Assembly Standing Committee on Revenue and Taxation

Wanna say—wanna say good afternoon, and welcome to the hearing of assembly committee on revenue taxation. We will be operating as a subcommittee. Wanna go over a few, ground rules. I want to hope that everyone has had a great spring recess. First, I would like to remind advocates that the deadline for your position letter is one week prior to the hearing.

Please submit support or opposition letters through the legislative court to the, to the legislative portal. It's on the website. Also want to remind everyone that the committee has a suspense file. Surprise. You will find that information on our website for the rules will be, again, will be posted there.

In summary, bills will—with a revenue impact of more than 150,000, will not be eligible for a vote immediately after the, the presentation. Instead, will be referred to that suspense file. Accordingly, no bills on today's agenda will be eligible for a vote. So, all bills today will be eligible for the suspense file. So, we do not have a quorum as of yet, so we will hold off on that.

I'm establishing a quorum until one is reached, so we'll be acting as a subcommittee. And so, we will ask our first presenter. We noticed that we have Assemblymember Nguyen here, so we will proceed with Assembly Bill 1606. Ms. Nguyen, you may approach and please have a seat. Your witnesses are present.

We will remind the witnesses you have two minutes each. And Ms. Nguyen, you may present when ready.

Thank you, Mr. Chair and members. I'm proud to present 1606, an important bill that supports small businesses that are dealing with cleanup costs they didn't create and May.

If you can bring the microphone a little closer to you.

May is small business month. So, what a perfect time to present this bill. This bill creates a five-year tax credit from 2027 to 2032 of up to $20,000 per year to help cover cost tied to illegal dumping, encampments, and abandoned property. These are real costs. Business owners are spending thousands of dollars just to keep their properties clean, safe, and open.

Some of these expenses can be deducted today, but that doesn't go very far when the costs keep coming back. This bill provides more direct relief. The credit is targeted. It covers cleanup costs like waste removal, sanitation, and repairs from damages. It does not cover ongoing maintenance, wages, or permanent upgrades.

It is also capped and time limited. This builds on work we introduced last year with updates to make sure it is more focused and more workable. Mr. Chair and members, we are committed to continuing to work with the committee on any amendments needed to strengthen the bill and make sure it works as intended. At the end of the day, this is about helping businesses deal with costs they should not be carrying on their own. With me is Audrey here on behalf of California Business Property Association.

Thank you very much. You have two minutes.

Thank you. Good afternoon, mister chair and members. Audrey Retajczyk from Cruise Strategies on behalf of the California Business Properties Association, and we're the proud sponsors of AB 1606.

We thank you to the committee for your continued work on this issue, and we appreciate the appoints raised in the analysis and look forward to continuing to work through them as the bill moves forward. Recent court decisions have led to increased enforcement in public spaces, which has pushed encampments in illegal dumping into private commercial properties. As a result, businesses, particularly small businesses and small mom and pop property owners, are now routinely forced to cover their costs of cleanup, including waste removal, property damage, and ongoing security.

These are reoccurring costs that many simply cannot absorb. AB 1606 provides a five-year tax credit covering 100% of those cleanup expenses, and it's a targeted practical solution that helps keep property safe, support small operators, and stabilizes commercial corridors.

So, we respectfully ask for your aye vote. Thank you.

Thank you very much. Any witnesses in the room wishing to speak in support of Assembly Bill 1606? Please line up. Your name, your organization, and this is support only.

Amber Madison, California Apartment Association, in support.

Thank you.

Megan Shumway from Arden Arcade, in support.

Thank you. Hearing and seeing no one else wishing to lodge their support for Assembly Bill 1606, any primary opposition to 1606 in the room, we invite you to come up. Hearing and seeing none, wanna bring it back to the committee. Any questions from committee members? Hearing and seeing none, Ms. Nguyen, you may close if you wish.

Thank you, Mr. Chair and members. Really hope that we can continue to help small businesses during this time of small business month. As legislators, we need to do everything we can to assist them, especially now during these times. And when the time is appropriate, I hope that we can get this out and move this forward. Thank you, Mr. Chairman.

Thank you, members.

Madam—okay. Thank you very much. This bill is a suspense candidate and thank you very much for appearing. We'll move to file item number two, AB 1611, Haney. Don't see Mr. Haney.

File item number three, Mr. Tangipa, AB 1714. We will move to file item number six, AB 1971, Mr. Bennett. We understand Mr. Bennett is not here. Mr. Lee will be presenting on his behalf. Welcome.

Do you have any witnesses, Mr. Lee?

I do not think so.

Okay. You may proceed when ready.

Alright. So I will be I'll be presenting for assembly member Steve Bennett. This is AB 1971. California is at a tipping point, 14 of the 20 most destructive fires occurred within the last ten years. And last year's historic LA fires have shown us that property resilience is no longer optional, but is necessary.

AB 1971 directs the board equalization to clarify that home Harding retrofits are not accessible upgrades, meaning they won't result in higher property tax. Comprehensive home Harding, which includes installation of ember resistant siding, multi pane windows, and a fireproof roof, and more can cost upwards of a $100,000. This clarity from the department incentivizes Californians to take real steps to protect their home without fear their property tax will increase.

Respectfully, asked for IVA on behalf of Assembly member Steve Bennett.

Thank you very much. And you said you have no witnesses in support. Okay. Anyone in the room wishing to speak in support of Assembly Bureau nineteen seventy one, would you please line up? Need your name, organization, and this is support for Assembly Bureau nineteen seventy one.

Amber Madison, California Apartment Association in support.

Thank you.

Vanessa Chavez with the California Building Industry Association in support.

Thank you.

Maggie Chamois, Sacramento Three Fifty in support.

I'm sorry? Or any opposition to this measure in the room? Hearing and seeing none, bring it back to the committee.

Thank you very much. Seeing no one else wishing to speak in support of nineteen seventy one, any primary opposition to this measure?

Any members wishing to speak? Mister Lee, you may close on behalf of mister Bennett.

Respectfully ask that I vote when the time comes.

Thank you very much. This item will be referred to our suspense file. Thank you very much.

Mister chair, I do have a bill later in the file if I can present that one as well. My own bill.

You yourself?

Yeah. It's.

Are you presenting on behalf of someone else?

No. I have a bill that's for myself as well if I—if you don't have any other officer. It's AB 2394.

You may presume—you may presume your, on your on your own bill. AB 2394.

Alright. Thank you, Mr. Chair and colleagues. I understand that this bill is going to the committee's suspense file for consideration at your April 27 hearing. The, however, I wanna elaborate on this bill. This is a bill idea I had when I was a staffer over ten years ago.

When the idea that people have owned and lived in their homes for decades may be ready to downsize and move closer to their grandchildren or children, but they are reluctant to do so because of the capital gains tax that they would owe.

The analysis points out a number of valid concerns with the bill in print, and I will be submitting amendments while the bill is in suspense to address those concerns. The amendments would do the following: lower the homeowner age to 55 to be consistent with the Prop 19 Property Tax Transfer Law; require the owner to have lived in the home for at least two years of the of the prior five years; require the home to be sold to a natural person.

And we would keep the minimum twenty years of ownership and the five year sunset. We will also be adding Section 41 reporting language to have the number of homes sold using the exclus—exclusion—and the property tax assessment increases for the affected properties. The analysis notes that people sell their homes for all sorts of reasons, and it is unclear how the tax benefit in this bill would really impact that. It's a fair point.

However, I look at it this way, that for homes that have already been locked off the market for decades because people have raised their family but are ready to move on to their next phase of life, the bill provides an incentive for them to sell their home to the next owners who can raise and start new families.

