Assembly Standing Committee on Revenue and Taxation

I want to say good afternoon and welcome to the second regular hearing on the Assembly Committee on Revenue and Taxation for 2025-2026 legislative session. Advocates, please remember to submit a position letter through the committee's portal at least one week prior to the hearing in order for your organizational positions can reflect in the bill analysis, so please adhere to that.

I also want to remind everyone that pursuant to the committee's rules adopted, at our first hearing, we will--and we will have reinstituted the Suspense File. Bills with fiscal impact of plus or minus $150,000 will not be eligible for vote immediately after their presentation, and instead, we will be referring it to the Suspense File. This will enable the committee to holistically consider proposals before us and to better prioritize policy changes.

Accordingly, every bill on today's agenda will be referred to the Suspense File. It looks like we have a quorum. Madam Secretary Highland, can you please call the committee roll?

[Roll Call]. We have a quorum.

A quorum has been established. I understand that the first item on the agenda is AB 429: Hadwick, who has allowed Mr. Ramos to go before her, and so we'll be hearing Assembly Bill 53 by Mr. Ramos. Mr. Ramos, would you please come and have your primary witnesses join you? Welcome, Mr. Ramos, and when you are ready, please proceed with your presentation on Assembly Bill 53.

Thank you, Mr. Chairman and members. Today, AB 53 would provide a state tax exemption of up to $20,000 for military retirees recipients of the Survivor Benefits Program under the Military Service Retirement and Surviving Spouse Benefits Payment Act.

The purpose of this bill is twofold: to honor those who have dedicated their life by serving our country, as well as retaining and attracting a skilled workforce and honoring the families of military retirees and survivors and the benefits that go to them. Currently, California is the only state that taxes the full amount of the retirement of our military personnel.

Let's make 2025 the year we change this and honor our veterans and their families. With me today to testify in support is Retired United States Air Force Captain Ramona Chávez. She is President of the Military Officers of America, California Council of Chapters, and Josh Baker, President of the California Enlisted Association of the National Guard of the United States.

Thank you very much and welcome. You have two minutes each, so please commence when ready.

Thank you very much. Good afternoon. I am Captain Ramona Chávez. I served in the U.S. Air Force, the California Air National Guard, and the U.S. Air Force Reserves. And I'm also the President of the California Military Officers Association of America.

First, I would like to thank Assemblyman Ramos for keeping us alive and pushing Assembly Bill 53 to benefit our veterans, and thank you, Assemblyman Gipson and the committee for having us here today. As Assemblyman Ramos mentioned, currently, California is the only state that fully taxes military retirement pay.

I have two simple questions: is that how we want to represent California and what does it cost our state? California is losing veterans to other states at a very high rate. Since 2000, our population of military retirees dropped 27%.

I'm sorry. Please--if you could please close that back door, the noise--thank you very much.

Thank you.

Thank you.

Is that better? Since 2000, our population of military retirees dropped 27% when the U.S. saw an increase of 17%. Meanwhile, states like Texas, Florida, Virginia, and North Carolina are growing their veteran population. People make decisions where to live. Cost is a big factor and California is seeing the results of that. Losing veterans costs California.

The states that are gaining veterans have developed strategies to target and attract veterans. They recognize the people are power. I am honored to have served 23 years. I know firsthand the caliber and commitment of our uniformed services. Knowing that those who serve represent only 1% of the American population, many of you may not know the value our veterans community brings to this country and to this state, nor the challenges.

You may recognize the service member as you see them advertised on TV in a cockpit or marching in line, or if you're an Altadena or Palisades resident, you may know them as crews that responded to the call of duty, to the safety of homes and families in a moment's notice. We have active duty, National Guard, and reservists leave the military after serving 20 years, and like myself, want to call home.

These are skilled professionals that go on to earn an income from their second careers much higher than what they earned in the military. Alongside my career, I had careers with AT&T, Cisco, Informatica, and Twilio. These companies bring billions of dollars to our economy.

I am a tiny sampling of the veterans that bring value to our economy and service to our communities. California is home to more than 140,000 military retirees. These second incomes of 40-year-old men and women average at $134,000 a year. That equates to more than $18 billion in taxable income. Outside of their dollars--

If you can conclude your thought?

Pardon me?

Your time is expired. You can conclude your thought.

Okay, I will.

Thank you.

I just want to say that many are highly educated and bring value to this state. AB 53 gives us an opportunity to course correct and to attract and retain veterans in California. Revenue loss from ending taxation pales in comparison to the billions of dollars that we bring.

We are heartened that Governor has put the military retirement tax in his fiscal 25-26 budget. This is not a handout, but a wise tool to retain veterans who served at least 20 years to this country and continue to bring value to our communities. For our so deserving military retirees, for our surviving spouses, for our California, please support AB 53.

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

Good afternoon. My name is Josh Baker, and I represent the California Enlisted Association of the National Guard. So I represent your state's National Guard, your home team when it comes to your military folks, and with my unique ability of still serving in uniform, I have the ability to not--not only to interact with our state's National Guardsmen, but to also with our active duty counterparts that are stationed throughout the State of California.

And inevitably, when we start talking about retirement, kind of the running joke is: 'okay, great, what state are you going to retire to?' Because everybody knows that serves in uniform, you can go to any other state and have a better retirement benefit, and that's highlighted in this Army Echoes Magazine and that's catered to soldiers that are on the precipice of retiring or they're already retired. And every year they run an article highlighting the different state benefits for all the different states, and this year, they did a little color-coded map. California in red--no benefit to retirees.

And that really hit home for me with my brother. About two years ago, he retired, Sergeant First Class Retired Joe Baker. Luckily enough, I guess you can say, stationed at Fort Irwin at his last duty assignment just outside of Barstow, California, 45 minutes away from where him and I grew up, 45 minutes away from mom and dad, grandma, grandpa, babysitters, and the last two years that he was there, had the opportunity to go to family functions that he wasn't able to go to because he was stationed around the globe.

