Assembly Standing Committee on Revenue and Taxation

We can also have the surgeon call the offices and members who aren't here yet to say we are going to start at 3:30. We wouldn't be recessing, we'd be starting because we haven't, we don't have a quorum yet. So.

But can I open and then just make the announcement and say we're gonna.

Yes, yes. Well, we're not going to recess because we haven't started yet. Okay. So, I would just say we're going to convene it 3:30. You can always go after 2:30. It's just before.

In light of the Senate is started at 2 o' clock and the Senate is in session right now, the Revenue and Taxation will convene at 3:30, giving the Senate enough time to finish their presentations and we will be able to start hopefully at 3:30.

I will ask the sergeant of arms here to contact the Senate office and let the Senate office know that to please contact the Senate office and let them know that we will hopefully start at 3:30.

And the members who aren't here: committee members.

And let the committee members know who are here that we will start at that time. Thank you.

The Revenue Taxation Committee. Again, it appears that the Senate is still in session, so we will extend it into four o' clock. So please bear with us. We will convene the Revenue taxation Committee at 4 o' clock, giving the Senate enough time to finish their floor session and have the first Senator report to Revenue and Taxation Committee.

At that time, we will direct the Sergeant of Arms to please contact the Senate. And please let the Senate know of the decision of the Chair to give them to 4 o' clock to get over here after they have adjourned and Committee Members to get over here at 4:00. Thank you very much.

And welcome to the hearing of the Assembly Committee on Revenue Taxation. Before we begin, I would like to welcome first of all Assembly Member Juan Carillo, recently appointed to the Committee by Assembly by our Speaker Robert Rivas. I want to pause to give him a moment to just say a few words if he wish.

Thanks Mr. Chair. Just looking forward to working with you and with all of you.

Thank you very much and welcome. Advocates. Please remember to submit your position letter through the porthole at least one week prior to the hearing in order for your organizational position to reflect of the onto the Bill analysis Bills for Bills for each Bill will be allowed two primary witnesses, both in support and opposition.

Each witness will have up to two minutes to each person have up to two minutes to speak in opposition or and also in support. We will ask for additional individuals to speak in support.

I will ask for you to speak giving your name, your organization and your position at that particular time will ask you to step to the microphone at the appropriate time and again just your name, your organization and your in support or opposition.

Pursuant to our Committee rules, bills with a fiscal impact greater than or greater than 150,000, whether that's a revenue gain or loss, will be will not be eligible for a vote immediately after the presentation. It will be referred to our suspense files according to accordingly and only for today's agenda we will be hearing one Bill.

File item number one, SB 87. That Bill would be taken up for a vote today. All other bills will most likely go on suspense. So with that we can operate as a suspense as a Subcommitee until we establish a quorum.

With that being said right, we will go to item number File item number four, SB359 and we have an author here, Senator Niello. You may proceed when ready.

Thank you very much Mr. Chair, for the ability to present SB 359. It is a simple but really necessary clarification to ensure fairness and how sales and use tax exemptions are applied to transit fuels.

This Bill establishes clear guidelines for the California Department of Tax and Fee Administration CDTFA, confirming that the existing tax exemptions for fuels like diesel and compressed natural gas used by public transit operators also apply to counties that operate their own transit services directly.

Several counties in California run their own transit systems through county departments such as Public Works or Community Development. These are not independent transit authorities, but they perform the same public service. Due to a lack of clarity in current law, these counties are sometimes required to pay taxes on transit fuel from which other transit operators are exempt.

However, CDTFA has not consistently collected this tax from any county public transit. This is an inconsistency that results in unfair treatment of some county public transits. These counties have never budgeted for this tax because they historically they haven't had to consistently pay for it. The small rural counties in particular.

An unexpected cost estimated for small rural counties to be nearly $100,000 can significantly affect local transit budgets and services. SB 359 amends sections 60039 and 8655 of the Revenue and Taxation Code to explicitly include county run transit systems in the fuel tax exemption.

