Assembly Standing Committee on Revenue and Taxation

The Assembly has just adjourned so we can call the Reverend Taxation Committee to order. I want to just simply say advocates, please remember to submit your position letters through the porthole at least one week prior to the hearing in order for your organization position letter to be reflected in the Bill analysis.

And we don't at this point, we don't have a quorum. We're still waiting for Members to join us. So I'm just going to go through my formalities that I need to address.

Pursuant to our Committee rules, bills with fiscal impacts of greater than $150,000, whether that is revenue gains or revenue loss, will not be eligible for a vote immediately upon the presentation given by the author. Instead, the Bill will refer to the suspense file which we will be taking up as a second part of today's hearing.

In addition to the bills that are referred to the suspense during a regularly ordered portion of the hearing, we will be taking up bills that are tax levies that were referred to suspense at our previous or prior hearing.

With that in mind, only two bills today's today on today's agenda will be eligible for for votes during the regular order of business. And those bills are File item number three, AB 1377 by McKenna. File item number four, AB 1416 by our Vice Chair, Mr. Ta Trita. So we're still waiting for a quorum and one additional announcement.

I would like to note that the Speaker Rivas has appointed Assemblymember Juan Carrillo to replace Assembly Member Jasmeet Baines. Today's for today's hearing and welcome, Mr. Carrillo. Thank you very much for being here. Thank you very much. We will begin as a Subcommitee until we have an opportunity to establish a quorum.

With that being said, we will now hear. We will now move to our first item on the agenda. AB564 by Mr. Haney. We see him in the audience. Thank you very much. Please have your witnesses to join you. We will be asking the witnesses to please keep your comments to 2 minutes, 2 minutes each. Mr.

Haney, welcome and you may begin when ready. Thank you so much. Excuse me. How you do that thing right here? Okay, Mr. Haney, if you can just pause for one moment while we establish a quorum. Madam Secretary, please call the roll.

[Roll Call]

Thank you very much. A quorum has been established. Mr. Haney, thank you very much for your patience. You may proceed when ready.

Thank you. So much.

Mr. Chair and Members, AB564 will provide tax relief to California's struggling cannabis industry by freezing an unprecedented 25% excise tax increase. This is a tax increase that is solely going to be on this single industry.

It is one that was put into place a few years ago. And during that time, over the past few years, we've seen an industry that has experienced incredible challenges to be able to survive in an environment where the illegal, untaxed illicit market continues to grow. I want to start by being very clear that this Bill will simply freeze the tax at its current rate.

It does not decrease the existing tax and will not reduce the revenue generated by this tax. California has always been at the heart of America's cannabis economy and culture. But since voters passed Prop 64, California has not seen the full potential of the legal cannabis industry in order for it to fulfill the vision that we had.

The legal cannabis industry, which is subject to state and local taxes and fees, is constantly at a threat of being overtaken by the illegal untaxed industry. Fully licensed legal businesses in California capture just 40% of the state's entire market, while the underground illegal market accounts for 60% of the overall market.

And in 2024, active cannabis licenses decreased by 18%, meaning more and more small cannabis businesses are succumbing to the pressure over taxation.

We're also seeing a significant drop in the past few years of both sales tax and overall revenue collected from the industry. Compare California with states like Michigan, which just last year surpassed California's cannabis market in per capita sales.

California's cannabis industry is high taxed as is, and a 25% increase would be an existential threat to this industry that is struggling to compete with the illegal illicit market. Our legal cannabis industry needs our help. They need our support. These small businesses employ hundreds, hundreds or thousands of workers.

And we need to keep the promise that we made to voters to make cannabis legal and accessible. With me today in support is Amy Jenkins with the California Cannabis Operators Association and Kristin Heidelbach with United Food and Commercial Workers.

Thank you very much. Welcome. Two minutes each, please. Thank you.

Thank you, Mr. Chairman and Members. Amy Jenkins, on behalf of the California Cannabis Operators Association. We represent about 300 licensed operators across the supply chain and we are very, very supportive of this measure today. Let me be very clear that the legal cannabis industry is not stable. It is in a crisis.

And any suggestion that this crisis is overstated is a misrepresentation of the facts. In March, Whitney Economics, one of the leading national cannabis market analysts slashed its five year US cannabis retail forecast by 21 billion. Why? Because states like California are losing market share due to high tax enforcement.