But when he got his 20-year-letter, had a conversation with him and his wife on where to retire and California wasn't in that conversation because any other state has a retirement benefit and his retirement dollar can go that much further. And so not only did we lose out on a skilled aircraft mechanic that could have stayed in California, but we also have to remember the spouses that serve with our military members.

So we lost out on a skilled mental health professional. So my brother got to retire at 38 years old and this is very typical of our military retirees. So if this bill were to pass, that we have the retainability tool that we can keep and attract skilled military veterans and their spouses in California, have them join a second career, but it's not only that, that they'll be a part of our community and there are a, just a wealth of information that are going to be in our community. Pending any questions. I thank you for your time. I thank you for your service to your constituents. Thank you.

Thank you very much for your testimony. Now, for those in the audience, if you want to add on in support, we ask you that you could please line up and, again, just your name, your organization, and your position on the bill. And this is support.

Good afternoon, Mr. Chair, members of this board. My name is Don Harper. I'm with the American Legion of California. We have over 125,000 members in the State of California. Please support this bill. It's a good bill. Thank you.

Thank you. Next witness.

I am Fred Jaffin. I'm a retired naval officer, 28 years of active duty service, many assignments here in the State of California, including Vallejo. I fully support this bill and I am a member also of a veteran organization such as the Alameda County Veterans Affairs Commission of which I've been appointed to, and I support this bill and various other military organizations that I represent. Thank you.

Thank you for your support. Next witness.

Hello, Committee. My name is Paul Gonzales, and I'm a retired army lieutenant colonel. I served 25 years regular army. My last assignment, I entered the service out of UC Berkeley as a cadet. My last assignment was as a professor of military science in charge of Army ROTC at UC Berkeley. I retired in 2005.

I want to make this personal because I really think that this is important that your committee understands the impact. I'm also the president of the Military Officers Association of Alameda County. We are having a hell of a time getting people to stay and recruit them for board positions and membership because they're aging out. Average age is 84, and we have no new members because nobody's retiring in California--in Bay Area. It's a real problem. So I've convinced my daughter who went to medical school at UCSF--

If you could give your name, your organization, and support?

All right. Thank you. Anyways, I support it. I hope that the committee helps this bill pass. Thank you.

Thank you.

My name is Susan Gonzales, and I'm a member of the Alameda MOAA Chapter. I'm the surviving spouse liaison, and I fully support this bill.

Thank you very much.

Good afternoon, Chair and members. Yolanda Benson, representing the California Association of County Veterans Services Officers, and we strongly support this bill and are glad to be co-sponsors. Thank you.

Thank you. Next witness.

Good afternoon. My name is Helen Wong. I am the AMVETS Department Commander and we support this bill, but keep in mind we also are dual members American Legion, Vietnam Veterans of America, DAV. Thank you.

Thank you.

Clifton Wilson, on behalf of the Humboldt County Board of Supervisors, in support, and thank you for authoring this measure.

Thank you.

Durazo Manning, on behalf of California State Treasurer Fiona Ma, proud co-sponsor of this bill.

Thank you.

Steve Ansel. I'm from Solano MOAA Chapter. I was also a contractor that hired 51 retirees. I lost 12 in three years. All went to tax exempt states. There are now actually 11 tax exempt states with Georgia having a current bill to make it ten. Very much appreciate this first step that we're taking. Thank you.

Thank you. Next witness, please.

Kasha Hunt, here with Nossaman, on behalf of the County of Monterey Board of Supervisors, in support.

Thank you.

Good afternoon, Chair and members. My name is Seth Reeb with Reeb Government Relations. I'm an army infantry combat veteran here with Reeb Government Relations, on behalf of the California State Commander's Veterans Council, Military Officers Association of America, California Council of Chapters, and the Vietnam Veterans California State Council, all in support. Thank you.

Thank you.

Good afternoon. My name is Peter Cross. I'm the President of the National Guard Association of California, and I can't add to the wonderful testimony of these witnesses. We are in strong support of AB 53. Thank you.

Thank you for your testimony.

Good afternoon. My name is Raymond Wetzel. I'm the Senior Vice Commander for the Department of California for the Military Order of the Purple Heart; 4,100 members strong, and we all approve this. Thank you.

Thank you.

Kelly LaRue with Resilient Advocacy, on behalf of the California Chamber of Commerce. Apologize. We just finalized our positions last week, so our letter is coming. Thank you.

Thank you.

I'm Mike Schoonover. I live in Oakland, California. I'm the proud military spouse and I fully support this bill and appreciate your attention to it.

Thank you. Thank you very much. Now we will have opposition. Two primary witnesses in opposition. Seeing and hearing none, anyone in the audience wishing to register your opposition to Assembly Bill 53, would you please come forward to the microphone? Seeing and hearing none.

Before I bring it to the committee, I want to say for those who've testified, those who served our country, we honor you and thank you very much for your service. We'll bring it back to the committee. Our Vice Chair, Mr. Ta.

Thank you, Chair. I really want to thank the author for introducing this bill. Really, really appreciate that. I am really proud to be a co-author of the bill. I think that this bill really makes California more affordable for our veterans and I think this is the least that we can do for our veterans who been sacrificed so much to protect our community and our nation. So I really, really appreciate that. Thank you.

Thank you so much. Thank you very much. Any at additional comments? Yes, Ms. McKinnor.

Yes, Mr. Chair and Assembly Member. I, I too really appreciate this bill. I have veterans in my family and I know how they--it's hard, so hard for them, especially in this economy. So I really, really appreciate it, and I don't know if I can be a joint author. Yes.

Ms. Quirk-Silva.

I'll weigh in on the support. We actually heard this in the Budget Sub Five Committee, and this is not only important to the veteran community, but it's important to the California community, as was noted that many of these retirees are 38, 40 years old and they're going to go on to other professions and other types of investments in California. So I'm very pleased to see it as part of our budget item. I think we could even go further, but I know that you have tried a few times.

