study in Chair Gipson's district, over 63,000 LA County households received over 14.5 million in their tax refunds through Cal EITC in tax year 2021.

According to that same study for the entire Assembly Revenue and Taxation Committee that totals nearly 377,000 households receiving over 77.8 million in their tax refunds through Cal EITC for tax year 2021. When fully implemented, this Bill would impact 2.5 million Low wage childless workers and 445,000 filers with dependents that currently receive less than $255.

We have seen over the last decade how the Cal EITC uplifts California families and households and we look forward to the tax credit's continued success at delivering cash to households. On behalf of United Way California Capital Region and the Prosper California Coalition, we ask that you please support AB398 and thank you.

Thank you very much. Next witness.

Thank you. Hi Good afternoon Chair Gipson and some of the Reverend Techs Chair Committee. Thank you. My name is Danielle Bautista and I'm the Policy Director at United Ways of California and we are here on behalf of the Prosper California Coalition as a co lead also in strong support of AB398 by 7 Member Aarons.

I'll be reading testimony from Yvonne Sonata Vega, a wonderful community Member who is unable to be here today about her experience with tax credits like the Cal eitc. Yvonne is a mother of five, a health care professional and a United Ways of California ambassador and a longtime user of AVIDA or volunteer Income Tax Assistance Services.

To quote Yvonne I'm a mother of five and I'm very family oriented. Our family does everything together, go to church on Sundays, watch movies, go out to eat and go to the store together. I think the only time we're not together is when I go to work. I want my kids to be happy.

I want them to reach their goals. I want them to know that they're not alone in this world and that we're always going to be there for them. That's what drives me as a mom.

In addition to loving spending time with my family, I also love giving back to my community and love to help out in any ways that I can. I think it's important to help our communities learn about tax filing process and about tax credits like the Cali ITC.

In 2017, my brother told me to call 211 and make an appointment with VITA for free tax prep. My response? There's no such thing as free tax help. But he told me that he had been using VITA for years. So I made the call and I've been using VITA through United Way of the Wine country ever since.

United Way's VITA volunteers helped me submit an amendment so I could get an even bigger refund for a previous year. That extra money really helped me, especially because we were living paycheck to paycheck at the time and helping out our parents in addition to supporting our own young family.

We were even able to put aside some of that money to save for the future. California right now is just so expensive and I think the biggest challenge that I've seen in our community has been the cost of living. Rent, housing. It's hard, especially with gas and groceries prices going up even with two incomes.

Living in California is so expensive and I always look for ways to save. VITA helped me save hundreds of dollars. I would have had to pay someone to do my taxes and they also help me ensure I get all available tax credits like the Cali ITC and maximize my tax refund every year.

That money can be used on so many important things to help my family. On behalf of United Ways of California and the Prosper California Coalition, we ask that you please support AB398 to increase the Cal EITC minimum to 300 and make the credit even more meaningful for families. Thank you.

Thank you very much. Appreciate your comments. Next, if there's anyone in the room wishing to add on and support, please come to the microphone. Your name, your organization and support.

Rebecca Gonzalez, Western center on Law and. Poverty, also in strong support of this bill.

Thank you.

Vanessa Orozco, on behalf of Golden State. Opportunity Voices for Progress in the California Immigrant and Policy center. And strong support. Thank you.

Thank you.

Hi, Sam Wilkinson with Grace and Child Poverty in California and the Friends Committee on Legislation of California and strong support. Thank you.

Thank you very much. Primary witnesses in opposition, Would you please come to seeing and hearing None. Anyone wishing to speak in the audience in opposition to Assembly Bill398, please come to the microphone. Hearing and seeing none. We'll bring it back to the Committee. Any questions? Mr. DeMaio.

So your Bill will establish a minimum.

$300 payment tax credit for anyone making under $31,950. Right.

Have we calculated what the cost to the. The General Fund for that will be.

Deferred to my witnesses letting you know.

I believe it's 225 million for the first year of implementation.

225 million. So almost a quarter $1.0 billion. There's no doubt people are struggling, but I see almost a scam going on here in the Capitol. And let me explain the scam because I think people back home get it. The politicians raise our cost of living dramatically, exponentially through bad policies.

And then they turn around and say, well, we really care about you. We're going to give you relief. As though we should be thankful when in fact they raised our cost of living in the first place. I looked up the organizations that came up here today, your coalition.

None of you opposed the gas tax or car tax increase. In fact, you supported it. Many of your organizations did. A $2 differential per gallon of gas for a working family driving the average of 15,000 miles on one car. Just one car. Most of our working families have two earners.

That's $1,500 that we could have saved them versus the $300 credit. Or in the City of San Diego right now, our homeowners are being told they have to pay $58 a month in a garbage tax. Yeah, yeah, they're inventing garbage taxes in San Diego. Don't want the word to get out because it might spread.