The adjustment in the code will not result in a loss of revenue for the state because the state has not really been collecting it. This is about fairness and protecting essential transit services in our counties. We ask for your support to ensure that the counties are provided public transit and held to the same standard as their counterparts.

I have with me today Joel Joyce, Legislative and Government Affairs Coordinator and County Executive Officer for the County of Placer.

Thank you very much.

Good afternoon. Chair Gibson, Vice Chair Ta and Members of the Committee as Senator Niello mentioned, my name is Joel Joyce. County to express a strong support For.

Senate Bill 359 by Senator Niello, Senate Bill 359 corrects an inequity in the Administration of diesel and fuel tax law that is having a direct and negative impact on counties such as Placer that operate their own public transit systems.

This Bill makes a straightforward but meaningful clarification that counties operating transit systems should be included in the existing exemption from diesel and compressed natural gas fuel taxes and exemption that currently applies to cities, transit authorities and districts. For decades, Placer county has operated our own transit service through our Department of Public Works.

Historically, we were not charged this tax as it was understood that as a public transit operator we fell within the scope of the exemption.

It wasn't until the transition from the State Board of Equalization to the California Department of Tax and Fee Administration that we were audited and told that we were not eligible because the word county does not appear in the statutory language.

Once we learned of this, we worked backwards to understand the basis of the ruling and quickly realized that the underlying statute had not been updated to reflect the modern structure of transit service delivery in the State of California. When these laws were originally written, transit systems were operated exclusively by cities and special districts.

That's no longer the case. Today, counties are directly providing transit services to fill critical regional gaps, address equity affordability and reduce traffic congestion In Placer County. We've even introduced several fare free Services to better serve residents, especially in underserved and rural areas. SB 359 does not create a new tax expenditure.

It simply ensures that all public transit operators, regardless of the governance structure, are treated fairly under the law. Additionally, we are not seeking retroactive relief. We are only asking to be treated equity equitably going forward. For these reasons, Placer county is proud to sponsor and strongly support SB359.

We appreciate Senator Nelo's leadership on this issue and urgent Committee support for this Bill. Thank you for your time.

Thank you. We're going to pause a moment and establish a quorum. Madam Secretary, please establish a quorum by calling the row.

[Roll Call]

A quorum has been established. Is that your last witness? Great. So with that, I want to open the room up for anyone in support. You please line up to the microphone. Again, just your name, your organization and this is support.

Mr. Chair. Members Michael Pimentel here on behalf of the California Transit Association in support. Thank you.

Thank you.

Good Afternoon, Mark Newburger for the California State Association of Counties in support.

Thank you very much. Primary witness in opposition, please hearing and seeing none. Anyone in the room in opposition to Senate Bill 359 to please come. Primary witness in opposition, hearing and seeing now when I bring it back to the Committee. Any Committee Members wishing to speak.

Thank you very much. This Bill will be referred to our suspense file. Thank you very much. We will go to File line number five, SB603.

Senator, you may close. I respectfully ask for an aye vote.

Thank you. Thank you again, Mr. Chair. And thanks again to Senator Seyarto, Alvarado, Gill, and Perez for allowing me to go now. I am now going to present SB603.

Existing property tax law already provides that the property tax base year value of real property that is substantially damaged or destroyed by a Governor declared disaster may be transferred to a comparable property located in the same county that is acquired or newly constructed within five years after the disaster as a replacement property.

This has been of benefit to homeowners who are navigating a very difficult time dealing with a disaster and the rebuilding process affecting their property. Recent fire events have shown that five years is proving to be a difficult timeline to get replacement property built.

In recognition of this dilemma, the Legislature has extended the five year period numerous times after specific disaster events. Given the unprecedented wildfires in Los Angeles area this year. It's going to be a huge challenge to see any rebuilding completed in five years.

It's time for the Legislature to consider allowing local land use and tax use authorities to make this decision on an ongoing basis. Whether it's fires, floods, mudslides, earthquakes. Local boards of supervisors are closer to the problems affecting their communities and can adjust the time period if necessary.