So we're going to get it across the finish line and see how we can invest even more because if you know any military men or women, you know how disciplined they are, how well-trained they are, and that's the type of workforce we need in California.

Thank you. Thank you very much. Seeing no further witnesses on the dais wishing to speak regarding Assembly Bill 53, I just want to say to the Member Ramos, the author of Assembly Bill 53, certainly I think this is a great bill and thank you very much. I understand you've tried it before and appreciate your perseverance. So want to give an opportunity for you to close.

Well, thank you, Mr. Chair, and thank you to the members and happily to have you join on in the co-authorship of this bill. I also want to thank the sponsors and supporters and all the military members who have been advocating for years for us to get even to this point that we're at now.

It's not about the member. It's about the people that have served our country and the families and the survivors, and those benefits should have some type of exemption in the State of California. With that, I ask for your aye vote.

Thank you very much to the author. This bill is--will be referred to our Suspense File, and thank you very much for your for the presentation and to all your witnesses and those came out in support. Thank you very much.

Thank you.

Next, File Item Number One: AB 429: Ms. Hadwick. Member Hadwick.

You want my witness?

Your witnesses can please come up and take a seat at 2 minutes eat 2 minutes per witness so you can commence whenever we just like.

Okay. Thank you. And thank you to the Committee staff for their collaboration on this important issue with my office. We all know that California has faced numerous devastating wildfires in recent years, from the 2021 Dixie Fire 20 and 2024 Park Fire to our most recent LA fires.

However, recovery efforts are further complicated by an additional burden the taxes on settlement payments for damages. The average citizen has no idea that a settlement for disasters and destruction of their home would be subjected to taxes. The Governor has recently supported future victims by exempting any fire from 25 to 29. Many fires have been exempted.

The gaps in these fires that have not happened to be in my district. Assembly Bill 429 seeks to address the issue directly by exempting past wildfire related settlements from gross income, providing much needed relief to victims.

Specifically, this Bill ensures that settlements for loss incurred for the years 2020 through 2026 we allow victims to focus on rebuilding without the looming concern of unexpected tax liabilities. This Bill would lift that burden, providing financial relief for those who need it the most.

Sadly, the Bill would have provided critical relief for these victims was vetoed last year by the Governor with the veto message stating that it should be included in the budget.

Yet despite this, the most recent budget proposal still fails to include the victims of past wildfires, individuals and families who are desperately waiting for the certainty that they need to rebuild their homes and their businesses. I've also made a formal budget request because this remains an urgent priority for my constituents, many of whom have lost everything.

My office receives multiple calls per day from victims. Victims who are still struggling. Victims who should not have to worry about these financial stresses while they are trying to recover from the trauma that wildfire brings. Their pain is palpable and the need to support them has never been greater.

It is my heartfelt hope that together we can extend the same protections and relief to my constituents that as we have to the impacted by the recent fires in La, because they too deserve the opportunity to heal and rebuild. Fire is not new to our district. It is something that we know comes with choosing to live there.

We prepare, we plan, and we hope and we hope that this won't happen to our community. By removing this financial hurdle, we are helping communities rebuild faster, allowing individuals and businesses to focus on recovery, to focus on their family, their community, and their future.

AB 429 is a crucial step toward ensuring that California's wildfire victims receive the full support that they need in their time of crisis. I respectfully ask for your aye vote today as we work together to provide meaningful relief to those who have already lost so much. Thank you. And I look forward to your support.

Thank you very much. Your witness. You have two minutes, and you can commence when ready.

Chairman Gibson and Committee, good afternoon. Thank you for your time today and the opportunity to speak in support of AB429. My name is Doug Stoy. I am a longtime constituent of Assembly District 1. I'm here today to share my story, which represents so many other people just like me.

On August 4, 2021 the Dixie Fire, one of the largest fires in state history, completely destroyed the small mountain town of Greenville. Along with all the other destruction of this nearly 1 million acre forest fire was my home and all my family's belongings. Pretty much everything we owned was lost that day.

We literally had the clothes on our backs and the vehicles we were driving to escape. I'm a lifelong resident of Greenville. I graduated from high school there. My children went to school there. My wife and I had planned on living out the rest of our lives in our new dream home we just built a few years earlier.

The fire robbed us not only of our physical possessions, but also the goals and ideas for our future. So many birthday parties that would not be held in our beautiful yard or prom pictures that would not be taken by our big fireplace, all literally went up in smoke that August day.

Now we must regroup and try to find a path forward for my family and our devastated community. We have received a good deal of settlement money to try and rebuild and replace all that was lost. Although I am very grateful for the funds allotted to this effort, it was nowhere near enough to replace everything we once had.

The simple fact is things cost more today and we ran out of money before we could rebuild everything back as it once was. I believe any attempt to tax this money would be grossly unfair and completely disrespectful to the people who lost everything.

We should be here today discussing what more could be done to help these folks get back on their feet, not exploring what avenue the state has to tax them more. Every dollar taken from these families in taxation is one less dollar they have to put food on the table.

I am confident that this Committee will have the wisdom to unanimously get behind this Bill and send it on to the Governor for a signature. No reasonable person could think that anything but the complete support of AB429 would be just and fair.

Thank you for your time here today and ask you all to keep the fire victims and their families in your thoughts and prayers as we continue to try to get our lives back to normal.

Thank you. Thank you very much. Appreciate your testimony and sorry for the devastation. To your own personal stuff, but also to your family as well. Next we will have anyone in the room wishing to speak in support of Assembly Bill 429, would you please come and line up and please state your name, organization and your support for the Bill, please.

Kris Rosa on behalf of the California Forestry Association in support.

Good afternoon. Staci Heaton with Rural County Representatives of California in support.

Eric Carlson, Associated California Lawyers in support. And also reminding you that this is. The kind of outreach to rural counties. That the Governor spoke about at a press conference with Ms. Hadwick several months. Ago, plus the tragedies that occurred there.