To me, this—the estimated revenue loss is worth the benefit of opening up these locked up homes to re, to new owners and families. In, in short, this bill is about incentivizing older homeowners who perhaps need to move on, trade, trade downwards, or downsize so that new families can move in.

This is especially true in my district. We have population declines leading to school closures because there are not enough new families where it doesn't make financial sense for them to sell a home at $1,800,000 to buy a home at $2,000,000 right now. So, this is about alleviating working class families, trying to create more liquidity in the market, and try to also reset some of the property taxation clocks on some of the very old properties.

I will respectfully ask for your aye vote at the appropriate time in the next committee.

Thank you very much. Do you have any witnesses? No witnesses. Anyone in the room wishing to speak in support of AB 2394, would you please line up your name, your organization, and this is support?

Good afternoon. Amy Garrett with California Association of Realtors. Very much looking forward to supporting this bill once amended, as is proposed today, and thanking the author for early and ongoing discussion on the bill.

Thank you very much. Anyone else wishing to speak in support of 2394? Hearing none. Any primary opposition? Please have a seat, and you have two minutes.

Hi there. Danny Kando-Kaiser on behalf of the California Tax Reformers Association. I'll just be very brief. Sorry, if you can hear me over the noise. We will look at the amendments.

We, we just were seeing those today. We still think that there are many benefits to tax—to, to homeowners—and may still be opposed, but for now, remain opposed. Thank you.

Thank you very much. Anyone in the room wishing to speak in opposition to 2394, would you please step to the microphone, your name, organization, and this is opposition? Hearing and seeing none, bring it back to the to the dais. Mr. Lee, you may close.

Respectfully ask for an aye vote when the time comes, and a bill to try to increase liquidity and to devise families to have more home homeownership opportunities. Thank you.

And thank you very much. This bill will be referred, referred to our suspense file. Thank you, witnesses on both sides for appearing before this committee. Thank you very much. I'm gonna start with file item one. Sure.

Then I can read them.

Since we have a quorum that's established, we wanna start off by a vote. Oh, formally referring—formally referring to the committee to formally referring these bills to the suspense file. Starting off with file item number one, AB—AB 1606—went to the suspense file. File item number 2.

On that order. Okay. File item number 6, AB 1971, Bennett, presented by Lee, to the suspense file. File item 10, AB 2394, Lee, to the suspense file.

Alright.

Nope. We did that.

Okay. Alright. File item 3. Now we'll be hearing file item number 3, AB 1714, by Mr. Tangipa. And you may proceed when ready. Any witnesses?

Alright.

We've got a few bills, so I think a couple of our witnesses may be behind a little bit. So, I can just get started.

Okay.

You may proceed when ready. Your witnesses will catch up with you.

Perfect.

Well, thank you, Mister Chair and Members, and thank you to the committee staff who prepared the analysis for us and for their work on this. One thing prior to really getting into the bill, I just wanted to make thing one thing clear when I speak about CALHFA and to let everybody know what CALHFA actually is. It provides financing and down payment assistance to low to moderate income first time homebuyers in California.

Some of the key requirements include a minimum credit score of 660 to six eighty, meeting specific county income limits, taking a home buyer education course, and occupying the property as a primary residence. So when I'm speaking about CalHFA today and some of the credits on this bill, I want you to think about who this is going to specifically help.

My experience prior to coming here is I was a realtor, and my business was specifically focusing on helping first time homebuyers break generational poverty through home ownership. I grew up in low income housing. I targeted areas like North Highlands and the Central Valley because we could afford here. Most of my friends and other people and other colleagues that I have worked with qualify for CALHFA trying to break generational poverty simply through asset ownership.

So AB1714 creates a targeted personal income tax credit for sellers who complete repairs that are required to a first time buyer using CalHFA assistance.

This bill is not about cosmetic upgrades, optional remodeling, or rewarding ordinary home improvements. It is narrowly focused on repairs tied that create artificial scarcity for first time home buyers. A lot of people think when they see this built is that it's just a credit to sellers. But really, it's a negotiation tool to help people who are the most disadvantaged, qualify, and have a foot in the door. As a realtor who's helped so many qualify for this program, we were losing negotiations time and time again.

Because when a seller has multiple options to go with, they chose the easiest one for them. And when people are qualified for a CalHFA loan, you have to have requirements on certain repairs that need to happen. So the sellers would not even give us a chance. When that happens, the buyer loses the home. Not because they were unqualified, but because a required repair became the barrier to closing.

AB41714 helps keep those transactions together by offering a limited tax credit equal to 40% of the qualified rep qualified repair expenses capped at 25,000 per taxable year. This bill only applies to repairs that are required as a condition of financing. It excludes cosmetic repairs, renovations, landscapes, and aesthetic upgrades. It also includes a five year sunset on con and contains reporting language so the legislature can evaluate whether it is working.

This bill is about preserving access to homeownership for first time buyers who are already doing the right thing, working with approved financing, going through the escrow process, and trying to purchase a home they can afford.

If a seller is more willing to complete those required repairs and keep the transaction alive, that benefits the buyer in the most concrete way possible. The sale closes and the buyer, somebody who qualifies for one of the lowest income protection loans out there. The buyer gets to benefit from this type of repair. Lastly, I just want to quickly add that we have been working with the realtors on their concerns, and I look forward to continuing working with them.

Thank you very much. Do you have any witnesses speaking in support? I see a familiar face coming to speak in support. Do you wish to Thanks. Okay.

So you have no primary witnesses?

No. No. I think they're missing. Okay. They didn't make

any time. Anyone in the room wishing to speak in support of 1714, should please come to the microphones, state your name, your position, and this is support?

Thank you. My name is David Bullock. I'm representing the SMP Alliance, and I am in support, or we are in support. Thank you.

Thank you very much.

Good afternoon. Danielle Bautista, authorized on behalf of United Way of Fresno Madera Counties to share their support for AB1714. Thank you.

Thank you very much. Hearing

Thank you. Mister Chair and Members, Kobe Pizzotti, with the California Association of Realtors. We have concerns with the bill as it is in print because it has language addressing as a condition of closing or a part of the transaction. We've worked with the author and his staff, and we'd like to say thank you very much for working amendments out with us to take them while they're on while the bill's on suspense. And as soon as we see them print, we'll remove our concerns.

Thank you.

Okay. Thank you very much. Anyone in the room primary opposition to this bill, would you please come and take a seat so we won't get confused so we know exactly who's doing what? Thank you very much.

Good afternoon. Can you hear me? Okay. Good afternoon. Danny Kando-Kaisler on behalf of the California Tax Reform Association, nonprofit organization of labor, public health, education, and public interest groups, which advocates for fair taxes in the healthy public sector.

We must respectfully oppose the bill. We doubt whether the tax benefits proposed in the bill will provide real relief or improvement in first time home buyer buyers programs in this state. And it could have the disadvantage to those home buyers who, by obligating the buyer rather than the seller to make unnecessary repairs, which is usually part of a negotiated process. These home owners will have limited tax liability, which for working families with children is very low by design.

The DFA is a direct program of assistance, which is much more appropriate for funding for homebuyers' needs, including necessary repairs more so than a tax credit.

Thank you. We ask for a no vote.

Thank you very much. Anyone in the room wishing to express your opposition to this measure, would you please come to the microphone, name, your organization in opposition? Hearing and seeing none, wanna bring it back to the committee. Any members wishing to provide any comments to mister Tangipa? Hearing and seeing none, mister Tangipa, you may close if you wish.

Well, again, thank you, mister chair. And as an individual who's done over $20,000,000 in sales, helping those who are in the most disadvantaged, I know exactly who this would apply to. And this would give those who I started off by saying, a minimum credit score of 660, a home buying course, a specific first time home buyer who qualifies for CalHFA, the most disadvantaged loans that somebody can get to purchase a home.