Ms. Jenkins, can you move your microphone just a little closer?

Oh, sorry. Thank you very much. Specific findings related to California are sobering. Consumer participation, as the Assemblyman noted, has plateaued. It's leveled off at 40%. And there's some data that indicates it's declining. States like Michigan, as stated, with lower taxes, are now outselling California on a per unit basis.

Then the economic report, which has been referenced in your analysis and elsewhere, commissioned by the Department of Cannabis Control, affirms what operators have been saying. California's excise taxes and licensing fees are 124% and 162% higher respectively than Michigan's. And altogether, our taxes and fees account for about 77.5% of total wholesale value. That is not a sustainable framework.

12,600 jobs were lost in 2022, 5,000 in 2023. And if that weren't evidence enough, CDTFA just last week issued new data indicating that the incident industry owes $980 million in outstanding taxes, penalties and interest. Let's also be clear about what the voters intended.

Prop 64 references no fewer than five times that taxes must be structured to ensure the legal market outcompetes the illicit market. Yet we are seeing the opposite. Licensed operators are not only competing against illicit synthetic products, they're funding the entire regulatory system through their fees. No General Fund dollars or cannabis tax dollars support this framework.

AB564 is not a tax break. It's economic triage. And we urge your support today. Thank you very much.

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

Good afternoon Chair and can you guys hear me? Okay, Members, Kristin Heidelbach here on behalf of UFCW Western States Council, I. We are proud co-sponsors of AB564. I really don't want to belabor the point. I think Assemblymember Haney and Amy laid out perfectly the situation that we're in.

I am here to explain to all of you and help this Committee understand that these are union jobs. UFCW represents over 5,000 cannabis workers in the State of California. That is through the good work of my nine locals here. So those are jobs that we would be losing.

We almost lost Ease, which is the largest cannabis delivery business in California. That's over 500 jobs that are unionized under UFCW contract. To say that these businesses are struggling.

We have been screaming that the British are coming for a while, but we now have a cannabis industry that's competing with a unchecked hemp industry that does not pay the tax. We have an illicit underground industry that competes with them and doesn't actually pay any of the fines and fees that aid in enforcement.

Now we have a possible tax hike and increase, which means that more and more people are going to lose their businesses. More jobs will be lost. This, as I already mentioned, is not a tax decrease. This is simply a freeze. We're just trying to fight another day. Thank you. We urge your aye vote.

Thank you very much. Want to invite audience in the room to please come to the come to the microphone. I just need your name, organization and your position. This is support only too, thank you.

Thank you Mr. Chair and Members. Dan Seeman on behalf of the California Cannabis Industry Association, proud co-sponsors, and urge your support. Thank you.

Good afternoon Chair and Members. Ross Buckley on behalf of the City of Sacramento in support.

Good afternoon. Karen Lang on behalf of the Boards of Supervisors in Humboldt and Nevada counties in support today. Thank you.

Good afternoon Mr. Chair and Members. Roman Vogelsang with Capital Advocacy here on behalf of Steezy in support. Thank you.

Chair and Members. Alicia Priego on behalf of Kiva Confections and KSS Sales in support.

Jared Kylo on behalf of the United Cannabis Business Association, Long Beach Collective Association, Silicon Valley Association, San Francisco Retailers Association, CVCAN, which is a Coachella Valley, all in support, and a proud co-sponsor.

Thank you.

Good afternoon. Shawn Tapeckian on behalf of the Cannabis Distribution Association in support.

Thank you.

Good afternoon. Shauna Blackburn on behalf of Blitz Insurance Company in support.

Jessica Gott on behalf of the California Alliance of Child and Family Services in opposition.

Good afternoon. Josh Lewis on behalf of Origins Council and Embarc Dispensaries in support. Thank you.

Diana Garcia in support. I have 9, 9 retail stores here in California. Thank you.

Dale Gieringer on behalf of California NORML, a proud co-sponsor and also 1,420 independent write-in letters in support.

Thank you.

Pam Lopez on behalf of the Society for Cannabis Clinicians and Jade Nectar in support.

Annie Aubrey on behalf of a struggling dispensary in support.

Hi. Jennifer Noska, I work for a women-owned women-run wellness brand and we're in support.