Thank you very much. Two primaries witnesses in opposition to Assembly Bill 429, would you please please come and take a seat at the table. Seeing and hearing none. Anyone wishing in the room and to register opposition to Assembly Bill 429, would you please line up? Hearing and seeing none. I want to bring it back to the Committee.

Any questions? Hearing no questions. I have one question. Just wanted to ask Ms. Hadwick, as as this point pointed out in the analysis, the park fire was caused by arson. So it is unlikely that any settlement payments would be out will be going out. Is there a different understanding you may have with that?

I was, I was not told that they wouldn't receive payments. A lot of it depends on the size and the number of damages and what declaration they were given. They were included and passed last year in that fire or in with our other fires.

Okay, thank you very much. You may close.

I just want to thank you guys. District 1 I cover 11 counties and we are plagued with fires every year and we know there's more coming. We're trying our best to get in the forest and mitigate that as much as possible. And sadly this has become a norm in District 1.

And so I want to make sure that the constituents in our district are treated the same. And at this point, you know, the north state is watching as LA recovers and and we want to make sure that this is, it's an equity issue at this point. We want to make sure that these rural communities feel supported.

Greenville was devastated. They just got power back late summer. This is like three years later. They were living on generators. They have a handful of houses built. They're school closed last year. This is a community that isn't going to bounce back from fire. And so I would just encourage you as you make future decisions as well.

There's a lot of fire bills coming this year and just be mindful in solutions that rural California has to respond differently than those metropolitan areas. So I really hope that you can support AB429 and thank you for hearing us out today.

Thank you very much again to the author. Thank you very much for bringing this Bill before us and to your witnesses. This Bill will be referred to the suspense file. Thank you very much for your presentation.

Thank you.

Next up, we have file item number two, AB 97. Mr. Lackey. Any witnesses? Mr. Lackey?

I'm running the show by myself. Okay.

That's all right, Mr. Lackey. Please start when ready.

The good news is this is very similar to the Bill that you just heard. That's just a different fire, same kind of challenge. I'm advocating for victims of the Bobcat fire, which was in 2020 and it tore through the national forest, destroying about 116,000 acres of precious land, burning the homes and livelihoods of many.

However, now following the settlement, as you just heard previously, my constituents must face tax on the payments that they are intended to alleviate their losses. To me, it's a cruel irony that those who have already endured so much must now shoulder the burden of taxation on those journeys towards rebuilding their lives.

AB 97 will ensure that those well deserved settlement payments are received in their full amounts and would be exempt from taxation. I don't think that's the intent of these reimbursement payments. And unlike the previous fire we have, we know that Southern California Edison is the settlement entity paying for the loss to the victims.

So we know that this is also a rehash. We had a similar Bill, well, identical Bill last year, AB 1973, but unfortunately it was vetoed with the same veto message that my predecessor just spoke. The Governor indicated that he wanted this to go through the budgetary process. So that's what we're doing.

And despite several similar measures just like this going through the legislative process and years previous, all of a sudden there was a shift in perspective, which is frustrating to us and it's frustrating more importantly to those victims who shouldn't have to pay for this kind of unfairness. It's just, it's hard to swallow and it's just not fair.

So we're asking that you reconsider and we hope that it makes it to the governor's desk once more. And it has to go through you first. So we hope that you'll, you'll consider fairness.

And that's all I got. Thank you very much. Anyone in the room wishing to speak and support name organization, your position on support on this Bill?

Kris Rosa, California Forestry Association, in support.

Thank you very much. Anyone else wishing to throw their support behind this Bill? Any primary witnesses in opposition of Assembly Bill 97, please come forward. Hearing and seeing none. Anyone in the room wishing to oppose Assembly Bill 97? Hearing and seeing none. Want to bring it back to the Committee. Any questions for the author?

Hearing and seeing none. Mr. Lackey, thank you very much for bringing Assembly Bill 97 before us this Bill. Like the previous Bill, this Bill will be referred to the suspense file. So thank you very much for your presentation. Oh, I'm. I apologize. Would you like to close?

I think that's unnecessary. Just would encourage that this is people and the appropriations actually do the right thing. Thank you.

So I don't see Mr. Rogers here. Mr. Tangipa, Assembly Bill 386. Sir, please have a seat. If you have any witnesses, they can please join you at the table. We will be hearing Assembly Bill 386, Mr. Tangipa, and when ready, please proceed with your presentation.

All right, well, thank you. And this is my first time, so thank you. Hello, Mr. Chair and Members. First, I want to thank the Committee staff for their work on the analysis for this Bill. We are happy to take amendments suggested and look forward to addressing constitutional concerns.

I authored AB 386 to provide relief for businesses and employees in California. This Bill establishes a tax credit for businesses that help full time employees with their student loan debt. Starting in 2026 through 2030, businesses can claim up to 3,000 per employee each year. This isn't just a tax. This isn't just a tax incentive.

It's a lifeline for workers burdened by debt and a powerful tool for businesses striving to retain top talent. AB 386 is modeled after a similar program in the State of Connecticut where businesses can claim tax benefits per full time employee if they support them with their loan payments. This Bill is more than policy.

It's a commitment to California's future and a creative solution to attack both student debt and employment and the employment crisis. It allows businesses to invest in their people, reduce their tax burdens and create workplaces where employees feel valued and supported. Here to testify and support is is Carly hall, current Fresno State student, and Patricia Leva who is a senior Human resource manager.

Thank you very much. We just have two minutes each. Whoever one wants to go first, pull the microphone close to you.

Thank you.

Good afternoon. Chair Gibson, Vice Chair, Vice Chair, Ta and Members of the Committee. My name is Patricia Leva. I am a human resource professional here today on behalf of SHRM and SHRM California in strong support of AB386. Workforce challenges require Workforce Solutions As HR professionals, we know that attracting and retaining talent takes more than just competitive pay.