That's 700 bucks a year. And that is, you know, the garbage tax, the gas premium, the gas price spike. That doesn't look to your income that doesn't say hey can you afford the $2 extra per gallon versus the national average that we now have.

And so I have real challenge saying that this is how we should be dealing with the pain that many of our working families that are struggling are feeling versus fixing the problem for all.

I also want to put on record for this bill and the previous bill that there is no language in your bill that would limit undocumented or illegal immigrants from claiming the credit. Is that correct? So this quarter $1.0 billion, a portion of that under your bill with no limitation can go to illegal immigrants.

Well, thank you for that question, Mr. Bile. I just want to also clarify that this Bill has received strong bipartisan support.

And at the end of the day, regardless of where people are on other issues that you highlighted, this puts money back into hard working taxpayers pockets, which is what we all know is going to help alleviate a lot of people who are working poor in California.

But to my question, the Bill does not limit the ability of an illegal immigrant to get a portion of the quarter $1.0 billion.

What it does is it provides tax relief for taxpayers regardless of their status. Many undocumented Californians are hardworking taxpayers. They're paying millions of dollars into our system helping benefit all Californians. This Bill puts money back into people's pockets.

That's why we have so many conservatives, so many independents, so many Republicans, so many Democrats supporting this Bill because it gives their money back away from the government and gets them back into their pockets.

I'm just suggesting we shouldn't be taking the money in the first place and then claiming that we're being generous by giving a percentage, a small portion back.

Thank you Mr. Meyer. No one's claiming anyone being generous. This is putting money hard earned taxpayer dollars back in people's pockets.

Thank you very much. Chair recognizes Chair Quirk-Silva and then Ms. McKinnor.

I'm trying to understand my colleague's comments here and I think there's always arguments that can be made for any issue for or against. I certainly appreciate bringing up how much an item would cost. I think that's really important for us to understand that.

But I certainly would suggest that when we talk about putting money back in working folks pockets, whether it's this tax credit or others, we certainly need to look at what's happening right now at the Federal Government. When we were talking about our prices for groceries, we're supposed to diminish as of January 20th.

We're also talking about important consumer goods that we know that working families need. For example, A car. If you're going to go to work, you need a car. If you're going to go to work, you need to pay for gas. That is quite expensive.

But if we are now going to have a tariff war between some of our trading partners, Canada and Mexico, that's certainly going to take money out of our working families. And this argument about undocumented from my colleague is actually becoming every single argument. You bring this undocumented into it illegal.

And if you want to call them illegal aliens, if you want to call them undocumented, they are workers in California who bring billions of dollars into our economy. And the California economy is the fifth economy in the world because of the hard labor that none of us in this room is willing to do.

And I will keep saying this all day long for your fan base. If your fan base wants to get up and go up to the farm fields in Central California, get up at 4 in the morning and work, I doubt that some of them could even last two hours in those farm fields.

They want to wash dishes in the back restaurants, go ahead. There is no line for those jobs. If they want to make beds in our tourism hotels all across California, go ahead. There isn't lines. So I am tired of being in a hostile environment with this rhetoric every day.

And this is going to be a very long year to have to hear about Californians that are hardworking every day and to be called the names that your fan base goes. And I guess I'll be profiled next on your show.

Okay, thank you very much, Ms. McKenna.

Thank you, Mr. Chair. I would just like to commend the author on this Bill. I see that you're listening to our community loud and clear. And our community has sent a message to us saying that they want affordability, they want us to help them with their. In their pockets. They want to hit.

Want us to hit them in their pockets. And this does just that. When we think about what's happening across California with the high rents, the high price of food, our families need this. This Bill protects our children and it gives parents dignity.

And so I'm asking to be a co author on this Bill and I commend you for the work you done here. Thank you.

Thank you very much. Hearing no further comments from the, from the diets, the Committee, let me just simply say that I think this Bill, first of all, I'm a fan of the Vita.

We just did Vita in my district over the weekend and a lot of people got there who were eligible for the Earned Income Tax Credit, got The Earned Income Tax Credit. We know that these resources is economic boost to our communities on a local level, but also for people who are struggling.

And also we can go back three years and to get a nice check after three years of being eligible. But not having the Earned Income Tax Credit on your taxes, it's a welcome addition to extra money that people actually need. When we talk about affordability is very, very expensive. When eggs, a carton of eggs over $10.

We need to address not only that, but also make sure that people who are hit the hardest, who can't afford it are taken care of the most vulnerable among us. So let me pause here and see if Assemblymember Aaron would like to close on Assembly Bill398.

Thank you so much, Chair Gipson and Members. The rent is too damn high. And that's why I'm respectfully requesting an I vote for AB 398.

