Assembly Standing Committee on Revenue and Taxation

Thank you, mister chair and members. I wanna thank the committee staff as always for your work and collaboration on this bill. I'm proud to present AB 2084, which promotes continuity of services and prevents disruptions to California's nonprofits. As we all know, California's non-profits are often the backbone of our community helping our most vulnerable protect themselves, especially in moments when perhaps they need food from a food bank or support from a religious institution or another.

And recently, we've experienced, federal scrutiny around nonprofit organizations regarding their taxes on SADHISH, which leads to uncertainty at the state level.

So what we wanna do here is make sure that the state has a moment to pause before they react to federal, changes in their nonprofit status. Under current law, when federal status is stripped, the the California franchise tax board is required to revoke state tax exempt status, and they don't have the authority to delay or review the action before nonprofits are hit with state revocation as well.

So this address this with a very narrow gap by giving the franchise tax board authority to use its discretion to maintain state income tax status for nonprofits that sought original exemption through a streamline 3,500 a. I'm not gonna get into the details. My witness can do so if you're curious if it occurs not related to legal eligibility for revocation.

So again, this is incredibly narrow. It's crafted so as to ensure that we have additional oversight at the state level and not less over sight. And it is ensure here to ensure that California retains control over our own standards to protect organizations from consequences beyond their control. And with me to testify in support is Jennifer Fearing, Sacramento advocate for the California Association of Non-profits.

Thank you very much. Two minutes.

Good afternoon, chair and members. Jennifer Fearing with California Association of Non-profits. We're a 10,000 member organization statewide policy alliance. We're proud to sponsor AB 20 '80 four, and we're grateful to the author for helping protect the stability of California's nonprofit sector. Since 2008, nonprofits can pursue state tax exempt status expeditiously by filing the FTB's 3,500 a form, which relies on the Federal Government's five zero one c three determination.

This reliance creates both efficiency and precarity. If the Federal Government revokes a nonprofit tax exempt status even for political reasons, the FTB is required to automatically revoke that revoke the state status as well. And we are hoping with this, to give them the opportunity to evaluate the merits of this action for all of the nonprofit, and we think it's roughly 22% of charities in the state have utilized have utilized that form to gain that status.

Since threats began emerging in early twenty twenty five, Cal Nonprofits has continued to urge the 3,500 a nonprofits to initiate the longer form process and get independent validation of their state tax exempt status. But we are only here requesting this change in law because of specific and unprecedented threats and executive orders targeting nonprofits for their speech or mission driven work rather than actual wrongdoing.

With their tax exempt status in jeopardy, a non-profit can find its grants and payments frozen facing new tax liabilities and possibly reducing their provision of essential services. AV twenty eighty four is a common sense solution giving FTP discretion to evaluate the appropriateness of state sex status revocation if a federal revocation was not due to wrongdoing.

This bill is about protecting our state's right to safeguard nonprofits that our residents rely on every day, and the objective aligns with the state sovereignty goals and protections of AB 1318, which the governor signed into law last year, giving California nonprofits eligibility for state support based on state level standing and not federal status alone. Wish you we appreciate the author's leadership and urge your aye vote.

Thank you very much. Anyone in a room wishing to register your support name, your position, and this support, please step to the microphone.

Hi. Molly Mala on behalf of Planned Parenthood Affiliates of California in support. Thank you.

Thank you.

Good afternoon. Dani Kando Kuzer on behalf of Cameo Network in strong support.

Thank you. Seeing no one else wishing to speak and support, any primary opposition, should you please hearing and seeing none, anyone in the room wishing to express opposition to 2084? Please accept the microphone. Hearing and seeing none, wanna bring it back to the committee. Any members wishing to ask questions?

Hearing none or seeing none. Just one question to the author. Just to be clear, this intent of this bill is that this would be only applying or only apply 501C3 non-profits. Is that correct?

Yes.

Just wanna be clear. Great.

Thank you.