SB603 authorizes the county Board of Supervisors of any county affected by a disaster declared by the Governor on or after January 1st of this year, to extend the five year time period to transfer property based value years year values by up to three years for properties located in that county today.

With me to testify is Rob Grossglauser from the California Assessors Association to testify support.

Thank you very much. You have two minutes. Thank you Mr. Chair. Rob Grossglauser behalf of the California Assessors Association. We appreciate this measure and thank the Senator for bringing it forward.

We believe the localized flexibility for counties allows them to appropriately face and try to address the unique challenges and recovery conditions that they might be facing and urge your support. Happy to answer any questions but thank you.

Thank you very much. Anyone in the room wishes to speak in support of Senate Bill 603. Would you please come forward. Need your name organization and this is support.

Good afternoon. Amy Garrett with the California Association of Realtors in strong support of the measure. Thank you.

Thank you very much. Anyone in opposition of 603 to please come primary opposition hearing and seeing none. Anyone in the room wishing to express opposition to this measure, would you please, you have the same right. Bring it back to the Committee. Committee Members have any questions? No. Oh Ms. Quirk-Silva.

No question. Just appreciate the legislation. This certainly has been a challenging time. Not just the Los Angeles fires but we can go up and down the state and see various not only fires but natural disasters. And allowing the supervisors to have some flexibility seems very reasonable and whatever we can do to add to that.

So with that we're not moving it because we're not taking a vote but I definitely support it. Thank you.

Thank you very much for your comments. Senator, you may close if you wish.

I would say that Assemblymember Quirk Silva provided an outstanding close for me. I request for an aye vote at the appropriate time.

Thank you very much. This Bill will refer to our suspense file. Thank you very much for appearing to the Revenue Taxation Committee. Thank you very much and hope you get to your event on time. File item number one SB 87 Mr. Seyarto. Good to see you again.

It's nice to see you too. Thank you. Honorable chair, I am here to present SB87. First, I'd like to thank the chair and the Committee for staff for working with my staff on this important measure. Currently, the sales tax exemption for all volunteer fire departments fundraising activities is set to expose expire on January 12026.

However, my Bill will extend this for another five years. Under current law, all volunteer fire departments are classified as consumers rather than retailers. So they are not required to collect or pay sales tax on the fundraising activities. These fundraising activities, such as pancake breakfast and T shirt sales are crucial for these volunteer fire departments.

For example, the Lahandal volunteer Fire Department relied on these fundraisers to help purchase a $500,000 engine. Which is sad that they cost that much these days. Actually, they cost a million now

Since 2015, this exemption established by SB598 by Senator Hill has helped more than 200 all volunteer fire departments in California better fund their essential equipment and operations. This Bill will provide stability for these community servants who rely on fundraising to maintain their life saving operations. And I would respectfully ask for an aye vote.

And as you can see, this empty chair represents my witness. There is none.

Thank you very much. Anyone wishing to speak in support of SB87, would you please line up? Name, hearing and seeing none. Anyone? Primary witnesses in opposition, Hearing and seeing none. Okay, bring it back to the Committee. We're just going to cut right through. It's been properly moved. It's been properly moved. And second by Ms. Quirk-Silva.

Any questions from the Members, you may close.

I respectfully ask for an aye vote.

Thank you very much. Madam Secretary. Please call the roll. I'm sorry. Due pass to Appropriations. My apologies.

[Roll Call]

That Bill has sufficient votes. 5-0, that Bill gets out. Thank you very much. Thank you very much. File item number two. SB293. Perez. Oh, there you are.

Let's see if I can bring Senator Seyarto to his record.

You may proceed when ready.

Alrighty. Good afternoon, chair and Members. SB293, the generational homeownership Protection act will ensure that homeowners who have lost or sustained damage to their homes in a declared emergency can update their property transfer records without unnecessary barriers. During the rebuild process, Altadena experienced the worst of the devastation from the Eaton fire which destroyed nearly 10,000 structures.