This would give them the upper hand in negotiations when it comes to speaking to these sellers and give us the ability to really sell them to help break generational poverty. That is what this bill is.

It specifically is applied to CalHFA. And in my personal experience, I have seen plenty of first time homebuyers lose out on great homes simply due to the required repairs. And AB1714 is a simple way to get rid of the artificial scarcity in the home market for first time homebuyers, and I respectfully ask for your eye vote.

Thank you very much. This bill is referred to our suspense file, and thank you very much for appearing with your bill. Next, assembly bill a follow-up number four, AB2427. You may proceed when ready. Any witnesses?

Yes. Okay.

No.

Thank you again, Mister Chair and Members. California agriculture is not just an important industry. It is foundational to our state and national economy. California leads the nation in farm production and has done so for decades. We produce more food than any other state and are the sole domestic producer of crops like almonds, pistachios, walnuts, olives, and raisins.

And as I go through this bill today, I want all of you to think about this. Farmers today are asked to grow more food for more people in the history of the world with the least amount of land and the least amount of resources ever available to them. This industry journey generates more than 59,000,000,000 to annual farm production and supports over a $100,000,000,000 in total economic activity when you include processing, transportation, and related sectors.

It also supports more than 400,000 jobs statewide, many of them in rural communities where agriculture is the backbone, spine, hands, feet, eyes, and ears of our local economy. But despite its importance, agriculture is under growing pressure.

Farmers are facing rising in input costs, labor shortages, water uncertainty, regulatory challenges, and increasing competition from other states and countries that are actively investing in their agricultural sectors. AB2427 is a practical targeted response. It creates a tax credit for qualified agricultural producers to help offset the cost of labor, equipment, infrastructure, and production. It is designed to help keep California agriculture competitive at a time when investment decisions are increasingly shaped by cost and policy.

We have seen that targeted tax incentives can play a role in retaining key industries in California.

The legislature has recognized that in other sectors such as Hollywood, agriculture deserves the same consideration because we are already seeing production and investment shift to other states and countries. If the legislature felt that urgency to provide tax relief to a $30,000,000,000 industry in California, it only makes sense to see the critical need to a $100,000,000,000 industry. An industry that once gone will create even greater budget and economic issues. Some of you have probably seen this bill before.

It looks very similar to one that last year was supported, the film tax credit.

But this was reshaped as the farm tax credit because our farmers and food deserve the same type of protections. At its core, AB20, 20, 2427 is about stability, keeping farmland in production, keeping people employed, and supporting the rural communities that depend on agriculture. Today, I have Amber with the Sacramento County Farm Bureau to testify in support.

Thank you very much. You have two minutes.

Okay. My name is Amber McDowell. I'm the executive director of the Sacramento County Farm Bureau. Our Farm Bureau supports this bill that establishes a agriculture tax credit program for farmers. California farmers and ranchers are facing unprecedented costs driven by labor mandates, regulatory compliance, implementing climate smart practices, and energy costs. Specifically, for one of my diversified crop farmers, 40% of his budget goes to labor, 5% just for fertilizer, five just for diesel, and 4% for electricity.

In the Cal Poly study, evolving costs for regulatory compliance in the produce industry, the rising costs of regulation to California farmers has increased 1366% since 2006. Unfortunately, the market prices that California farmers receive have remained relatively the same for the last several decades. In these tight margins, if there is any, it does not allow farmers to invest in newer, efficient, or green technology that could help cut operating costs.

The legislature has committed similar investments to other industries like entertainment, now has the opportunity to provide the same level of support to California's vital agriculture sector, which directly impacts our local and regional communities. As markets continue to stay flat and cost continue to rise, farms will permanently close.

Therefore, leaving California to rely on their food source coming from outside the state, sending money to other countries for that food, and the loss of revenue that agriculture currently brings into California by exporting food to other countries. Because the entertainment industry is mobile, it can come and go as economic opportunities change. But when a farm closes and that land is converted into something else, that land and that food source is lost forever. Farmland cannot be created later.

California needs to start protecting the agricultural land that's left that we have now, because it's all we have to continue to to supply our growing population and our economy.

California agriculture is one of the state's largest industries providing jobs and essential food to millions of Californians, the nation, and the world. It's essential for economic stability, in state food security, and progress towards the state's environmental goals.

Thank you very much for your your comments. Next, we'll go to our, those in the audience. Anyone wishing to speak in support, would you please step to the microphone, your name, your organization? This is support.

Good afternoon, chair members. Peter Ansell, California Farm Bureau in support. Thank you very much.

David Bullock of the Alliance, in support.

Thank you very much. Seeing and hearing no one else wishing to speak in support, any primary opposition to twenty four twenty seven, would you please come up and have a seat at the table?

Hello. Danny Kando-Kaiser again on behalf of the California Tax Reform Association. As the, analysis indicates, we think that it's unclear why the state would provide such a large, tax reduction for normal operations of agriculture. We do respectfully oppose the bill. We recognize that, farms in the state are struggling.

But again, this bill looks like it would mostly be usable by farms that are already turning a profit. Those farms who are suffering, can roll over their losses, or pay no taxes and then roll over their losses into future profits, and we ask for a no vote. Thank you.

Thank you very much. Anyone in the room wishing to speak in opposition your name, please have to microphone your name, organization, and this is opposition to twenty four twenty seven. Hearing and seeing none, I wanna bring it back to the dais. Any members? Miss DeMaio?

You're what group again? California tax

The California Tax Reform Association, which is formed of the state's labor groups.

Oh, okay. The tax raisers. Gotcha. I never saw you come before this committee when you to oppose the Hollywood tax credits last year. You were silent.

it just

Is it labor because labor benefited from that?

So within the California Tax Reform Association are a wide variety of labor groups, and the consensus is not 100% on on the Hollywood tax credit. I anticipated that you might ask the question, and and again, CTO is composed of teachers, administrators, service workers, and yeah. So again Labor. Just sort of repeating myself that, you know, the consensus was not a 100% on that.

Right. So again, I I always have to ask the question about an organization's true motive and whether they're consistent. It sounds like you oppose this because farm workers and farm farmers writ large may maybe not be a paying member of your coalition. Is that why?

No. No. I certainly wouldn't say that. I think that, again, California Tax Reform Association has always

How many farmers per person. Are part of your organization?

I actually wouldn't... I don't know.

I checked.

I mean, I could I No. I could look the. Perhaps the firefighters?

Farmers?

Within perhaps members of their family. Nurses.

Oh, that sounds like a stretch. Okay. So I again, I always look at opposition, and I wanna understand their background, where they're coming from so that I can weigh the credibility of their statements. And I find them not to be a credible opposition witness. For the author, what was the value of the Hollywood tax credit?

And what's, well, let me start with yours. What is the value of your tax credit annually?

It's actually pretty close to a mirror match to Hollywood tax credit. $750,000,000. So $750,000,000, the ag industry capped at $1,000,000 per individual.

And how many jobs are in the the agricultural sector in the state of California?

Over 400,000.

Yeah. There's only a 100,000 jobs if you broadly defined it in the entertainment industry in California. So we're talking about a four fold job support versus last year's tax credit. So if this committee sought fit to advance that priority, my hope is that the committee will also see fit to support a fourfold job multiplier for our ag sector. And I hope that when we get this back to the committee off of the suspense file that it will enjoy our support.

Thank you.

Thank you very much. Any other additional questions? I have a question for the for the author. How exactly will this help small businesses struggling to make a profit?

So right now, farmers, their margins on their businesses is actually smaller than it was during the Great Depression.

And a lot of it is because of the additional burdens, regulatory compliance, and fees that they have to deal with here in California. So just like what it did for the Hollywood tax credit, when we talked about this was real relief for the local people there. This is real relief for all of the farmers that provide all of the jobs in our districts.