Thank you very much for appearing. And Misses Bauer Kahan, you may close if you wish.

Thank you, mister chair and members. And I just wanna reiterate that nothing in this bill will stop the state from revoking status for fraud or any other violations of the law. It just ensures our own separate oversight process. And that I respectfully ask your aye vote.

Thank you very much. This bill is referred to our suspense file. Thank you and your witness for appearing. We don't see mister Ward.

I'm sorry? mister No. Miss. Oh, wait a minute. No. Rambula.

Excuse me. We have, doctor Rambula, AB, 2270. File item number three. Thank you very much, sir. You and your witnesses?

I do. And you may proceed when ready, sir. And this is file item number 3 AB 2270.

Thank you, mister chair. I wanna start by thanking the committee for their help with this bill. California's farm workers are an essential part of our state's economy and food supply, and yet they oftentimes face some of the most severe housing instability in the entire state. Because farmworker housing must be located near agricultural land, often miles from services such as public transit, libraries, and pharmacies, these projects have routinely penalized in the scoring process for affordable housing projects.

Amenity proximity scoring assumes dense service patterns that agricultural communities where farm workers live to acts must live to access employment rarely meet.

The result is that farm worker housing projects are made less competitive for funding by a scoring system that does not reflect agricultural land use realities. To provide farmworker housing better, access means to low income housing credits, AB 2270 creates scoring parity with the seat pack scoring criteria for farmworker housing projects recognizing the geographic realities of agricultural communities. Members, this is the first hearing of the bill. I will continue to work to address concerns.

And with me today to testify in support is La Cooperativa De Campesina.

Thank you very much. You have two minutes.

Thank you, chair and members.

Can you push the microphone first too? Yeah. Thank you very much.

Here it is.

Here's Marvin Pineda with La Cooperativa.

Great.

Yeah. Thank you. If I may, Assembly member thank you, chair members.

You have two minutes.

What was that? I'm sorry.

You have two minutes.

Thank you. Marvin Pineda with California Advocacy on behalf of La Copurativa Campesina De California. La Copurativa Campesina is are the fairly designated farmworker agencies in California. They provide education, training, job placement, housing, energy, and other services to, farmworkers. We would like to request your support for this legislation to ensure that farmworker housing projects can fairly compete for tax credits in the low income housing tax credit program.

As mentioned, previous investment in Rambula, farmworker housing by necessity must be located near agriculture, jobs, often in rural areas far from these amenities. While farm workers have become more mobile, many times they do not have the transportation or the means to travel long distance to jobs. As a result, these projects are disadvantaged, not because they are lower quality, but because the scoring criteria do not reflect rural realities. This creates structure barriers for housing projects for farm workers in agricultural regions.

To be eligible for the low income housing tax credits, a project must must receive at least 10 points in amenities.

To be competitive, they must receive at least 15. Current farmworker projects have a difficult time receiving even 10 points. This is this is about fairness and equity, ensuring the farmworker housing is evaluated based on the realities of where farmworkers live and work. We respectfully ask for an eye vote and happy to answer any questions you may have.

Thank you very much. Next witness? Or is this the only one with thank you very much. Anyone wishing to speak in support of twenty two seventy, please step to the microphone, your name, your organization, and this is support only.

Alejandro Solis on behalf of Los Amigos de La Comida, in support. Thank you.

Thank you very much.

Salvador Lopez on behalf, Center for Employment and Training and Central Valley Opportunity Center, we support.

Thank you.

America Martinez and on behalf of California Human Development and Proteus, we support.

Thank you very much. Seeing no other witnesses, primary opposition. Anyone in the room, primary opposition? Hearing and seeing none. Anyone in the room wishing to register your opposition to 2270?

Hearing and seeing now, I wanna bring it back to the committee. Any committee members? Miss Short Sharon Quirk Silva.

Yes. I wanna appreciate the author and the supporters on this bill. As we look at our low income tax credits, we know they're very competitive, but they're often the tool needed to get a project across the finish line.