While the physical damage was extensive, we didn't realize that many homes, particularly in Altadena's historic black community, were passed down within families, often without proper title transfers. For many of these families, the absence of formal title records has created additional barriers to rebuilding after the Eaton fire without the proper property transfer documented.

Existing law allows properties impacted by a wildfire to be reassessed based on its disaster impacted value.

Existing law also provides protections to ensure that homes passed down from parents to children or grandparents to grandchildren remain exempt from reassessment to current market value so long as the necessary reassessment forms are submitted within six months of an owner's passing or official transfer date.

Without recorded property transfers, homeowners are ineligible to qualify for these property tax exemptions under current law or receive financial assistance for disaster recovery, something that is incredibly important to my constituents, putting families at risk of losing these multi generational homes.

Families who inherited homes without formal paperwork may now face back taxes on the property in addition to the cost of rebuilding, resulting in an overwhelming financial burden. To address these challenges, I introduced SB293, which enables disaster impacted homeowners to update their property records without penalties to ensure they have a safe, seamless rebuild of their home.

Specifically, this Bill extends the deadline for filing a property transfer under current law from six months to three years, providing families with additional time to secure their exemptions.

SB293 also prevents property owners from retroactive reassessment if the property owner meets the following one the property was damaged or destroyed in a qualifying declared emergency 2 the owner already has a clear title to the property and 3 the property meets criteria for an intergenerational transfer under applicable statutes.

SB293 is urgently needed to protect these families and preserve the cultural and historical identity of the Altadena community. With me to testify is Rob Grossglauser. I hope I didn't chop up your name. On behalf of the California Assessors Association at the appropriate time, I asked for an aye vote.

Please. Thank you, Mr. Chair. Members Rob Grossglauser first off, I'd like to express strong support by Los Angeles County Assessor Jeff Prang, as well as the anticipated support of the California Assessors Association. As with the amendments went into the Bill last week, they'll be voting on a position formally tomorrow.

We anticipate their support, agree with all the statements made by the Senator. Thank you for bringing forward the Bill. Would like to ask for your support as we think it's a compassionate solution to the fire victims and we think we can administer it fairly and equitably happy to answer any questions. Thank you.

Thank you very much. Really appreciate that short testimony. Any witnesses in the room in support of 293, please line up. Name organization and this is support.

Good afternoon chair and Members. Elise Forth here on behalf of the California Community Foundation in strong support. Thank you.

Thank you very much. Any primary witnesses in opposition of 293 to please come and take a seat at the table. Hearing and seeing none. Anyone in the room wishing to express their opposition to this measure? 293, you have the same right. Hearing and seeing none. I want to bring it back to the Committee. Ms. McKinnor.

Yes. To the Senator. I appreciate that you're bringing this Bill. The families in Altadena definitely appreciates this. Taking care of those African American families, that is their generational wealth and this is so needed. And we really, really are glad that you're carrying this and I would love to be a co author. Thank you. Thank you.

Yes. Ms. Quirk Silva

Also, thank you. This is so important when we think about the trauma these families have endured and we've said this before, but all of us are one fire away from being in this situation because I'm assuming that many, many of us do not have all of our documents in order as we think we do.

And as someone who's getting closer to retirement, we're really starting to look at this and I think it's very clear to me that we rely on a lot of documents and so often we're not as organized as we imagine.

And then when you put a disaster on top of it and everything that it takes to find these documents and sadly even we're finding nationally that as people are under duress for, for many other reasons, finding records for their children, school records, health records, all these records that need to be in place for emergencies is something that most of us don't have.

So I really appreciate this because six months seems like a lot of time, but really isn't when you're starting to look at working with agencies, even something as simple as getting your child's transcripts from schools, you think that that would take a week or two or three. It can sometimes take two or three months.

So I appreciate it and I know you've walked right into all of this and you're doing excellent work. Great job, Senator. Thank you.

Thank you. Senator, just one quick question. The analysis noted a number of considerations related to the broad authorization in the Bill. Are you willing to work with the Committee to re to refine the provisions in the Bill.