If you'd like to visit a place in my district or actually just outside of my district, we have many small towns like Kermit, Fireball, Mendota, up here in the Sacramento regional and area where this type of relief will ensure that those jobs stay here as our farms on the national scale and here locally are really collapsing.

K. Thank you very much, Mr. Tangipa. And you may close if you wish.

Thank you, Mr. Chair. And all I can say is that agriculture is worth protecting and investing in. And last year, a very dapper looking intelligent, probably has a greatest bow tie in the legislature, spoke on SP 132 and talked about how it was real relief for California and said it makes a meaningful investment into films, tax credits, because they support real California jobs.

This bill is a mirror match that has a fourfold effect on farmers because we cannot pick up farmland, but they can pick up films and move out of the state. If this industry right now is collapsing, we need to provide the relief before it's too late.

And that's exactly why I asked for your aye vote on this bill.

Thank you very much, Mr. Tangipa, for presenting this bill. This bill will be referred to our suspense file. I thank your witnesses your witness for appearing before this committee. Thank you very much.

Thank you.

I think you have one more bill before this committee. File item number 5, AB2533. You may present, and if you have witnesses, they can approach and have a seat at the table. And you may you may commence when ready.

Sorry. I don't make these desks high enough, and I keep banging my knees. Yeah. But again, thank you, mister chair and members. For my last bill today, I would like to thank everyone for their time and patience this afternoon.

AB2533 addresses a simple problem under current law. When an employer helps cover the cost of a gym membership or fitness benefit, that support can be treated as taxable income to an employee. This bill corrects that by allowing a deduction for a qualified employer provided fitness benefit. This measure is about removing a tax penalty on prevention and wellness. If we want healthier communities and healthier workers, we should not be taxing a modest benefit that helps people stay active.

A B 2533 is a narrowly tailored is also narrowly tailored. It applies only to the a uniform fitness benefit provided to all full time employees. It does not apply to country clubs, golf clubs, travel, meals, lodging, or enhanced benefits for highly compensated employees. This bill is designed to support ordinary working Californians whose employers want to invest in their health, but may not have the resources to build or maintain an on-site gym. Current law allows favors.

Current law already favors employers who can provide an on-site fitness facilities tax free. AB2533 helps level that playing field for everyone else. I also want to address a few of the committee's concerns directly. First, this is not a duplicate duplicative tax benefit. Employers may already deduct compensation generally, but employees can still be taxed on receiving this benefit.

AB2533 addresses the employee side tax treatment. Second, while no policy can guarantee that every single employee will use a gym membership, this bill is about improving access and lowering barriers to healthy behavior. The state should not be taxing a benefit that makes wellness more affordable. And finally, I understand the committee's concerns regarding implementation details, including a sunset and conformity issues. I am committed to continuing to work with the committee on those items prevention, workforce, wellness, and affordability.

I respectfully ask for your for your aye vote. And with me today is

Andrew Mach.

Is Andrew Mach, who's here to testify in support.

No. I'll also do Bob's.

You're gonna and we're missing one and he will also do Bob Rogers. Thank you.

Thank you very much. You have two minutes.

Thank you, Mister Chairman and Members of the Committee. My name is Doctor Andrew Mach. I'm a primary care physician, quadruple board certified in family preventive lifestyle and obesity medicine. I am the medical director for Hogue Memorial Hospital in Southern California where I prescribe exercise every single day in my practice for chronic disease prevention, treatment, and reversal.

I also serve as a national education lead on the physical activity prescription, working with the American College of Lifestyle Medicine on the lifestyle medicine residency curriculum that will go to 400 residency and fellowship programs nationwide this year training our future generation of physicians on physical activity assessment prescription and referral.

As part of that work, I also work with national advocacy groups serving on the board of the Physical Activity Alliance, the Medical Fitness Association, and working within the American Medical Association as a delegate to the American College of Lifestyle Medicine. And just to prove that we are the tip of the spear that is working to make physical activity assessment, prescription, and referral a standard in health care as part of the it's time to move initiative. I also practice what I prescribe.

I'm five time California strongest man. Just defended my title two weeks ago.

So you know that this is something near and dear to my heart. But we have a broken health care system. We pay for medications. We pay for surgeries. When it comes to physical activity and lifestyle medicine, we often leave patients with the bill.

And this is despite very strong evidence that this is one of the most effective interventions that we have, both from an efficacy standpoint, as well as a positive return on investment. Physical activity is a first line treatment for all major chronic health conditions. High blood pressure, diabetes, obesity, mental health. It reduces cancer risk. It improves cancer survivorship.

This time, it is time we give it the respect that it deserves because the evidence is clear. Cardiorespiratory fitness, strength, and power are the strongest predictors of long term health that we have. Up there with blood pressure, and helpful body weight, and control of blood sugars. But the real barrier comes with access. Equitable access.

Those with the least have the least access to this powerful intervention. If you can afford to pay for your own exercise, you get much better health care in our state. I wanna give you one quick example. Two years ago

Can you finish your thought through two minutes or?

Just just finish your thought.

Yes.

Very powerful story. One of my patients came in, difficulty climbing up 10 flights of stairs. We started her in a community based exercise program that cost $50 per month. Four years after that four months after that, she was able to go to 1,000 steps speech with her church group and climb those stairs without assistance.

Thank you. Thank you very much. Anyone in the room wishing to speak in support of, AB2333, should please come to the microphone. Your name, your organization, and this is support.

David Balrog, SFP Alliance. I apologize for keep on coming back, but I'm a sucker for great tax credits and deductions and support. Thank you.

Thank you very much.

Steven Stanser with the Brownstein on behalf of the Health and Fitness Association and the California Fitness Alliance in support. Thank you.

Thank you very much. Any primary opposition to this measure 2533, would you please come up to the table and have a seat? And you have two minutes.

Thank you very much. Again, Danny Kim with Kaiser on behalf of the California Tax Reform Association in respectful opposition. This legislation will complicate the state code since there are no provisions existing in federal law. Many employers already provide wellness and fitness benefits, which which are deductible as a business expense. For those instances that qualify as medical expenses, they are nontaxable, while other benefits such as gym memberships are taxable to the employee.

We request a no vote. Thank you.

Thank you very much. Anyone in the room wishing to register their opposition to this measure, please come to the microphone. Hearing and seeing none, I'm gonna bring it back to the dais. Any questions from my colleagues? I have one question for mister Tangipod.

Do you intend to limit the deductions amount to $600 to make it match the unemployment insurance tax exclusion and add a five year sunset to this measure?

Is it is that what's currently suggested as committee amendments?

Yes. I would love to work with the committee on that, and more than happy to get together and work with that. So yes. Okay.

Great. Great. Thank you thank you very much. And, you know, I just, you know, appreciate your witness' comments and and your comment as well. You know, I work it may not look like it, but I do go to the gym.

And, certainly, we believe in physical fitness and, you know, working out and believe that if people do this and it helps people calling in sick and things of that nature and just just a healthy lifestyle makes people tend to, I believe, live a long life. And health is very, very important, and we believe in it. We certainly encourage it. So thank you very much for your comments, and you may close if you wish.

Yep. Well, I appreciate those comments, mister chair. And two, one of the things that I've learned here today is to make sure that when you're sitting next to California's strongest man, do not wear the same suit because one significantly looks better as he gets to work out a whole lot more often than I do. But there is something that we do live by. Health is wealth.

And I think that a lot of people are seeing that. And we wanted to make sure that if some of the employers want to help people invest into their health, you know, we're not hurting them through a, and I wanted to try this again, duplicative tax. So we wanted to make sure that's easier than them. And I respectfully ask for a I vote as we really prioritize that health is wealth. Thank you.