Kevin McCarty, Compliance Director for Coldwell's Dispensaries here in Sacramento and of Capital Compliance Management representing about 20 licensed businesses here in the Sacramento area in strong support. Thank you.

Cher Pendarvis. I'm an advocate for patients of MMIC program, compassion program in support of AB564 because it is saving my life today. Thank you.

Thank you.

I'm Andrea, and I'm a patient, and I support this Bill.

Thank you.

Hi, my name is Christine. I'm also a patient and an advocate, and I support this Bill. Thank you.

Thank you.

Good afternoon. My name is Nina Parks. I represent the Equity Trade Network, which is around 47 small equity businesses fromHumboldt all the way down to San Diego. And we are in support.

Sherry Martinez, patient in support.

Rich Miller, on behalf of Americans for Safe Access and the American Alliance for Medical Cannabis. Patient volunteer organizations in strong support. Thank you.

Gerald Dentes with Full Moon Strategies on behalf of Alameda County in support. Thank you very much.

Anyone wishing. I mean anyone. A primary witness is in opposition. Would you please come and have a seat at the table? You have two minutes. Again, this is primary witness in opposition. Two minutes.

Good afternoon. Chair and Members of the Committee, is the mic okay? Okay. My name is Alex Loomer. I'm here today on behalf of the Resources Legacy Fund who helped draft the environmental funding and regulatory sections of Prop 64 and works to protect water quality and other natural resources.

Today you're presented with a simple choice between protecting kids in the environment or or increasing cannabis industry profits. I usually don't read Committee analyses back to the committees, but I think this one line bears repeating. Quote, contrary to arguments made by the cannabis industry, the legal market is not failing.

According to the Department of Cannabis Control's California Cannabis Market report that was recently released, cannabis cultivation has increased by 70% since 2020. In just 2024, units of cannabis sold increased by more than 5%. Prices decreased primarily resulted from the current glut in supply.

In voting for Prop 64, voters were promised that it would, quote, generate hundreds of millions of dollars in new state revenue annually for restoring and repairing the environment, youth and treatment and prevention, community investment and law enforcement.

Through revenues raised by the cannabis cultivation and excises taxes, AB 564 significantly reduces this critical funding and goes against what California promised voters in 2022.

We participated in negotiations for AB 195 and we, along with many other organizations, only agreed to AB 195's cultivation tax repeal because we were promised revenue neutrality, which translated into raising the excise tax from 15 to 19% this July. AB 564 would break this deal. So AB 564 is not a simple freeze.

It is locking in a reduction that has already cost us 550 million over the past three years and if passed, will result in a reduction of millions more.

This means fewer funds to address California's childcare shortage crisis, reduce youth drug dependency, remediate damage to water quality and natural resources from the illegal cannabis grows, and enforce laws against illegal operations.

Resources Legacy Fund respectfully urges you to honor the promises made to voters and prioritize the children and the environment over the cannabis industry profits, and vote no on AB 564. Thank you for the opportunity to provide these comments.

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

Hello, my name is Colnesca and I'm part of the Executive Team at Youth Forward and speaking on behalf of 98 youth and environmental organizations, I'm here today to urge you to prioritize funding for children, youth, and the environment over the cannabis industry profits by voting against Assembly Bill 564.

Currently, the cannabis tax revenue funds childcare and youth programs throughout the state, including in your local communities. Youth organizations and communities hardest hit by the war on drugs, including tribal organizations and tribal nations are using these funds for mentoring, youth development and substance abuse prevention. In the day and age of fentanyl, these programs save lives.

Since the industry received a large tax cut back in 22, we have seen funding for childcare and youth programs decline. Given the federal cutbacks in the state budget problems, we need these funds more than ever now. The funding from state cannabis tax revenues is the only resource we have to repair these damages and maintain these youth programs.

Please stand with us with our children and with our environment and vote against AB 564.

Thank you very much. Anyone in the room wishing to speak in opposition, would you please come forward? I just need your name, your organization and your opposition. That's it.

Hello, my name is Ignacio Taylor and I'm a millennial descendant of the Wichita and affiliated tribes residing in Anadarko, Oklahoma. I'm here with Youth Forward representing our tribal foster youth and I oppose AB564.

Thank you.

Hello, everyone. My name is Leticia Aguilar Sentamana. I'm a Member of Pnoli Ville Pomo Nation. I'm the CEO of Native Sister Circle, local nonprofit, and I'm here on behalf of historically underrepresent communities throughout California.