Yeah, absolutely. You know, I think we obviously want to be very mindful of the fact we know that taxes fund all of the great services, you know, that we provide here in the State of California.

And so mindful that as we change and reduce those things, that it does have an impact on our ability to provide that service. But we want to be really intentional here with making this for cases of natural disasters. And that's really the goal and the focus of this legislation. So, you know, absolutely.

Great, Wonderful. Thank you very much. So this Bill will be referred to our suspense file. And thank you very. Oh, I'm sorry. Please forgive me. Would you like to close?

Respectfully ask for an aye vote.

Thank you very much. This Bill will be referred to our suspense file. Thank you very much for appearing before our Committee. Next we'll have fallout number six, SB 723. Mr. Choice. Senator. Oh, my apologies. Excuse me. No, we have Alvarado-Gil. I apologize, Senator. We have SB follow number three, SB 353. Senator, thank you very much.

Thank you.

Appreciate you being here. And you may begin when ready.

Right. Well, we'll keep this short and sweet. I am presenting Senate Bill 353, which will extend the existing Farm to Food Bank tax credit, which offers a 15% tax credit to farmers who donate food to local food banks.

The current tax credit is set to expire in 2027 and this Bill would extend the tax credit for another five years until January 2032. I'd like to thank the chair for offering his amendments to make this Bill even stronger.

This credit encourages donations of fresh produce and nutritious items such as fruits and vegetables, meat products, dairy products, eggs and grain. The Farm to Food tax credit was initially enacted in 2012 through AB152, and this program has proved its effectiveness and is still going strong today.

In 2023, this credit resulted in $8.2 million worth of donated food going to food banks, with over 769,000 in tax credits given back to participating farmers. This Bill is about long term foods, food access and agricultural sustainability. Making this tax credit permanent makes it possible for food banks and farmers to to plan for the long term.

Food banks can also plan their collections and giveaways around regular fresh donations. Additionally, this Bill will help address food insecurity, especially in rural and underserved communities, by ensuring that fresh, healthy food gets into the hands of those who need it the most.

According to the California Association of Food Banks, 22% of California households and 27% of households with Children struggle to put food on the table at the same time. This credit will allow to eliminate food waste and save food products that farmers can sell that they can't sell but are good enough quality to donate.

This program has a strong track record of transparency and accountability. The donations are documented, reported, and verified. It's a targeted, efficient use of state funds that yields high positive community results, helping families put healthy food on the table and reducing the pressure on food safety.

So with this Bill, there's no question that the food that is going to the people that need it most is helping our community at large.

Thank you very much. Any witnesses?

I don't have witnesses with with me today, but I'm happy to answer any questions that the Committee may have.

Thank you very much. Anyone in a room wishing to speak in support of 353, would you please line up.

State your name, organization, and this is support.

Erica Parker with Californians Against Waste and strong support.

Thank you very much. Any primary witnesses in opposition to SB353? You have an opportunity to come and speak in support, I mean opposition. Hearing and seeing none. Anyone in the room in opposition? You have that same right. Bring it back to the Committee. Committee have any questions? None. You may close.

Thank you. I'd like to thank the Committee chair as well as the staff for working on this Bill to make it strong and resilient with the built in oversight and proven results. Thank you. This is a low risk, high impact Bill. I kindly ask your aye vote.

Thank you very much. This and thank you also for accepting amendments. This Bill will be referred to our suspense file. And thank you for very much for appearing before.

Thank you so much.

Have a great evening. Mr. Choi. Senator Choi, you are up next. File item number 6. SB723. You may begin when ready.

Good afternoon Chairman Gipson and Committee Members. Thank you for the opportunity to present SB 723. SB 723 proposes a significant update to California's property tax law by allowing local government to increase the threshold for tax exemptions on low value properties. Adjusting this threshold reflects today's asset values and inflation. Aligning tax policy with economic reality.