Thank you.

Employers need meaningful benefits that support their workforce and help them remain competitive in California's high cost job market. Tax free educational assistance plays a critical role in upscale and reskilling employees, strengthening talent pipelines and ensuring that California and the United States remain globally competitive with the highly skilled workforce.

However, student loan debt continues to be a significant barrier for workers and employers alike. With an average debt of over 38,100 per borrower, Californians carry more student loan debt than the national average. Employers are increasingly seeking solutions to help workers manage this financial burden.

AB 386 provides a much needed incentive for California employers to invest in their workforce by supporting student loan repayment assistance. SHRM research shows that 57% of organizations already offer tuition assistance because they recognize its impact on workforce development.

Employers that provide student loan repayment benefits make a powerful contribution to lowering this burdensome debt by lowering tax burdens on businesses that invest in their employees. Futures AB 386 strengthens California's workforce pipeline, promotes economic stability, and helps our state maintain its leadership and talent development.

As an HR professional, I know when employers have the right tools, they build a stronger workforce and a stronger California. For these reasons, SHRM and SHRM California urge your support of AB 386. Thank you, thank you very much.

Next witness. Two minutes please.

Good afternoon. My name is Carly Hall and I'm a junior at Fresno State studying political science. I'm from California's Central Valley, where higher education is often a path to opportunity, but student debt often stands in the way.

I'm here today to strongly support AB 386, a Bill that would provide real financial relief to recent graduates and keep young professionals in California. For many students, the weight of student debt shapes every major decision after graduation, where to live, where to work, and. Whether financial stability is even possible.

Entering the workforce already thousands of dollars in debt puts graduates at a disadvantage before they can even get started. This Bill is particularly important to California's public universities like my home school, Fresno State, where many students are first generation college attendees relying on loans to Fund their education.

Knowing that employers would be incentivized to hire and help with student loans rather than facing a lifetime of debt, could shape a student's entire Future. Assembly Bill 386 directly addresses the issue by offering a $3,000 per employee annual tax credit for businesses that help repay student loans.

This is more than a tax incentive, it's a lifeline for students and A critical investment in our state's workforce. By encouraging businesses to invest in young professionals, California can retain its best and brightest, keeping our talents, skills and ambitions right here at home. Instead of struggling with debt for decades.

Employers could support and employer support would allow young professionals to build stability early in their careers. A job that offers student loan support could be the difference between staying here or leaving for better financial opportunities elsewhere.

If we want to retain the talent that our universities produce, we need policies like AB 386 to make it possible to build a future here. I urge you to vote YES and. Help provide real, tangible support for California's graduates and workforce. Thank you.

Thank you. Anyone wishing to speak in support, would you please come and line up on Assembly Bill 386? Anyone in the room wishing to speak in support? Anyone wishing Seeing none. Anyone wishing to speak as a primary in opposition to 386, would you please come and take a seat at the table? You have two minutes.

Good afternoon, Danny Kando Kaiser. On behalf of the California Tax Reform Association, as the analysis states, we are in respectful opposition to the Bill. While we appreciate that there is a a $25 million limitation, there are no criteria for allocation, just whichever employer qualifies on a first come, first serve basis.

The Bill generates General Fund and education revenue losses, which the California Tax Reform Association historically has always opposed without adequate criteria as well. And additionally, we believe that such determinations would be beyond the scope of the franchise Franchise Tax Board. Thank you.

Thank you very much. Anyone in the room wishing to register your opposition to Assembly Bill 386, would you please come to the microphone? Line up. Hearing and seeing none, bring it back to the Committee. Anyone wishing Ms. McKinnor?

Yes, thank you, Mr. Chair. I actually really like this Bill because I love to help the kids pay. Off the student loans. We know that that keeps them from buying a home, moving forward, having children, getting married, all the American dreams, the California dreams. But I would love to see you. Add some type of criteria for allocation.

Because right now it is just first come, first serve. And so if you would be willing to sit down and really think about like, what's the criteria? What would the employer need? What would the criteria be to apply for this? I would be all in. Thank you.

Anyone else wishing to seeing none? I have one quick question for you. I think the young lady in opposition to the Bill, how would you respond to the concerns for the opposition by the FTB is not well suited to determine which taxpayers should be prioritized for this credit?

Yeah, I think what we really looked at is this is the opening door to this draft and to work together to take those same amendments to see what we can do to bring this together.

So we are more than happy to look at all options because like similarly woman McKinner stated We definitely need to look at those that are most disadvantaged right now, students including myself. I still have about $18,000 of student loan payments that I have to pay pay off.

So this is something that we are more than happy to look at. All comments refine this and make it better for everybody.

Thank you very much for your willingness to work with opposition this Mr. Tangipa, would you please feel free to close? Yep.

Well, first and foremost I just want to say thank you to the witnesses that came to join me. I got to see Carly hall grow up in front of me and now to see her right now really warms my heart.

But also I just urge all of you an aye vote and thank you for letting me present my first Bill.

Thank you very much. You did a great job. This Bill will be referred to our suspense file. Thank you very much and appreciate your witnesses for being here. So thank you very much. You may be excused. We will go to your next Bill which is item number six, AB 490 and you may present when ready.

All right, well now that I'm a master. Mr. Chair and Members, first I want to thank the Committee staff for their work on the analysis for this Bill. We are happy to take the amendments suggested and look forward to working together.

High interest rates are turning a simple car loan into a financial burden that traps hard working people into long term debt, making it difficult for them to make ends meet or save for the Future. More than 80% of new vehicle purchases are financed through loans or leases and the interest rate offered can significantly impact affordability.

California's current average auto loan interest rate is between 6% to 11%. For millions of Californians, reliable transportation isn't a luxury, it's a necessity for work, school and daily responsibilities. However, higher interest rates and increasing vehicle prices have made car ownership less affordable for individuals and families.