Thank you. Thank you very much. Next witness.

Hello, friends, relatives, my name is Angela Hinajosa. I am a representation of Native Sisters Circle California Native O Project and many unrepresentative youth that are in this room. I would not be here without these programs and these fundings. And I am also in opposition of AB 564.

Thank you very much.

Hello, chair and Members, Jeanette Carpenter on behalf of Child Action Incorporated and we're in respectful opposition. Thank you.

Buenas tardes, Good afternoon. Carlos Hernandez with MILPA Collective serving justice-impacted youth in Yolo, Solano Counties in respectful opposition.

Hello. Jesus Robles with MILPA fellow and I oppose.

Hello. My name is Sergio Hernandez. I represent MILPA Collective. I'm an intern and I oppose AB 564.

Good afternoon. I'm Damian Aldaco, a part of Milpa Youth in Solano County and in opposition

Buenas tardes, Elias Gonzalez representing Santa Cruz and Monterey County with the MILPA Collective in opposition of this Bill as well.

Joshua Pat Stone, Director of Development for Santa Cruz Barrios Unidos. We represent youth and adults in Santa Cruz, Monterey, Salinas and Alameda County, and we're in strong opposition.

Hello. I'm the youth coordinator at Santa Cruz Barrios Unidos, and I strongly oppose this. Thank you.

Good afternoon. My name is Mike Duncan. I'm the Executive Director of Native Dads Network. I'm also around Valley tribal Member. I'm Maiu Wintun Wailaki on my father's side and Western Bash Shoshone Tomok on my mother's side and I oppose.

Hi, my name is Cole Barlow. I'm here on behalf of Environmental Protection Information Center, California Plant Society and Defenders of Wildlife. In opposition. Thank you.

Hi, I'm Matthew Yokamoto on behalf of Friends of the Inyo, Friends of Harbors, Beaches and Parks and the Pacific Forest Trust, I'd like to voice my respectful opposition to this. Thank you.

Good afternoon. Cam Bezdek, on behalf of California Trout and Trout Unlimited, in respectful opposition. Thank you.

Hello. My name is Jesus Sanchez. I am a licensed marriage and family therapist and program Director at a local arts and cultural center here in Sacramento Soul Collective. And I am here in opposition. Thank you.

Thank you very much. Want to bring it back to the Committee? Any questions? Hearing and seeing none. Let me just make a few. Oh, I'm sorry. Ms. McKenna, please.

Yes, I have one question. Did. And I think I talked to the author about this before. So this Bill only pauses it. It doesn't get rid of taxes.

It keeps the excise tax at 15%, which is its current rate. So it doesn't reduce the tax at all. It keeps it at its current rate.

That's what I want to clear up. Thank you.

Thank you very much to the author and to those who've testified on both sides, certainly from Los Angeles, have seen the underground market creep their heads up multiple times before even to devastation of losing life running such illegal cannabis.

And certainly appreciate those who are one, elevating the need for us to do everything we can to stop the underground economy from moving forward. So I want to say thank you very much for that. Again, just elevating that comment and want to give the author opportunity to close.

Thank you. Mr. Chair, respectfully ask for your item.

Thank you very much. This item is a suspense item, so we refer this will be referred to our suspense file. So thank you very much. And Mr. Haney, you also have file item number two, AB 1265 as well. If you're yes, witnesses can come forward and have a seat.

All right, thank you again, Mr. Chair and Members, AB1265 is the Historic Building Tax Relief Act, which will help incentivize developers to convert unused vacant historic buildings into housing and mixed use developments by providing much-needed financial relief.

And you may begin when ready.

Right now, there are hundreds of thousands of historic buildings in California that are ideal camps candidates for the preservation of and conversion to housing. But because this type of development requires skilled labor and customer materials, it can be extremely costly, disincentivizing developers for making these buildings useful and resulting in more vacant and blighted streets.

California has incentivized this type of development by offering the California Historic Tax Credit, which provides a retroactive credit to historic rehabilitation projects. This credit is set to expire at the end of next year. This Bill would first extend the sunset date of the tax credit to 2031, allowing more projects to take advantage of this credit.