Raising the limit helps reduce the tax burden on smaller businesses, freeing up capital to reinvest in jobs and growth. Low value properties often cost more to assess and collect tax on than the revenue they generate. Increasing the threshold cuts wasteful spending on low and low yield tax collection.

SB 723 ensures tax scale property, small scale property owners and the low value asset holders earn or overburdened and can begin to grow and spur economic development. Reducing tax burdens on low value assets encourages entrepreneurship and economic resilience in communities statewide. Oftentimes, small business people will realize that sometimes it's called as unsecured property tax for the items.

Like a desk computer, they have paid taxes year after year. They have to keep on reporting and keep on paying the tax upon the tax already that has been paid for the same item. So therefore, I think this Bill will definitely help many small business owners and the low property value owners.

Thank you very much. Any witnesses you have with you?

No, I don't.

Okay, thank you very much. Any witnesses in the audience wishing to speak in support of SB723, would you please come to the microphone and okay. Name organization and this is support. Hearing and seeing none. Any primary witnesses and audience in opposition, would you please approach? Hearing and seeing none. Anyone in the room in opposition to SB 723?

Hearing and seeing none. Any Members at the dais wishing to ask any questions? Okay, hearing and seeing none. Miss, I have a question. Will you be willing to work with the Committee staff to address technical considerations highlighted in the analysis?

Of course.

Thank you very much. You may close if you wish.

I would appreciate your kind consideration. And as an aye vote, thank you very much.

This Bill will be referred to our suspense file. And thank you very much for appearing before this Committee. Thank you very much. Our final Bill will file out number seven, SB785. Cabero. Thank you so very much. Senator, you will close us out this evening. Well, thank you very much.

Thank you very much, Mr. Chair and Members for the opportunity to present SB785. I want to thank the Committee and the chair for their work on the Bill and I'll be accepting the Committee amendments.

SB785 would establish a $5,000 tax credit to help offset the costs associated with durable medical equipment, or DME, for babies and children with complex medical conditions. DME such as wheelchairs, ventilators, mobility aid, specialized monitoring devices, feeding devices are vital tools to maintain the health of a child with complex medical needs and to manage their routine, everyday tasks.

Children who have these complex health needs do best at home, but only if they have access to the critical medical equipment that keeps them safe and healthy and out of the hospital. With me today to testify in support is Peter Kellison, representing both the Pediatric Day Health Care Coalition and the California Association for Health Services at home.

Thank you, Mr. Chair and Members. Peter Kelliston. On behalf of the PDHCCS and Casa, I'll be very brief. The Bill targets the roughly 40,000 extremely medically fragile children in California and their families will enable them to potentially deduct up to $5,000 in DME. DME prevents hospitalizations.

If this Bill were to prevent 200 hospitalizations, it would probably save more than the Bill costs. Happy to answer any questions.

Thank you very much. Appreciate that. Anyone in the room wishing to speak in support of 785 would you please give me your name? Organization and this is support.

Mr. Chair. Members Rand Martin on behalf of Aviana Healthcare, one of the larger providers of services to this population, in very strong support of this Bill. Thank you. Thank you.

Chair and Members, Norland Asbrick here on behalf of Prime Home Health and Maxim Healthcare Services in strong support. Thank you.

Thank you. Any primary witnesses in opposition to SB 785, would you please. Okay. No one is here. Anyone in the room wishes to speak in opposition Hearing and seeing none we'll bring it back to the Committee. Anyone on the Committee wishing. Hearing and seeing none. Senator, you may close if you wish.

Thank you very much Mr. Chair. I had an opportunity to visit the daycare centers that take care of these, help to take care of these medically fragile children. And if you've ever visited one, you know that parents need as much help as they can get. And even with health insurance, these, these devices are very expensive and it's necessary to keep children alive. So respectfully ask your aye vote when you move things off. Suspense.

Yeah, right. Thank you very much. Speaking of which, this Bill will be referred to our suspense file. Thank you very much for appearing before this Committee. Thank you. All the business before the Revenue Taxation Committee have been completed. This Committee stands adjourned. Oh. Oh, I'm sorry. No, not.