Thank you very much. This item will refer to our suspense file. Thank you, witness, for coming and appearing before this committee. Next up, we have file item number 7, AB2192. Mister Gonzales, we know you've been waiting patiently.

You and your witnesses can approach and have a seat, and you may commence when ready. With his radio announcer and voice, we can start.

Good afternoon, Mister Chair and Members. I'm pleased to present AB2192, a measure that makes a targeted and thoughtful adjustment to California's tax policy policy to better support our agricultural producers while maintaining fiscal responsibility and protecting local government revenues. California agriculture is not just another industry. It is a cornerstone of our state's economy and a critical part of our national and global food supply.

California farmers produce more than a third of the nation's vegetables and over two thirds of the nation's fruits and nuts.

The food grown in our state feeds families not only here at home but across The United States and around the world. Ensuring that agriculture remains viable in California is not just an economic issue. It is a food security issue. Yet today, farmers are facing unprecedented financial pressure. Under current law, California provides a state level sales and use tax exemption for farm equipment and machinery used to produce and harvest agricultural products.

However, that exemption does not apply to local sales and use taxes, meaning that farmers still pay significant taxes on the very equipment they rely on to operate. AB 2192 addresses this inconsistency by extending the existing exemption to include local sales and use taxes. This change helps create a more consistent tax structure while reducing the cost burden associated with essential equipment purchases. And it shows that we stand with our agricultural community and want the industry to be viable here in California.

Members, the importance of this relief cannot be overstated.

California farmers today are operating under some of the highest production costs in the nations which we just heard about. They face rising costs for labor, fuel, water, fertilizer, compliance within environmental regulations, and equipment modernization. In some regions, regulatory compliance costs alone have increased more than 1300% since twenty eight two thousand six. Now consuming a significant share of total production costs and placing intense strain on already narrow profit margins. At the same time, many producers have seen little growth in the prices they receive for their crops.

That imbalance, rapidly increasing cost combined with relatively flat revenues is pushing some farmers out of my district, out of California, or out of business entirely. Others are forced to scale back operations, delay equipment upgrades, or pass higher costs along with though with along through increased food prices. And when farmers struggle, the impacts extend far beyond the farm gate. Reduced production capacity affects supply chains, increases costs for families in our districts, and weakens the resilience of our food systems.

Supporting farmers is not just about supporting one sector.

It's about protecting the stability of our food supply and the affordability of food for California families. AB 292192 offers targeted relief where it matters most, on capital investments that are essential to agricultural productivity. Just as importantly, this bill takes a responsible and balanced fiscal approach. AB 2192 includes a 200,000,000 general fund appropriation to reimburse cities and counties for their initial revenue losses associated with the expanded exemption.

This ensures that local governments remain whole and that we provide support to agriculture without shifting the burden onto our local partners.

I'm aware that this appropriation would only cover the first year of this exemption and look forward to working with both the cities and counties to address this. From a tax policy standpoint, this bill promotes consistency, consistency in the state and consistency locally, uniformity and fairness by aligning state and local treatment of agricultural equipment purchases. Members, California agriculture feeds our communities, mine and yours. It supports our economy and helps feed the world, but our farmers cannot continue to shoulder ever increasing costs without thoughtful policy support.

AB 2192 is a practical, balanced step that helps reduce financial pressure on producers, protects local government revenues, and strengthens the long term sustainability of California agriculture.

Let's protect our California grown food and join me in protecting California agriculture. With me today is Peter Ansell from the California Farm Bureau. Peter.

Good afternoon, Chair Members. My name is Peter Ansel. Two minutes.

Good afternoon, Chair Members. Peter Ansel representing the California Farm Bureau, a statewide organization of over 25,000 California farmers and ranchers. And as you've heard, California farmers and ranchers, producers face, extremely high regulatory costs. Cal Poly, San Luis Obispo studies looking at lettuce and wine grape productions have noted that producers of all sizes are experiencing in the past ten years or twenty years 13 to 1700% increases. Importantly, that's about it used to be about a 1.5% of production cost per acre.

That's now up to about 12 and a half percent. So just to do business, fill out all the forms, fill out all the paperwork is 12 and a half percent of every dollar that it cost to grow something in the state, which is an astronomical increase that is having really negative unintended consequences on farmers and ranchers as evidenced by 7,000 lost small farms and ranches since the last census that USDA produced was completed. And as has also been talked, farmers and ranchers are price takers.

They're not price makers. They grow under contracts that are predetermined the year prior to planting going in.

So they don't get to choose what the price is going to be. It's grown under a contract.

With that gap being unsustainable, we either continue to lose farms in the state and continue to see more consolidation at a time when the state is asking farmers and ranchers to invest, invest in new electric equipment, invest in equipment that meets air quality standards, that meets water quality standards, that decreases water use, that lowers the inputs on fertilizer, pesticides, herbicides, that addresses the impact to labor from an increasing climate that's having heating index impacts. All of those are are noble, laudable goals and important capital investments.

They're also all extremely capital intensive, costly capital investments for our members to make.

AB 2192 provides targeted relief by providing a reduction in that cost of those equipment purchases. Providing that sales tax exemption in a fiscally responsible way and then reimbursing local governments is something that the state has been, here before. We've done that under the Williams Act, where local government was recognized for going property tax dollars in exchange for producers committing to grow food in California.

AB 2192 follows a similar model where state revenues would backfill lost local revenues just as it did with the Williamson Act. Because each and every farm purchase supports rural economies and rural agribusinesses, and the state is looking to modernize the equipment that farmers and ranchers use.

We hope that the state will also be willing to be a partner in those investments

If you can conclude April.

So I respectfully ask for an aye vote.

Thank you very much. Anyone in the room wishing to speak in support of Assembly Bill twenty five twenty two 25 I'm sorry?

'92.

2192.

Oh, 2192. I'm on the wrong one. That's it. 2192. So please step to the microphone, your name, your organization, and support of assembly bill twenty one ninety two.

Hearing and seeing none. Primary opposition to this measure.

Good afternoon. Again, Danny Kando-Kaiser on behalf of the California Tax Reform Association respectfully opposed farm machinery and equipment is already exempt from sales tax at the state level. The bill would require a $200,000,000 appropriation with no evidence that the partial exemption is insufficient with regard to farm equipment purchases, and we do ask for a no vote.

Thank you very much. Anyone in the room wishing to speak in opposition to twenty one ninety two, please step to the microphone, your name, your organization, and opposition.

Hello, Members and Chair. Here my name is Julissa Cesar Cardenas here on behalf of the California State Association of Counties and the Cal the League of California Cities in respectful opposition. Thank you.

Thank you very much. Wanna bring it back to the dais. Any questions of this author? Anyone? Okay.

Great. Thank you very much. Miss Gonzales, you may close.

Thank you, Mister Chair. This is these are not easy decisions that need to be that have to be made. But the reality is we have to protect California agriculture. It begins in California. It ends in California.

And the way we do that is by protecting them. So I respectfully ask one appropriate for an aye vote.

Thank you very much. And this bill will be referred to our suspense file. I wanna thank your witness for appearing before this committee. You have an additional bill, file item number 82522. And you may proceed when ready.

Same with you. Witnesses? Okay. Yes. Thank you very much.

You may proceed.

Thank you, mister chair and members. I'm pleased to present AB2522, a practical and compassionate measure that helps Californians afford the basic medications that rely that they rely on every day. AB2522 expands California's existing sales state sales tax exemption for prescription medications to also include over the counter items like ibuprofen, cold and flu medicine, allergy treatments, and other common medications families depend on to stay healthy and care for loved ones.

Members, Californians are facing one of the highest cost of living in the nation. Our statewide sales tax rate is the highest in the country.