In Assembly District 8, a majority of people rely on a personal or work vehicle to get to and from everyday locations like school, work or the grocery store. My constituents do not have the ability to rely on public transportation or other more affordable options for traveling.

I am authoring AB4 to provide some much needed relief to California's hard working families, students and anyone in between. AB490 will allow a deduction for interest paid on a qualified personal vehicle loan, helping taxpayers manage the growing cost of vehicle ownership.

Implementing this Bill will make a meaningful difference for everyday Californians striving for financial stability, easing the burden of rising vehicle cost and helping them stay on the road to success.

Thank you very much. Are there any witnesses in support, Any primary witnesses?

No.

No. Okay. Anyone in the room wishing to register their support For Assembly Bill 490, please come to the microphone in support. Hearing and seeing no witnesses in support from the audience will entertain primary witnesses and opposition. Would you please come and have a seat at the table. You have two minutes and commence when ready.

Hello again, Danni Kando Kaiser on behalf of California Tax Reform Association. It's never been the case that the General Fund supported the purchase of automobiles for consumers. Consumer interest was deductible many years ago, but was has long ago been eliminated.

The Bill would disproportionately help taxpayers in the higher tax bracket while providing little to no relief to low and middle income families. Again, the deductibility of consumer interest should not be introduced or reintroduced, I should say, into the tax system. Thank you.

Thank you very much. Anyone in the room wishing to register their opposition to Assembly Bill 490, please come to the microphone. Hearing and seeing none. I'll bring it back to the Committee. Any Committee Members have any questions of this witness? Hearing and seeing none. Mr. Tango, thank you very much for bringing this Bill before us.

I have one clarifying question. The FTB established that this deduction will cost over 1 billion, $1 billion in the taxable year. When it is fully in the effect and the definition of motor vehicle is quite broad.

How can you confidently assure us that people who can't afford get this tax credit, not those who can afford buying luxury cars?

Yep. And just like I had stated, this is, you know, really opening the door where we've looked and we've heard amendments as well to make it one their personal vehicle, but also adding a cap to who can qualify for this to make sure that we're actually focusing on those who need it most.

I think about my situation where my first step to building credit was actually an auto loan that I used on a used car.

And that really helped open the door that as I became a business owner as well, this would have really helped me get started and really helped me pull my family out just with the available funds.

So we are more than happy to listen to a lot of the recommendations and work with staff to make this even better so that way we can focus on those who most need it.

Great. What was your first car?

It was a 2008 Mercedes C300 mainly because I chose that because the 08 to the 2015 is the exact same model. So it looks just like the 2015. And as I was getting into a business of sales, I did not want to drive my 1994 sunburnt green Volkswagen Passat that I used to sleep out of.

So that was not the car I was going to use for sales.

Thank you very much. You may close.

Well, I respectfully ask for your Aye.

Thank you very much. This Bill will be referred to the suspense file. Again, thank you very much for your presentation. And I believe that you have one additional Bill. Item number seven, AB547. You may commence when ready.

All right. We should be flawless now. So Mr. Chair and Members, I want to thank the Committee staff for their work on the analysis for this Bill. We are happy to take the amendment suggested and look forward to working together.

Infertility rates are rising nationwide and despite its high cost, IVF is becoming a more common and necessary option for many families. Each year, one in five married women are unable to get pregnant after one year of of trying to conceive.

While there are current discussions surrounding IVF insurance coverage, there will still be out of pocket cost that individuals will have to pay on top of medications and procedures for one round of ivf. It is likely that most couples will have to do multiple rounds to result in a baby.

That's why my Bill, AB 547, which I refer to as the More Babies Bill, aims to provide much needed relief by offering a new tax credit for families undergoing IVF or other fertility treatments.

AB 547 provides a tax credit of up to 5,000 per year for individuals undergoing IVF or qualified fertility treatments, giving families of all kinds the chance to pursue their dreams of parenthood.

For many people, IVF represents hope that when all seems lost and a chance to turn their dreams into reality, the emotional and financial burdens of infertility should never stand in the way of building a family. Today I have brought Courtney Heiner here to testify in support and share her story of experiencing infertility and IVF.

Ms. Heiner, you have two minutes for your testimony. Thank you.

As an NCAA five time All American and national champion in track and field, I have pushed my body to the absolute limits to be one of the best in the country. But nothing has pushed me harder and than the journey of starting our family and going through four rounds of IVF over the last five years.

Seven years ago, my husband Kellen and I wanted to begin the process of growing our family, but were met with failure after failure. After several failed attempts at basic fertility treatments, we decided to turn to ivf. Our second embryo transfer was successful and we were over the Moon.

We were thrilled and at six weeks we were able to hear his heartbeat. It felt like years of saving and months of hormone shots were about to pay off. We graduated from IVF and continued shots under the care of my OB GYN. However, everything came crashing down at 12 weeks.

When the doctors couldn't find a heartbeat, I miscarried and waited. I miscarried after a week and waited a few months to begin trying again. If my body got pregnant once, surely it could do it again. However, this wasn't the case.

Two more failed embryo attempts followed that year and the doctors couldn't understand what was wrong with my body. My body was exhausted. Emotionally, I was broken and the financial stress was starting to pile on. Thank goodness. We were blessed to be able to have insurance, but at that point we had already paid about $47,000.

We didn't know what direction we should go in. But when we were at our lowest point in our lives, God often shows us the greatest miracles. It was at this time that my sister in law Rachel approached us and said we'd be willing to be our gestational carrier.

Asking someone to go through three months of IVF shots in itself is terrible, let alone having to go through childbirth and giving that child to someone else. All of a sudden, we had one last shot to see if this could work. The next year was filled with more medical testing with myself, Kellen, and our gestational carrier Rachel.

We had to make sure our embryos were FDA approved, go through psychological evaluations and work with lawyers to draw up legal contracts. Every step of the way, the costs continue to rise. Legal fees alone cost us close to $12,000, but we felt that this was going to work.