Thank you very much. This Bill will be referred to our suspense file. We thank you very much for your presentation and also your witnesses. Thank you very much.

Thank you.

And while Mr. T is going down, we will open the roll on the Committee Roll for absent Members. Madam Secretary, please call the roll for absent Members.

McKinnor. McKinnor. Proposed rules. Proposed rules.

No, you're adding on.

It's okay.

McKinninor notes. Yeah. Mr. Tall, our Vice Chair. File item number seven AB231. Thank you very much to our Vice Chair. You may commence when ready on Assembly Bill 231.

Good afternoon chair and Committee Members. I'm here to present AB 231, a bipartisan Bill to help formerly incarcerated individual secure employment within the year of their release. Eliza, thanks the chair for supporting this Bill as a principal co author. Really appreciate that.

According to California Department of Correction and rehabilitation, over 60% of formerly incarcerated people are unemployed a year after release. Without work, they struggle to support themselves and their family and many turn back to crime. This leads to a 60% reoffending rate within three years.

However, it is a key employment and the chance of reoffending drop significantly from 60% to just 16%. It's crucial to help these people find work as they pay their debt to society and deserve second chance. Under the Fair Chance act, employers with five or more employees cannot ask about conviction history during the hiring process.

Micro businesses with fewer than five employees are exempt. But they are struggling in California economy. These businesses make up nearly 90% of private businesses and 40% of the workforce. Small business owner observe or put potential risk into themselves when running their businesses.

AB231 offer a 5,000 tax credit to micro businesses at hire formally in incarcerated person within the year of release providing that person is employed for at least six months. This allow ample opportunity for an employee to grow their work.

This builds support both micro businesses and public safety by reducing recidivism while also allowing for redemption for people who really want a chance at a new life. This bill mere a provision in federal law, something that California should take a lead in.

AB 231 is a compassionate measure that is a win win for society formerly incarcerated people and small businesses. I'm honored to present a Bill alongside with Katie Dixon who successfully reinterated into society after in castoration and Bianca Blomkas from small business majority who understand the vital role small businesses play in our state.

Thank you very much to our witnesses. We have two minutes each and you may proceed when ready. You can move the microphone closer to you.

Alrighty. Good afternoon. Thank you so much for allowing me to speak on this important proposal again this afternoon. My name is Katie Dixon. I'm a formerly incarcerated person. I've served 10 years throughout California's penal system and I have been free from prisons and jails for 10 years.

I am not here today in my professional capacity as a policy expert. I am here today as an individual. AB231 is a much needed work opportunity tax credit for small business owners employing less than five people that takes a chance on hiring formerly incarcerated folks like myself.

Small businesses are often on the front lines of hiring formerly incarcerated people for various reasons and for those. That's why AB231 makes sense to me. When I came home from the Delancey Street Foundation in 2014, I was homeless, broke and desperate for a job.

My first full time opportunity came from a small startup named Social Imprints and they are currently thriving today. Additionally, many formerly incarcerated people turn to entrepreneurship because of the legal barriers to employment. And so this Bill also speaks to the importance of that as well.

Let's acknowledge these small business owners decision to give someone like me that fair chance. I spent two years working on our fair chance laws here in the State of California. And during that time it became real obvious that small business owners are exempt from many of those fair chance policies.

And that leaves them with a decision to make on the front end to hire or not to hire. And for those reasons, that's why I'm here today in my personal capacity. AB231 will help that small business owner with that critical decision to hire or not to hire. This Bill to me is a breath of Fresh Air.

It encourages small business owners to hire from the second chance, the second chance talent sector, and incentivizes them to do so. It in turn opens another employment opportunity for people in their reentry journey and it rounds itself out by really just reinforcing our collective efforts to strengthen strengthen our workforce here in California.

For those reasons, I'm excited to be here and I appreciate the two minutes to highlight this solution and I thank Assemblymember Treeta for being dedicated to this.

Thank you. And thank you very much for your story and also for being here as well. Thank you. Next witness. Two minutes please.

Thank you so much. Thank you. Chairman Gipson, Vice Chair Ta Members of the Committee Small Business Majority supports AB231 because it provides a competitive advantage for small business owners as a meaningful legislative change that addresses ongoing workforce challenges and as our research shows, is supported by small business owners. My name is Bianca Blomquist.

I'm the California Director for Small Business Majority. We're a national nonprofit organization with a network of over 85,000 small business owners. Two thirds of our network are women entrepreneurs. Two thirds of our network are business owners of color. We are working to build a thriving and equitable economy. Specifically for these small business owners.

We also conduct extensive research that focuses on the smallest businesses facing systemic inequities and structural barriers to entrepreneurship. The Fair Chance act from 2018 generally allows employers with five or more employees to ask a job to ask a job candidate about conviction history only after making a job offer.