And when combined with local taxes, it places a significant burden on working families. At the same time, the cost of living in California is nearly 40% 47% higher than the national average. And millions of Californians live at or near the poverty level. For many Californians, these pressures show up in everyday choices like deciding whether to pick up medicine for a sick child. Sure, we've all had to do that.

Treat seasonal allergies or manage common illnesses at home. These are not luxury purchases. These are basic necessities that help people stay healthy, return to work, and keep their families functioning. Have you ever had a headache from an allergy day after day after day after day, and the only relief is having to go get something for that allergy medicine? This is what I'm talking about.

This is the type of relief that we can provide. So today, prescription medications are exempt from sales tax because we recognize that medicine is not optional. It is essential. But over the counter medications, many of which treat the very same conditions, are still taxed. AB2522 corrects this inconsistency and creates tax parity between prescription and over the counter medications, recognizing that both play a critical role in maintaining health and well-being.

Members, this issue also has an important equity implications. Sales taxes are widely recognized as regressive, meaning they place a greater burden on those with fewer financial resources. In my district alone and throughout California, low income families, seniors living on fixed incomes, and individuals managing chronic health conditions are often the ones who rely most heavily heavily on the over the counter medications. When these everyday health products are taxed, the burden falls disproportionately on those least able to afford it.

Over the counter medication medications also serve as an important and cost effective first line of care.

They give families the ability to treat mild to moderate conditions quickly and affordably without requiring a visit to the health care provider. This is not only this not only supports individuals health, but also helps reduce strain on our healthcare system by allowing people to manage routine illnesses safely and at home. The example I give is in my own home. You know, that I have a son with special needs. He is nonverbal.

It's a puzzle to try and fix issues because he can't tell you he's got a headache. We have to wait for these things to pop up. So we have to do our first line care, and sometimes that's ibuprofen. Sometimes it's something very simple.

Instead of going to the to the emergency room and paying all that money and being in there for hours and hours and hours, This gives me and it gives tons of California sons and daughters the opportunity to take care of it on the front line.

We have the ability to do that and help. AB2522 provides meaningful relief while maintaining responsible fiscal oversight. The exemption would remain in effect until 01/01/2032, allowing the legislature to evaluate its effectiveness through measurable data and reporting requirements. This ensures transparency and gives us the ability to review the impact of the policy over time. At its core, this bill reflects a simple principle.

Medicine should not be treated as a luxury. When a parent purchases fever medication for a child, when a senior buys medication to manage chronic pain, or when a worker picks up cold medicine to get back on the job. They are making responsible health decisions, not discretionary purchases. Eighty twenty five twenty two offers practical targeted relief to Californians at a time when many are struggling with rising costs.

It promotes fairness in our tax system, supports public health, and helps ensure that access to basic medic medications remains within reach for all Californians.

Members, I respectfully ask for your aye vote when appropriate on AB2522.

Thank you very much. Anyone in the room wishing to speak in support of this measure 25?

Mister Chair, Members of the Committee, Randy Pollack on behalf of Halion, which is a consumer health products company. Thank you.

Thank you. Hearing and seeing no one else, any primary opposition to this measure?

Hello. Danny Kando-Kaiser on behalf of the California Tax Reform Association. In respectful opposition, a $300,000,000 hit to the general fund that would impact local and state governments is something that we would oppose. We ask for a no vote.

Thank you very much. Anyone in the room wishing to speak in opposition to this measure twenty five twenty two, would you please line up? Hearing and saying no and bring it back to the committee. Thank you very much. No one wishing to speak on the committee.

I according to the the committee analysis, this bill would result in a savings roughly $25 per household. Is this relief sufficient to justify roughly $250,000,000 cost savings to the state? What is your

Yeah. You you know, you you have to ask the question to the the poorest people in in our communities. What does $25 do for your your pocketbook? What does $10 do? See, that's the difference between a meal, getting extra food.

$25 to some folks is might mean nothing. That's a couple Starbucks or a cigar. But for the people that absolutely need it every single day, $25 could be the lifeline. So we have to look at things from an empathetic perspective sometimes, and things aren't working in California. We need to be able to fix it, and this is one way that we can do that.

Thank you very much. You may close.

Thank you. Respectfully ask for an aye vote.

Thank you very much. Again, this item is referred to our suspense file. Thank the author for appearing in all well, you you don't have any witnesses. But thank you very much for being here.

Thank you, Mister Chairman.

File item number 9AB2389, Miss Irwin. You and your witnesses may approach, and you may proceed when ready.

Well, good afternoon, Mister Chair and Committee Members. Today, I'm presenting AB2389, a bill to keep energy affordable for all Californians. AB2389 extends an existing property tax exclusion for newly installed solar energy systems for five years. Without this exclusion, Californians who install solar energy will be penalized with increased property taxes. At a time when electricity prices are rising across California, this policy helps homeowners, business owners, and public institutions keep energy affordable while transitioning to clean energy.

This is especially important now as federal rollbacks, including the expiration of the 30% credit, place greater pressure on state level government to maintain momentum. By extending this incentive, California continues to support cost savings and strengthen grid resilience. This is especially important for low and middle income Californians who make up over half of all solar users. While this, while the bill is on suspense, I intend to add amendments to remove new construction projects, which are already required to install, solar energy.

With me here to testify in support of the bill are Laura Dehan from, Environmental California and Dave Rosenfeld from the Solar Rights Allowance.

Thank you very much. You have two minutes each.

Okay. Great. Thank you, Chair and Committee Members, and staff. My name is Laura Deehan. I'm the state director for Environment California, statewide environmental advocacy group.

And we are very enthusiastic to sponsor AB2389 by Assembly Member Irwin. California is a leader in solar and in battery storage, and, we've really led the way by adopting policies that align with our clean energy goals. AB2389 continues the common sense popular policy to exclude solar and storage, that's been in place since voters approved a measure in 1980, proposition seven, with more than 65% of the vote to encourage solar and storage adoption.

And this, bill, AB2389 will protect homes, schools, small businesses, and community buildings from a new solar or storage property tax. As we currently face a new energy crisis and an affordability crisis, we need more people to be adopting solar and storage.

And the last thing we should be doing is penalizing everyday Californians from going solar. A new solar property tax would actually discourage people from doing solar and storage right when we need more. And if this bill doesn't pass, then come January 2027, Californians will be discouraged from investing in clean air and greater resilience. We're facing extreme heat waves right now, again, wildfires, blackouts, and as these are becoming more frequent, energy storage with solar is more than peace of mind. For many, it's a lifeline.

It'll help by reducing peak demand, saving all Californians energy costs, and reducing power outages as well as cutting pollution. So we urge your support in the committee. Thank you.

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

Thank you, Mister Chair, Members of the Committee. My name is Dave Rosenfeld. I'm the executive director of the Solar Rights Alliance. We're a nonprofit network of a 150,000 solar users across California. We support AB2389, which would, ensure that California does not levy a new property tax on everyday people in the institutions that support them.

A yes vote on AB2389 is a simple way to, keep the affordability crisis from getting worse. According to the Lawrence Berkeley National Lab, more than half of all rooftop solar users in California are middle and working class. About half are people of color. The largest group of rooftop solar users in California are households that make between 50 and $100,000 a year. These are everyday people.

These are teachers, nurses, disabled veterans, seniors on fixed income. These are people who scrimped and saved to get solar. Sometimes they even dip into their retirement accounts. And the reason why people do that is because the alternative is worse, which is being a sitting duck to rising rates and a CPUC that continues to rubber stamp those rates.

Rooftop solar users are also institutions that support everyday people like schools, food banks, libraries, water, water treatment plants, and these entities will also be negatively impacted if AB2389 is not passed.