And even though the state over the years has invested some dollars into farmworker housing, if you can't build the project because you don't have that last gap funding, then we certainly need to do everything we can to make sure that this point system doesn't lock them out of this possible gap funding. So with that, I support this bill.

And we are voting on this. So I would, move the legislation and, would wish the best, for these future projects because we know any project is difficult to get across the finish line.

Thank you. Thank you very much. Miss Rambler, you may close.

Thank you, mister chair, for your committee's work and for your support, and I respectfully ask for an aye vote. Thank you very much.

Do I hear a second missus Quirk Silva already moved? Seconded by miss Rodriguez? Thank you very much. This bill this bill is do passed to the committee on housing and community development. Miss Highlander's already received a motion and a second.

Would you please call the roll?

[Roll Call]

That bill is on call.

That bill is on call. Thank you very much. We will keep the roll open for absent members. Thank you very much. We will go to file item number 4 AB 2167.

Macedo. Welcome. You may proceed when ready, and your witnesses have two minutes each.

Thank you, mister chair.

Thank you.

Good afternoon, mister chair and members. I am here to present AB 2167, a follow-up measure to last year's Assembly Bill 1485. Last year, you supported AB 1485, which helped open the process for tribal land return transactions by extending the welfare exemption and documentary transfer tax treatment to land held by federally recognized tribes or its wholly owned subsidiary for conservation purposes.

This bill, AB 2167, clarifies that corporations chartered pursuant to tribal law are also eligible under these existing provisions. It does not create a new category of land, and it does not change the underlying conservation purpose of the exemption.

When current law expressly names one tribal structure but not another, similarly situated tribes can be treated differently based solely on how they organize their own governmental entities. The same guardrails remain in place. This bill only applies within the existing tribal conservation property tax exemption and the existing documentary—documentary transfer tax exemption for qualifying tribal land return transactions. Tribes should not lose access to the framework the legislature already approved because their governing documents use a different ownership structure.

It is also consistent with the reality that tribal governments are sovereign governments and may organize their entities differently based on tribal law, tribal governance, and operational needs.

AB 2167 also includes reporting language so the legislature can track the number and value of qualifying transactions, the amount of tax exempted, and acreage reclaimed. With me today are Chairman Benjamin Clark of Moreton Rancheria and Michelle Lee, tribal attorney, to speak in support.

Thank you very much. Two minutes each. You may proceed.

Good afternoon, chair Gibson and committee members. I'm Benjamin Clark, the Tribal Chairman for Moreton Rancheria of Maidu Indians. I'm here today to show our support for AB 2167, a bill to clarify language in last year's AB 1485. I want to thank Assemblywoman Macedo for her leadership and support of tribal sovereignty in carrying this bill. AB 1485 expanded the eligibility for the welfare exemption from property taxes to federal recognized California tribes and their wholly owned entities.

Tribes are sovereign governments with the ability to organize in the best interest of the tribe. In doing so, tribal governments have the ability to establish both wholly owned subsidiaries and corporations chartered pursuant to tribal law. A stated goal of a AB 1485 is to promote tribal self determination and long term environmental preservation by enabling tribes to hold and maintain land in its natural state without inquiring additional transactional tax burdens.

This amendment ensures that California tribes may seek the exemption utilizing the best form of entity from them to manage lands for proposed conservation. We ask that you vote yes on AB A2167, and we thank you for your support.

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

Alright. Good afternoon, Chair Gipson and the committee. My name is Michelle Lee, and I'm an attorney for Moreton Rancheria. I wanna thank Assemblywoman Macedo for her leadership as the state of California finds its ways to support tribal land return projects. Including corporations chartered pursuant to tribal law, along with wholly owned tribal entities in Revenue Tax Code Section 21, 20—214.03—recognizes the unique structures that may be included in a particular tribe's laws.