And it would prioritize the and that projects that preserve existing affordable housing or convert underutilized buildings into housing, which would ensure that the most impacted buildings and neighborhoods are restored to their full potential.

It will provide the financial means for projects to be feasible, resulting in more housing across the state and ensuring that our neighborhood's diverse characteristics are kept intact. With me in support today is Cindy Heitzman with the California Preservation Foundation and Rita Cofield with the J. Paul Getty Trust.

Thank you very much and welcome. You have two minutes each. Thank you.

Thank you. Thank you, Chair Gipson. Thank you, Assemblyman Haney, for supporting this important Bill. I'm Cindy Heitzman, Executive Director at the California Preservation Foundation, representing a statewide coalition supporting AB1265, which includes American Institute of Architects of California, Structural Engineers Association of California.

California adopted its first historic tax credit in 2019. But by the time the regulations were finalized and applications opened, nearly five years had passed. Demand quickly exceeded the $40 million cap for large projects, and some of the largest projects, many involving housing, were left unfunded. AB1265 gives the state program a real chance to work. The historic tax credit is an earned incentive.

Developers must complete the work before claiming the credit. It levels the playing field for older buildings that often face higher upfront costs for seismic safety, fire protection and infrastructure upgrades. These investments make our communities safer and more resilient.

From 2018 to 2022, California projects generated over 10,600 jobs and 210 million in tax revenue without the use of the state tax credit. From 2001 to 2023, the Federal Historic Tax Credit fueled 235 projects in California, totaling $4.2 billion in investment and supporting nearly 59,000 jobs.

And over 40% of those projects created or maintained housing, often in mixed use developments. This Bill includes a 10% bonus credit for projects that create housing and retain existing affordable housing, encouraging more investment where it's needed the most. Other states have seen remarkable returns on their state tax credits. Virginia reports a $4.73 return on every dollar invested.

Kansas saw projects surge from just two per year to 68 annually after passing their credit. These are not speculative numbers. They are the measurable impact of a tool that works. California can do the same, and I respectfully urge your support of AB1265.

Thank you very much. Next witness, please. You can use that microphone right there. Yeah. Pull it close to you. There you go.

Thank you. Good evening, Chair Gipson and Assemblymembers. My name is Rita Cofield and I work and volunteer in neighborhoods where the building stock is often older and gets overlooked or targeted for wholesale demolition because the architecture or visual qualities are not high style.

My work at the Getty Conservation Institute, leading the African American Historic Places LA Project, is relying on community stewards to identify LA's hidden gems with an extraordinary social and cultural story to tell so that we can celebrate them and bring them forward for historic designation. But historic designation is not an end in itself.

It's no longer a luxury or pastime for the wealthy or elite. Recognizing and landmarking sites is just the first step in creating a catalyst for community and economic investment in more modest neighborhoods. Preservation is the most sustainable method for creating better living environments, reducing global warming, reducing the loss of our housing stock, and creating meaningful public spaces.

And AB1265 is one way to bring preservation into neighborhoods as part of the development portfolio. Lastly, I want to say that AB1265 changes the balance of power and brings economic incentives and affordable housing where it would not otherwise exist.

The incentive has been used in communities such as Inglewood, where the Forum was rehabbed, or the Harbor House, an affordable housing project in San Pedro, or the historic Angeles Funeral Home in LA built by Paul R. Williams that was rehabbed into affordable housing as well.

It would be instrumental in restoring and reviving the Watts Happening Cultural Center in Watts. Chair Gibson and Assemblymember Haney I ask that you consider the positive impacts that AB1265 has on, on the communities where I live, work, and serve.

Communities that deserve to be recognized and celebrated for their historic contributions and saved and revitalized using those same contributions and respectfully urge you to support AB1265. I know you already supported them.

Thank you very much. Anyone in the room wishes to speak in support of Assembly Bill 1265, would you please come to the microphone? Hearing and seeing none. Primary opposition, would you please come forward? Hearing and seeing none. Anyone in the room wishing to speak in opposition to this measure 1265 and come to the microphone.

Hearing and seeing none. We're going to bring it back to the Committee. Any questions for the author, for the witnesses? Hearing and seeing none. Oh, wait a minute. Ms. Quirk-Silva.

Let the author know and the supporters how I appreciate this Bill. This certainly is, again, part of a piece of the puzzle for housing in California. These graphics are excellent in showing what could be done. There's many historic properties listed here, but there's even more.