A new property tax on solar and batteries doesn't make sense because home solar doesn't increase costs for local governments, and rooftop solar and batteries actually decreases people's footprint on the electricity grid and reduces the prevalence of blackouts. And so, you know, not passing AB2389, what effectively will happen is that we're going to increase the cost of both housing and energy on everyday people who are already struggling to make ends meet. And so we enthusiastically and respectfully urge an aye vote.

Thank you very much. Anyone in the room wishing to speak in support of this measure 2389, should please oh, wow. That's the whole room. Okay.

Your name, organization, and this is support only.

Kim Stone, Stone Advocacy on behalf of the California Solar and Storage Association. I've also been asked to register the support of Altadena Energy and Solar, Bryton Solar, White Pine Renewables, JKB Energy, Citadel Roofing and Solar, Altadena Energy, Solar Technologies, Calcom Energy, HES Renewables, Simply Solar, Sunlight and Power, Solar Game West, Baker Home Energy, Local Government Sustainable Energy Coalition, James Irrigation District, Camarosa Water District, Linda County Water District, and the Natomas Central Mutual Water Company.

Thank you. Any any more? That's it. Okay. Thank you very much.

There's a lot more. I'm just gonna give you an edited version.

Thank you. Good afternoon, Mister Chairman. Alberto Turico on behalf of Only Settlement in support. Thank you.

Mister Chair and Members, Ian Padilla with the School Energy Coalition in support, and thank you very much.

Thank you.

Good afternoon. Alan Escarda, working resident of Sacramento in support of AB2389.

Thank you.

Good afternoon. My name is Lauren Deutsch, and I stand in strong support of AB2389 on behalf of Sierra Club California, Sacramento Climate Coalition, San Francisco Physicians for Social Responsibility, Peninsula Interfaith Climate Action, Alliance for Nurses for Healthy Environments, Recolt Energy, Santa Clarita Valley Eco Alliance, and the US Green Building Council. Thank you.

Thank you.

Good afternoon. My name is Colin Mason speaking to support HB2389 on behalf of GRID Alternatives, Acterra, Self Help Enterprises, ACT Now Bay Area, and San Diego 350.

Thank you.

I only have one. Keshav Kumar with Lighthouse Public Affairs on behalf of the city of Fresno in support.

Thank you.

Chair members, Jai O'Dentes with Full Moon Strategies on behalf of the San Diego Community Power in support. Thank you.

Therese Lavoie, live in Somerset, which is El Dorado County, and I fully support AB2389. Thank you.

Thank you.

Dean Walker, Sebastopol, California, homeowner and solar energy consultant in support.

Thank you.

Kim Craig with Arc Strategies on behalf of Q Sales in support.

Thank you.

Jerry Levine from San Jose, and I support 2389.

Thank you.

Stan Lander from Nevada, California, homeowner and rooftop solar owner, and I'm in support of the bill.

Thank you.

Hello. I'm Keo. Glad to meet you. Thank you for listening to us. I'm a solar homeowner that wouldn't have solar unless PG and E smart routers meters had burned down half my house and the insurance paid for my solar.

So I'm very much in support of this because my taxes have gone up. Thank you.

Thank you.

Good afternoon. I'm Steven Ratmeister. I live in and retired in Dublin, California, and I support the bill.

Thank you.

Good afternoon. My name is Alfred Tetzner. I live in Pacifica, California. I urge you to please pass AB2389.

Thank you. Thank you.

Good afternoon. I'm Kaye Tetzner of Pacifica, California, and I please ask you to vote in support of this bill. Thank you. Thank you.

Hello. My name is June Dansel from Solano County, and I support AB2389. Thank you.

Thank you.

I'm Clay Newman. My family and I live here in Sacramento, and we appreciate the work you do keeping the government working. And we strongly support this bill. Thank you.

Thank you.

Matt Roman on behalf of the town of Apple Valley here in support. Thank you.

Paul Smith. I live in Oakland, and I'm here in support. Thank you.

Lynn Griffith from Oakland, strongly support 2389.

Thank you.

Barbara Dubois from Strawberry, in support.

Thank you.

Carl Wolfersberger of Mill Valley, California here to support this bill. Thank you very much.

Thank you. David Comrod, Oakland, California in support of this bill. Thank you.

Donald Honda, Sacramento. I support AB2389. Thank you. Thank you.

Rocky Fernandez with the Center for Sustainable Energy in support. Thank you.

Mike Kleeman, Brentwood, California. I have a solar home, and I'm here to represent over 3,000 of my solar customers in the residential market. And I'm in support of 2389. Thank you.

Thank you.

My name is Heather McLeod from Oakland, California, and I support 2389. Thank you.

Thank you.

My name is Kathy Schiffer. I'm from Elk Grove, California. I'm in here in support of AB2389.

Thank you.

Hello. My name is Mick McGinnis. I'm a property owner and a solar install with a solar array installed in Placer County. And so I support the bill.

Thank you.

Scott Kaufman, Howard Jarvis Taxpayers Association in support.

Thank you. Any primary witness in opposition to this measure 2389? Hearing and seeing none, Anyone in the room wishing to register opposition to this measure? You have the same right. Seeing and hearing none, bring it back to the Committee.

Any committee members wishing to have any comments or questions of the author? Yes, Miss Rodriguez.

I just wanna thank the author for bringing this bill forward. It's a good step in addressing affordability, so thank you.

Yes. And yes. Miss Sanchez?

I also wanna thank the author for advocating for affordability, and I'd like to be considered a for a co-author.

Thank you. And I wanna make sure on record, you did say that you would accept the amendments.

Yes.

Thank you very much for that. Miss Irwin and former Chair of this Committee, thank you very much. Appreciate your service. And you may close if you wish.

Thank you very much, Chair. As Speaker Rivas said in his inaugural speech on affordability, we must elevate California's working and middle classes by enacting practical measures, measures that will lift the economic burden that they face. And AB2389 does exactly that by promoting affordable energy for Californians all throughout the state. With that being said, I respectfully ask for you to move this bill off suspense at the appropriate time. Thank you very much.

Thank you very much. He quoted our speaker. Thank you. This bill, it will be referred to our suspense file, and thank you very much to your witnesses for appearing and testifying. Thank you.

Next up, we have file item number 11, AB 2444. Miss Rodriguez. We're almost done. And you may, you may commence when ready.

Thank you, Mister Chairman and members of the committee. Before turning to the substance of the bill, I want to state for the record that I sincerely appreciate the thoughtful work of the committee that has brought this measure to current form.

After AB 2444 takes two meaningful and forward looking steps to confront the college affordability crisis facing families across California. First, AB 2444 aligns California tax law with recent federal changes, allowing eligible rollovers from qualified tuition plans into Roth IRAs, ensuring families are not penalized for planning ahead and adapting to life's uncertainties.

SB 8, I mean, second, AB 2444 establishes a new state income tax deduction for contributions to scholars share 529 accounts, empowering families to invest early and consistently in their children's futures. Members, we know that access to higher education remains one of the most powerful pathways to upward mobility, economic independence, and the fulfillment of the American promise.

At its core, the bill is about strengthening that promise, giving families the tools to plan, to save, and to believe that opportunity is within reach for the next generation. It's our responsibility to stand with working families, to expand access to opportunity, and to ensure that doors to higher education remain open, not just for some, but for all.

With me to testify is Cassandra DiBenedetto, the executive director of ScholarShare 529, and Stanley Zeto from the Treasurer's Office, here to answer technical questions.

Thank you very much. You have two minutes.

Thank you. Good afternoon, Chair and members of the committee. I'm Cassandra DiBenedetto, Executive Director of the ScholarShare Investment Board, which administers the state's 529 program housed within the state treasurer's office. ScholarShare 529 was created to help families save in tax advantage way for higher education.