On the first N Bureau transfer in March 20, March 202024 we were successful. And on December 1, our sweet Henry was born. It was a modern day miracle that wouldn't have been possible without modern medicine and our faith in God. We wouldn't have been. We would have.

We couldn't have been more overjoyed and relieved that he was finally here. After everything was all said and done, we paid $88,000 every second of working two jobs, plus the financial support of my husband made it all worth it. Most people can't understand the physical, emotional and financial toll that IVF can have.

But that hope of becoming a mother and raising a child is what keeps us going? So many women and families around California might not be in the same financial situation that we were able to be in.

We are currently at a crossroads of IVF and we need to make it more affordable for families that would love nothing more than to be a mother or father. This tax break would allow families more opportunities to potentially afford ivf.

If our response, it is our responsibility to create these opportunities for these families and give them a shot to at least have the option to make IVF more affordable for them.

I stand before you as a strong woman whose story is still unwritten when it comes to my own family in hopes that we can make a change for California families.

Thank you very much. How is little baby Henry?

Huh?

How is little baby Henry?

He's doing really good. He's almost four months.

Almost four months. Well, congratulations. Sorry for your loss.

Previous anyone in the room wishing to speak in support of the More Baby Bill, please line up and please state your name. Hearing and seeing no one wishing to speak. Anyone in opposition to the more Baby Bill? AB 547, would you please. Hearing and seeing none. Bring it back to the Diaz dais. Anyone? Members. Mr. Garcia

Thank you.

Senator Tangipa, I thank you for, for bringing this Bill forward. Having both family and friends that have benefited from IVF to start their family definitely feel this is a, a great cause. I do have a question regarding your. Rationale to bring it as a tax. Expenditure as opposed to perhaps mandated coverage through health plans.

Well, I know as there are talks right now of potentially expanding it. We just, we do know that still out of pocket expenses are going to happen whether it is added as an essential health benefit or not.

So we think that this is just an opening step to make sure that if we need more babies, we have an option for more babies and especially that they can afford it as well.

Thank you very much, Mr. Tangipa. Would you like to close?

Of course. So really what helped me come to think of this Bill is I was working with my friends Taylor and Allen Brown, I always call them AB and I helped them into their first home that they could buy and it was a five bedroom, three bathroom house.

And I told them that I don't think this is just your first home. I think this is your forever home and you will build a very large family in this home. They are on their second attempt of IVF right now after trying for so many years.

And so I think about the realities that and the dreams that they have because those two deserve to be parents more than anything else, especially when they took care of me when I went through some issues myself. So I look at this as just an opportunity to expand more babies for more families. And I humbly urge for your aye vote on AB 547.

Thank you very much. Thank you to your witness for being here and presenting. This Bill will be referred to our suspense file. So thank you very much for your presentation. Next up, we'll have item number four by Rogers, AB 330. Mr. Rogers, thank you very much for waiting patiently and you may proceed. You may proceed when ready.

Thanks so much, Mr. Chair and Members. I'm happy to present AB 330. This is a simple reauthorization to extend a sunset for a local Prepaid Mobile Telephony Services Collection Act. That Bill was originally passed in 2014 on a bipartisan basis.

It has been reauthorized numerous times without any opposition, but the tax itself actually has an 80-cent surcharge that allows us to support not just our 911 services, but some of our local governments as well, and brings parity between prepaid and postpaid for our, our, cell phone companies. Uh, this extension is supported by our local government partners.

I will turn it over to Amy Jenkins, who is representing Muni Services, as well as Ben Triffo with Cal Cities.

Thank you very much both for appearing. You have two minutes each.

Thank you, Mr. Chairman and Committee Members. Amy Jenkins, on behalf of MuniServices and Avenu Insights & Analytics Company. We provide a lot of different local government services nationally, but we have a very big footprint here in California.

Um, as the author indicated, this Bill extends the local Prepaid Mobile Telephony Services Collection Act to January 1, 2031, preserving a critical revenue tool for local governments that funds public safety, infrastructure, and essential services. I had a much longer statement prepared, but I will make my comments short since they echo that of the author.

I will just simply say that, um, as, as, noted, there has been no opposition to prior extensions. Um, not allowing this, uh, this collection to continue will mean more than 100 jurisdictions lose the opportunity to collect this surcharge, at a time when, um, obviously revenues are, are, very limited and we're under a lot of different fiscal constraints at all levels of government.

So, we appreciate your support when the Bill is presented, um, as part of the suspense calendar and thank you for your time today.

Thank you very much. Next witness, two minutes.

Good afternoon, Mr. Chair and Members. I'm Ben Triffo with League of California Cities. I want to first say I love seeing all the festive green up on the dais today. Um, definitely want to thank Rogers for bringing this measure forward.

We definitely support the extension of AB, or of, the act that is proposed to be extended under AB 330. In 2014, the Legislature enacted AB 1717, which was the first iteration of the act and then has subsequently been extended twice um since then. This law has been a success.

AB 330 is, um, if it's not extended, over 100 cities are going to lose their, their, authority to, um, impose a U.U.T. at the local level, with over $1 million dollars um in revenue at risk.

Um, as cities face, uh, you know, significant impacts to their budgets, um, we need them to have as much revenue as possible, so now's not the time to be taking revenue off the table. So, we respectfully asked for your "aye" vote and thank you for the consideration.

Thank you very much for your testimony. Anyone wishing in the room—wishing to speak—in support of this Bill, AB 330, please line up. Please state your name, organization, and your position on the Bill. Thank you.

Thank you. My name is Claire Sullivan. On behalf of the cities of Redwood City and El Cerrito, we support this Bill strongly. Thank you.

Thank you very much.

Mr. Chair, Members. Jeff Neal on behalf of the City of Chula Vista, also in support.

Thank you.

Mr. Chairman, Members. Oracio Gonzalez on behalf of the cities of Coachella and Pico Rivera, in strong support and thank the [mumble] for his leadership. Thank you.