I know I had a chance to actually visit a few places. I know there's the Los Angeles Hospital that they're talking about turning housing into, but I was actually at a state prison in the south where they have a huge structure that they're trying to get on a historic list.

And it could provide close to 1,000 units of transitional housing for individuals leaving prison. So I think there's a lot of opportunity here and I definitely support this and appreciate it. Thank you.

Thank you very much. Any additional questions from the dais? I want to say thank you very much for bringing this measure before us. Mr. Haney, you may close.

I appreciate that we have so many incredible historic buildings in our state. We should preserve them and also make sure they're utilized. That's often very expensive, but the benefits are tremendous for our communities and for our state. And this tax credit is a part of that puzzle to getting that done.

So at the right time, respectfully ask for your aye vote or I don't know if it's suspense or how it works, but hopefully it will get out of the Committee at some point.

Thank you. Thank you very much. This will be referred to our suspense file. And thank your witnesses for coming and appearing and speaking in support of this measure. Thank you very much. Thank you.

Thank you.

Thank you.

We'll move to file item number three, AB1377. Ms. McKinnor, you are up to bat. Your witnesses can please come and take a seat at the table. No witnesses.

You guys just get me today.

Okay. And you may begin when ready.

Good afternoon, Mr. Chair and Members. AB1377 builds on the important work of expanding the state's film and television tax credit program by requiring studios who opt in to participate in optional diversity, equity, inclusion and accessibility tax credits to actually complete the plans that the studio themselves develop and submit to the California Film Commission. It's simple math.

If a studio chooses to apply for the additional DEIA tax credits, they actually need to do the work they are committing to do. Currently, studios only have to demonstrate a good faith effort to accomplish diversity goals in order to receive these additional tax credits. And frankly, just a good faith effort is not good enough.

It is a false choice for anyone to say that California has to choose between retaining and growing jobs in the film and television industry and increasing the diversity of its workforce. The film industry can and must do both.

It is time to declare lights, camera, action for everyone that wants to become a part of the California film and television industry. I respectfully ask for your aye vote.

Thank you very much. Anyone in the room wishing to speak in support of Assembly Bill1377, would you please come forward? Name organization and this is support.

Ivan Fernandez with the California Labor Federation in support. Thank you very much.

Any primary opposition to Assembly Bill 1377, would you please come? Hearing and seeing none. Anyone in the room wishing to speak in opposition? You have the same right. Hearing and seeing none. Want to bring it back to the Committee. Any Committee Members have any questions? Mr. Carrillo?

No question. I just want to thank the author for bringing this forward and for continuing to be a champion in this issue. It is important that the industry provides equitable job opportunities in all our communities. I want to thank you for that.

Thank you. Thank you, Assemblymember.

Thank you very much. Ms. McKinnor, you may close.

I just want to say that this Bill is supported by the California Federation of Labor and also the Entertainment Union Coalition. And with that, I respectfully ask for your aye vote.

Thank you very much. This Bill is a vote item. Members, do I have a motion? Moved by Mr. Carrillo and by Ms. Sharon Quirk-Silva. This motion is do pass as amended to the Appropriation Committee. This Bill is moved to Appropriation Committee. Stand corrected. So with that being said, Madam Secretary, please call. I'm sorry.

Almost got the vote. Oh, yeah.

Madam Secretary, please call the roll.

[ROLL CALL]

Thank you. That Bill is out 6-0. Thank you very much. Ms. McKinnor.

What? Oh, 50.

Stand corrected. That Bill has five, five to zero. What would we like to get, missed turn? 1260. Ms. McKenna? 1265. Okay.

[ADDENDUM TO ROLL CALL]

The final count on 1265 is five ayes and one no. That Bill gets out. Thank you.

What? 1265 is a suspense.

No, it's 1377.

My apology. 1377. That Bill gets out five to one.

But we are now at five. File item number four. AB 1416. Mr. Ta, would you please like to present?

Good afternoon, Chair and Member of the Committee. AB1416 is very small but really good fix for homeowner facing a crsis. Under current law, a property owner who is behind on their taxes is able to request an installment plan to pay all back tax which must first be approved by a local tax assessor.

In the event of a state-declared disaster, the assessor may grant one year deferral of payment due, but only if the installment plan had been previously approved. AB1460 expressly authorized assessor to grant a disaster-related deferral if an installment plan had been requested by the property owner.