The AB 231 the Second Chance act applies to employers with five fewer than five employees, also called micro businesses, and would grant a tax credit of up to $5,000 to those micro businesses who hire a formerly incarcerated person.

Small businesses employ nearly half of America's private sector workforce and employ approximately one in three California workers, an overwhelming majority being women and people of color, opening a powerful role for small employers to play in addressing the labor shortage and reducing the harms of mass incarceration while allowing communities to flourish.

Employers who hire justice impacted workers report that their quality of work and contributions are on par with or better than other employees and turnover rates are notably fewer lower. Excuse me.

This is why a robust 84% of respondents to our survey agree that policies like AB231 will open up a pool of job applicants that deserve a second chance. Notably, only 16% of small business owners disagree with the sentiment.

Compared to medium and large sized businesses, small business owners often struggle to find dedicated staff while providing a competitive wage. One measure to gives small businesses an edge is this tax credit. Therefore, fiscal incentives like AB 231 will provide a competitive advantage to small business owners, create wealth and combat job insecurity in their communities.

The Second Chance act is a common sense approach to assist small business owners and the employees who work for them. For those reasons, we support AB231. Happy to answer any questions. Thank you.

Thank you very much. Want to invite the audience. If there's anyone wishing to speak in support of this Bill, would you please line up? Seeing and hearing none. Primary witnesses in opposition to Assembly Bill 231. Hearing and seeing none. Want to bring it back to the Committee, Mr. Deo, please.

So I'm not traditionally a fan of tax credits, but this one is very focused on, I think, a good public benefit, an outcome of helping people who want to get a second chance turn their lives around. And by the way, I do appreciate your personal story and your testimony and congratulations to you.

The small business focus is really attractive in this Bill. The question I have though is how much estimated do we think this would cost? The General Fund do we have. I know it's hard to model and predict. You don't know until they actually apply for it.

Sure. I think it was less than $300. I don't have. Do you have the actual number in front of you? 230.

I think that I, I have a number here. I think that it's going to cost. So we're talking 100150,006. Yes. 100 to 350,000. 2,000. Yes.

Yes. And that's again an estimate based upon how many small businesses may be aware of the program, might participate?

Yes.

The only other question I have is there are state laws, as you referenced, against asking an applicant about their status. Are we concerned that this may raise any legal liabilities for small businesses by asking the question, knowing that they want to incorporate the response into their budgeting for a position?

Yeah, that's a great question. I'm not sure how this would intersect with the employment law obligations of those businesses when they're hiring, but I would imagine that the information that they would use to obtain the tax credit would be an appropriate use of that.

Yeah, Please, through the chair will just give me one moment. I think that there is an exemption for five or less employees. So the chair recognizes the witness. Do you want to respond to Mr. Deo's question?

I was going to point that out. So they are currently exempt so they can ask already the applicant on the front end. So they would already have that Information when applying for the credit. Yeah. They already have the ability to.

And do we have. I know that we have a similar program in terms of grants. Do we. Is there an intent to study the, the efficacy of the program if we're going to put this in place? Recidivism or success? Continued employment. Because I know that you have a sunset. I love the fact there's a sunset here.

But I'm, I'm presuming that the sunset is the action forcing mechanism to make sure we're getting good results from the tax credit.

I think you're right. Yep. Thank you. Thank you very much. zero, Ms. McKenna, please, I apologize.

Thank you, Mr. Chair. Well, I'm glad to see you bring this Bill forward, Mr. Ty.

You know, Assemblymember Ty, after last year's round of lock em up, what I call lock em up, Bang Bang bills where we were going back towards mass incarceration, this is good to see that, that my friends across the aisle are looking at justice.

So as we do smart justice and initiate justice this year, I'm glad to see that maybe across the aisle that my friends will come along with us as we fight for people previously impacted system impacted people. And I'm hoping that these small businesses. Also are going to pay these folks. A fair wage because that's very important.

Fair wages and insurance. Make sure that they have medical insurance. That's also extremely important. But I am just, I'm glad to see that my colleagues across the aisle will maybe this year work on justice. Thank you.

Really appreciate that comment. And I'm really patient and really, really committed in. Yeah. Into dispute.

Thank you. Thank you very much. Assemblywoman McKinner. Next. Mr. Vice Chair. Ta. You may close.

Yes. I really appreciate the leadership from the chair. And then I want to thank all the Committee staff for their support and asking for an I vote.

Thank you.

Thank you. Thank you very much. This Bill will be referred to the suspense file. But I also want to say that I think this is good policy moving in the right direction. And thank you very much for one authoring this Bill and will let it go through the process through the suspense file. So thank you very much.

Thank you. It's referred to the suspense file. Thank you. Yep. Appreciate it. Okay. Having completed all business on the our agenda, the Committee is adjourned. We don't need to add anybody else. Everybody is. No, everybody's good. It.