Unfortunately, however, state law has not kept up with our ability to help families in the way that federal law has. This bill does two key things. It incentivized families to save through California's own 529 plan by offering a limited tax deduction on contribution and align state law with federal law to permit unused 529 funds to roll over into a Roth IRA for retirement savings.

This bill is about supporting economic mobility. ScholarShare 529 has found in the last few years a significant decrease in household income amongst family savings through our plan. This includes a 19% decrease in household income in the last six years for family savings for a newborn child.

A tax deduction is critical, is a critical motivators to support low income and middle class families in this process. In addition, a tax deduction would bring California in alignment with most states who offer a tax incentive. We are one of only four who do not.

Strengthen California's commitment to financial literacy education by encouraging savings through the plan and provide a unique benefit to families who participate in our separate CalKIDS program, which offers a scholarship to newborns and low income students. Those participants are encouraged to save and through their own in the ScholarShare 529.

Additionally, this provision in AB 2444 allowing funds to roll over into a Roth IRA is critically important in supporting families on their lifelong financial journey. While not everyone may pursue college, everyone will need to retire. We should not penalize our low and middle income families for savings, but work to ensure they stay saving.

AB 2444 strengthens California's commitment to financial security and is critical and it's critical policy measure to support families in their personal savings. For these reasons, we thank the author's office for bringing these measures forward and ask for continued support.

Thank you very much. Next witness, two minutes.

Stan.

For technical.

Thank you very much. Anyone in the room wishing to speak in support of Assembly Bill 22, excuse me, 2444 to please line up to the microphone and speak. Hearing and seeing no one moving. Okay. Primary witness in opposition. Please come forward. And you have two minutes.

Technical.

Thank you.

Thank you.

Good afternoon, Mister Chair, members. Joanne Bettencourt on behalf of CFMA, the Securities Industry and Financial Markets Association. CFMA is a national trade association made up of broker dealers, investment banks, and asset managers. CFMA has a oppose unless amended position on the bill today. We completely agree with the goal of the bill to advise people to, save early and often for education.

However, we believe that AB 2444 should apply to all qualified financial, qualified tuition plans, not just the state sponsored plan. There are many reasons why people would select a particular 529 plan. One is the plan's past performance. The other is the investor's risk tolerance. One is fees that are charged, and most importantly, the, the ability to work with the trusted adviser.

Giving the state's plan preferential tax treatment over all qualified 529 plans really limits investors choice because it makes the driving factor to where the deduction is versus what plan might be best suitable for the savers overall needs. We believe that incentivizing people to save early and often for all qualified 529 plans is a better public policy to invest, for people to invest in whatever investment they see fit.

There are currently nine states that offer a deduction for both private and state sponsored plans, so we think this is doable. And so for these reasons, we respectfully oppose the bill unless it's amended. Thank you.

Thank you very much. Anyone in the room wishing to speak in opposition to Assembly Bill 2444, would you please come forward? Hearing and seeing no one, I wanna bring it back to the dais. Any members? Hearing and seeing none. Miss Rodriguez, you may close.

I just respectfully ask for an aye vote when it's appropriate. Thank you.

Thank you very much. This bill will be referred to our suspense file. Thank you very much to witnesses for appearing. Our last final bill for this evening, and as she's moving, our Vice Chair is moving swiftly to take a seat. And that is file number 12, AB 1550.

We'll invite her witness to join us. Join her at the table. And you may start when ready.

Thank you, Mister Chair and members. I appreciate the opportunity to present AB 1550. This bill is simple. If you're working harder, you should be able to keep more of what you've earned. Right now, federal law recognizes that tips in overtime aren't extra.

They're essential income for a lot of working people, and California should do the same. AB 1550 allows workers to deduct qualified tips and overtime from their state income taxes, putting real money back into the pockets of the people who've earned it. For many families, that extra shift or those tips aren't a bonus. They are how they cover rent, groceries, childcare, and gas.

We shouldn't be taxing people more because they are working harder. This bill is about fairness. It's about affordability, and it's about respecting the effort of working Californians who are doing everything right and still struggling to keep up. With me today is Scott Kaufman from the Howard Jarvis Taxpayers Association. Yes.

Thank you very much. You have two minutes.

Thank you to the Chair, members, and the Assembly Woman for giving me the opportunity to speak. Again, for the record, I'm Scott Kaufman, the Legislative Director of the Howard Jarvis Taxpayers Association. And I'm here today in support of AB 1550, which would allow Californians to deduct qualified tips and overtime compensation from state income tax.

These deductions are available even if a taxpayer takes the standard deduction, ensuring accessibility for working families who typically do not itemize. This measure would align California law with federal tax provisions and and in turn simplify the tax filing process.

Californians currently must navigate different federal and state rules for the same income. AB 1550 would help reduce that complexity and confusion for taxpayers. More importantly, workers keeping more of their earnings means more spend, means spending more money in their communities. Simulating local economies means supporting small businesses. Hard work should not be penalized by further taxes.

Again, the Howard Drivers Taxpayers Association, in proud support of AB 1550 and urge your, yes vote at the appropriate time. Thank you.

Thank you very much. Anyone in the room wishing to speak in support of AB1550, please come to the microphone, your name, your organization, and this support.

Good afternoon, Chair and members. Jennifer Tannehill with Aaron Read & Associates on behalf of the California Society of Enrolled Agents in support of SB 1550. The Enrolled Agents support conformity measures that benefit the taxpayer and streamline filing. So we thank you for bringing this measure forward.

Thank you very much. Next.

Hi. David Bullog. I guess with the Alliance, also an IBEW member, which we are affiliate of the AFL CIO, and I can attest that most of our members do support this legislation. Thank you.

Thank you very much. Primary witness in opposition to this measures, please. Any primary witness in opposition? Hearing and seeing none. Anyone in the room wishing to speak in opposition to AB 1550 come to the microphone? Hearing and seeing none. Wanna bring it back to the dais. Yes. Mister.

Carrillo.

No. No. Carrillo. I'm sorry. I was looking at something else. Go right ahead, please, Mister Carrillo.

Thank you, Mister Chair. I do have a statement that I wanted to make, but rather than making that statement, I wanna ask a question. And that question is, do we need taxpayer would benefit from this measure, those that have an IT number, ITIN? Because as you know, they, they did obtain that numbers so they could report their income taxes.

But I I don't know for sure if in your measure, does any taxpayer benefit and I would ask that anybody that pays their taxes, those that report the taxes not with a Social Security number, but with an IT number, would they qualify for this measure?

Sure. So we are looking at that with the legislative council to clarify. But currently, the bill's intent fully is just to align with the federal law as it's written now.

Well, that that's the question. Because if it's going to align with federal laws, as we know, the current administration, you know, is not very friendly to those that look like me, because we do come here to work. There was a process at a time when an IT number was assigned for those that wanted to comply with the law. In California, they were assigned an IT number, and I believe that they also use it to do their federal, income taxes.

If the measure is that it's only to comply with federal law, I would ask that we consider, if you would consider making sure that those that pay taxes, whether it being through a Social Security number or a legally assigned IT number, that they also benefit from your proposal, again, because they do pay taxes as well just like I did.

And that's my concern, and I just wanted to ask if that's something that you would consider.

Happy to consider, especially as minority myself. I understand what you're saying and happy to consider that.

Thank you. Thank you, Mister Chair.

Thank you very much. Appreciate you, your question. And you may close if you wish.

Thank you so much. I respectfully ask for an aye when appropriate.

Thank you very much. And this item is a suspense item candidate. I thank your witness for appearing as well. Thank you. T

Let me just check. I think we have checked all the boxes, and we have completed all the business as before the Revenue and Taxation committee, and this committee stands at adjourn. Thank you.