AB1416 would ensure that victims of disaster are not caught up in the bureaucratic process before obtaining much-needed relief through a temporary tax deferral. During an emergency, the last thing a homeowner want to do is return to their home to find it being sold because their request was not approved prior to disaster. I respectfully ask for your aye vote on AB1416.

Thank you very much. Any witnesses in the room want to speak in support, please come to the microphone. Hearing and seeing none. Any primary witnesses in opposition to 1416? Would you please come to the front and join us at the table? Oh, you were moving this way. Okay, no problem.

Anyone in the room wishing to speak in opposition of 1416. Hearing and seeing. Now I want to bring it back to the to the dais. Any questions for the author? It's been moved in, well no, yes. Was going to ask you if you'd like to close.

Okay, thank you. I respect him to ask for your aye vote. Thank you.

Thank you very much. Mr. Demaio moved. Ms. McKinnor second. Madam Secretary, please open the roll.

[ROLL CALL]

That measure passes 7-0. Thank you very much. We'll be moving into our suspense. Before we take up items on the suspense file, I would like to take a step back from the individual bills and make a few general comments and also observations.

The Assembly bills currently on suspense proposed policy changes that would reduce revenue by $19.9 billion in the 2025-2026 fiscal year, just over 17 billion in the 2026 and 2027 fiscal year, and over 18 billion in the 2027-2028 fiscal year.

It should be noted that this estimate is only the, only at the low end as it does not include revenue reductions resulting from changes to the property tax law. Let me be, let me repeat that figure.

This Bill currently on these bills currently on suspense propose policy changes that would result in revenue loss to the State of approximately $20 billion in first fiscal year. I know that these bills are well intended and the affordability is top of minds for my colleagues here, our speaker and also this Committee as well.

However, we do not lose, we cannot lose sight of the fact that tax expenditures are a form of spending. And that's just the reality. The more we spend through tax codes, the fewer resources we have to allocate in the budget process to address important priorities of this state.

More tax expenditures means fewer teachers in classrooms in our school districts, fewer services for Californians who live with disabilities and fewer public safety personnel to keep us safe. It is true that Californians are struggling with high costs, but let me be clear what is driving those costs that we have today?

The catastrophic Trump tariffs which are regressive consumer tax that affect poor and middle class families the most, with cost of families, with costs families thousands of dollars in increase of costs. These tariffs lead to dramatic drop in cargoes entering our ports which will affect workers and the transportation and the logistics, specifically here in the Golden State, the home that we call Southern California.

Tourists from abroad is declining rapidly because of the crucial immigration policies and inflammatory rhetoric coming out of Washington D.C. the stock market has seen some of the largest decline in history because of the uncertainty this Administration has created.

Given all of these challenges and the multiyear a projected budget deficit, we must be thoughtful and think about the long-term gain that faces this state. I think there was a great conversation on the floor about the long-term gain in this country and especially the has an impact on California.

It is the responsibility of this Committee to prioritize those tax expenditures that are most aligned with our state's public policy goals. With this in mind and having dealt with all the items under the regular business order, the regular order of business portion of this hearing, we will now take up bills on the suspense. File in file item order.

File item number one. AB564. The chair is recommending an aye vote. The aye vote and the motion is do pass as amended to apply a five year sunset to the, to reduce the rate and add Section 41 requirement. Do I have a motion? It's been moved by Mr. Demaio and seconded by Ms. Quirk-Silva.

This is do pass as amended to the Committee on appropriation. Madam Secretary, would you please call the roll.

[ROLL CALL]

That Bill is out 6 to 0. File item number two. AB1265. AB1265. We'll be making that a two year Bill. Housekeeping. We will now move into items that were referred to the suspense at one of our prior hearings. We will start with File item number five. AB27. Ms. Schiavo.

The chair is recommending an aye vote and the motion is do pass to Appropriation. May I hear a motion? Second. It's been properly moved by Mr. Demaio and seconded by Mr. Ta. Madam Secretary, please call the roll.

[ROLL CALL]

That bill's out by 7-0. File item number six. AB53. The chair is recommending aye vote. Do I have a motion? It's been moved by Ms. Quirk-Silva and seconded by Mr. Ta. The motion is do pass to the Committee on Appropriation. Madam Secretary, please call the roll.