Thank you. Any primary witness in opposition, would you please, uh, approach and take a seat at the table? Seeing none. Anyone in the room wishing to register their opposition to Assembly Bill 330? Hearing and seeing none. Bringing it back to the dais. Any Members wishing to speak on anything about this Bill? [Laughs] Hearing and seeing none.

Thank you very much for bringing this Bill forward and, uh, feel free to close.

Thank you so much, Mr. Chair. I know that this is a candidate for suspense file. I just want to thank Mr. Ruff for his analysis on the Bill. It's very thorough and thank you for the Committee's time.

Thank you very much. Again, this Bill is a candidate for the suspense file. It'd be referred to there. So, thank you very much for coming.

Last but certainly not least, File Item Number 8: AB 389. Mr. Wallis. Welcome and you may present when ready.

Well, thank you, Mr. Chair and Committee Members. I have before you today A B389, which will provide a personal income tax credit for expenses related to building or installing home hardening measures. California's wildfire crisis is intensifying in high and very high fire hazard zones. Homes clad in Wood siding with vulnerable vents and Roofs become tinder for spreading flames.

Embers trigger devastation, billions in damages, families uprooted and lives tragically lost. In addition to the wildfire crisis, California has an affordability crisis and homeowners struggle with making the upgrades they desperately need to protect their property.

AB 389 addresses this problem by establishing a tax credit from 2025 to 2030 for homeowners in these high risk areas to harden their primary residences. The tax credits equal to 40% of qualified expenses such as fire resistant roofs, ember proof vents, enclosed eaves, or a minimum 6 inch non combustible base clearance.

Capped at $400 annually and $2,000 total, this modest measure aims to bolster home safety and reduce the strain on state resources. I appreciate the Committee's insightful analysis and I'm eager to refine this proposal with your guidance. That being said, I want to address a few points of concern in the analysis.

I believe this credit will do two things. It'll encourage homeowners to get going on upgrading their homes to stand a better chance during a fire, but it will also help homeowners afford the things they're doing now. That's why I chose to start the credit for work they're already doing after the LA fires.

I do agree that we need to work on the definitions of qualified expenses. We already have heard from firefighters that we need to add non combustible exterior wall coverings and have drafted those amendments. We also need to make it clear at what point in time we assess the fire risk.

I'm committed to working on these issues while the bill's on suspense. I agree with the analysis that $400 won't cover every upgrade, but preventing even one home loss yields mil millions in savings. This effort has strong backing from firefighters, building officials and realtors.

I look forward to working with you while the Bill is on suspense and joining me Today is Terry Mchale from CAL FIRE Local 2881.

Thank you Mr. Chairman. Terry Mchale with Aaron Reed and Associates representing CAL FIRE. Mr. Chairman and Members. Mel Brooks says that the great success of his films is that he tells a great big joke and gets everybody laughing.

And just as the laughing subsides, he tells another big joke so they never get a chance to relax in the most ugly and reverse of circumstances. That's what's happening in California. We are having these extraordinary fires.

Eight of the last 10 major fires have happened in the last seven years and they're going to continue to happen and we need to do something. Mr. Chairman, I was in your hometown the other day, and I saw in the LA Times these wonderful graphics on how we can build communities of the future so that we don't have fires.

And it looked like the kinds of towns that President Kennedy talked about in his great speech on Robert Frost 12 days before he died, these beautiful cities. But they're not cities we're ever going to be able to build.

We're not going to build new cities with agricultural areas and great big walking areas and basketball courts and baseball courts and golf courses because we have a homeless problem. We have 40 million people here and we're building on top of each other. That's why this Bill is so smart.

What CAL FIRE has witnessed in the last couple years is that these fires take on their own climate. Huge embers flying from these areas, flying hundreds of miles and igniting fires in other places. This Bill is not the only answer, but it is certainly a major part of the equation. I too enjoyed the analysis.

I like a well written, ironic analysis. And I agreed when someone says the fires themselves perhaps should be the motivation rather than the tax break. But the problem, as all of us know, is that sometimes we have to make both decisions.

And that $400 makes a considerable difference in the lives of people who are already suffering, who are already having difficulty, already having a difficult time. Mr. Chairman, Members of the Committee, this is a good Bill. It's a Bill in the right direction.

It's a Bill that I think both Republicans and Democrats can embrace, that rural and urban areas can embrace. Let's do something good together. I ask for your support.

Thank you very much for your testimony. Any witnesses in the room wishing to add on and support you, please come to the microphone. State your name, organization and your support position.

Good afternoon. Amy Garrett, on behalf of California Association Of Realtors in strong support of this measure that we do believe provides incentive for homeowners to invest in home hardening, protecting their own homes and the surrounding properties. Thank you.

Thank you very much. Any primary witnesses in opposition to Assembly Bill 389? Would you please come and have a seat at the table and commence when ready at two minutes.

Thank you. Danni Kando Kaiser, on behalf of the California Tax Reform Association, in respectful opposition to the Bill, again, as previously stated, because of its impact on the General Fund, we do have to oppose the Bill. $400 credit is not insignificant, but we do think that it does not truly provide meaningful relief.

We would perhaps suggest if there is a lack of affordability, perhaps a low interest loan Fund that would be more targeted and effective than this open ended tax credit. Thank you.

Thank you very much. Anyone in the room wishing to speak in opposition to Assembly Bill 389, would you please approach the microphone? Your name, your organization and your position. Hearing and seeing none. Want to bring it back to the Committee? Any Members wishing to seeing none. Mr. Wallace, you may close.

Thank you, Mr. Chair. I will keep it brief at St. Patrick's Day. I know we've got places to be, but I just will respectfully request an aye vote when the time's appropriate. Thank you for your time and consideration.

Thank you very much. Your witnesses, please. Thank you very much. And this again will be referred to our suspense file. The Revenue Taxation Committee is now adjourned.