[ROLL CALL]

That Bill is out 7-0. File item number seven. AB97. The chair is recommending aye vote. Do we have a motion? It's been moved by Mr. Demaio and seconded by Ms. Quirk-Silva. Motion, this motion is a do pass to appropriation. Madam Secretary, please call the roll.

[ROLL]

That Bill is out 7-0. Next is file item number eight. AB12. Excuse me. AB231. The chair is recommending aye vote. Do we have a motion? Moved by Quirk-Silva, second by McKinnor. And we're dealing with item file item number eight. AB231. This is do pass to Appropriation. Madam Secretary, please call the roll.

[ROLL CALL]

That Bill is out 7-0. File item number nine. AB232 of Calderon. The chair is recommending aye vote. Do we have a motion and a second? Been moved by Mr. Ta and second by Ms. McKinnor. The motion do pass to Appropriation. Madam Secretary, please call the roll.

[ROLL CALL]

That Bill is out 7-0. File item number 11. AB389 will be held in Committee file item number...

Wait a minute. We skipped one. 386.

One moment while we...oh, down at the bottom. I'm sorry.

Going back to the file. File item number 10. AB386. Tangipa. That Bill is held in Committee. File item number 11. AB389. That Bill will be held in Committee. File item number 12. AB429. Hartwick. The chair is recommending an aye vote, aye vote with amendments to remove provisions related to Park Fire. Do I have a motion?

It's been moved by Mr. Demaio. Second by Quirk-Silva. This motion is do pass as amended to the Committee on Appropriations. Madam Secretary, please call the roll.

[ROLL]

That Bill is out by 7-0. We're at file item 13. AB490. Tangipa. That Bill will be held in Committee file item 14. AB547. Tangipa. The chair is recommending an aye vote with the amendments to refine and define the quali-, the qualified expenditures and revise an operative date to make the credit available prospectively only.

Do we have a motion. It's been properly moved by Mr. Demaio and second by Mr. Ta. Motion to pass to Committee on appropriations with the amendments. Madam Secretary, please call the roll.

[ROLL CALL]

That Bill gets out 5 to 1. File item 15, AB613. Mark Gonzalez. The chair is recommending an aye vote with amendments to remove the provision related to not-for-profit businesses. Do we have a motion? Mr. Ta. Motions? And second by Quirk-Silva. Again is file item 15, AB613. The motion is do pass to with amendments to the Committee on appropriation. Madam Secretary, please call the roll.

[ROLL CALL]

Six to zero. That measure passes. File item 16, AB691 will be held in Committee. File item 17, AB814. Schiavo. That Bill will be held in Committee. File Item 18, AB834. Hardwick. That Bill will be held in Committee. File item 19, AB838. Ta. That Bill will be held in Committee. File item 20, AB895. That Bill will be held in Committee.

File item 21, AB918. Ransom. That Bill will be held In Committee. File item 22, AB976. That Bill will be held in Committee. File item 23, AB984. That. The Chair is recommending. The Chair's recommending an aye vote. Do I have a motion on file item 23, AB984.

It's been properly moved by McKenna. Second by Ta. The motion is do pass to Appropriation. Madam Secretary, please call the roll.

[ROLL CALL]

That measure passes 7-0. File item 24, AB1057. That Bill will be held in Committee. File item 25, AB1219. That Bill will be held in Committee. File item 26, AB1282. That Bill will be held in Committee.

File item 27, AB1354. That Bill will be held in committee. File item 28, AB1431. That Bill will be held in committee. File item 29, AB1435. That Bill will be held in committee. File item 30, AB1481. That Bill will be held in Committee

File item 31, AB1485. The chair is recommending aye vote. Do we have a motion on AB1485? It's been moved by Mr. Demaio. Second by Mr. Ta. The motion is do pass to Committee on Appropriation. Madam Secretary, please call the roll.

[ROLL CALL]

That bills out 7-0. I want to thank the Committee for your diligence and your patience in this process.

I believe everything's done. Do you want me to check?

We want to take a minute to see if we have any members who have, who are absent and want to add on.

Hold on. I'm going to look at the regular order next just to make sure. Yes, I have everything.

Again, just want to say thank you very much. Rev and Taxation, Revenue and Taxation Committee stands adjourned.