So, for example, a tribe may seek to establish a tribally chartered nonprofit entity to serve as the tribe's land trust to take advantage of the welfare exemption, or it could create a department within the tribe to hold title to the land and property consistent with the statute.

What AB 2167 does is it accommodates and it reflects that in the law. While both may be wholly owned tribal entities from a really strict interpretation, tribal governments on our side may view them differently and our tribal laws may describe them differently, and because they may treat a governmental arm of the tribe as a wholly owned subsidiary and a tribal corporation as a sep—as a separate entity—in their organizational chart because it's governed by separate board of directors.

So, tribes have options when choosing to form their entities and failure to include corporations chartered pursuant to tribal law from AB 8—1485—this, earlier this year, may conflict with the tribes' governing documents and create barriers to applying for the welfare exemption.

And I also wanna point out that in December, the IRS issued a final rule regarding entities wholly owned by Indian tribal governments, and this regulation established that entities wholly owned by tribes and organized or incorporated under the laws of one or more of the tribes that own them are, are not considered separate from tribal governments. So, this 2167 will ensure that state and federal law is harmonized, and we ask for your support.

Thank you.

Thank you very much for your testimony. Anyone wishing—in the room wishing to speak in support of 2167, would you please line up your name, your position, and this is support?

Afternoon, Mr. Chair, members of the committee. Alex Alanis, on behalf of the Habomatol Pomo of Upper Lake, in support.

Thank you very much. Anyone in the room for primary opposition, would you please come to the front? Seeing none.

Anyone in your room wishing to speak in opposition to this measure, would you please head to the microphone? Hearing and seeing none. Bring it back to the members. Anyone wishing to speak? Hearing and seeing none. To the author, can you please explain the deficiency in current law that this bill seeks to remedy?

This bill is needed because clarity matters in tax law, but I would defer to the attorney here that probably knows the tax law better than I do.

Sure.

Thank you. Concerns that we have is that when tribes start forming their entities to take advantage of the welfare exemption, that there will be concern on the tribes point because their tribal laws, the words that they use in their tribal laws differ from the regulation. And we don't think tribes should have to take time and legal counsel to try to figure out how their entity could be changed to fit in the regulation.

We're also concerned that the Board of Equalization—staff there changes over time, and they might not be familiar with all the different types of entities that tribes have. And we don't see anything wrong with having clarity and showing that all these tribal forms of entities that tribes do utilize today are recognized as eligible for the welfare exemption.

Does that answer your question? It's really about respecting tribal sovereignty and respecting the way the tribes organize themselves.

Okay. Thank you very much. You may close.

Respectfully ask for your aye vote.

Thank you very much. This bill will refer to our suspense file. Thank you, witnesses, for coming, and thank you.

Thank, thank you.

You have another bill.

You get two of me today.

I get two. So, file item number 5, AB 2336, and you may proceed when ready.

Good afternoon once again.

Yes.

Assembly bureau bill two three three six is a measure to confront California's affordability crisis. As you know, the cost of living is financially straining for so many families. AB 2336 provides meaningful tax relief for working Californians by excluding the first $25,000 of overtime pay from taxation. AB 2336 also helps seniors by excluding the first 25,000 of pension from retirement benefit plans.

This bill will allow residents to keep more of their hard earned money in their pockets, making it more feasible to live and work in California.

Between record high gas prices and utility costs, simply getting to work has become a financial burden. For many in our working class, rent alone is swallowing up two thirds of their take home pay. By providing this tax relief, this legislature can directly help families navigate the rising cost of living. Overtime workers include our restaurant employees, health care professionals, truck drivers, law enforcement officers, and skilled trade workers like electricians and plumbers. These individuals are the backbone of our society.

They need this relief to pay the bills. Many seniors are on fixed incomes. They cannot afford the rising cost of energy and other basic necessities. Excluding the first $25,000 from retirement pensions from taxation will help prevent seniors from having to reenter the workforce out of necessity. With me today to testify on this bill is Tim Taylor with the National Federation of Independent Business and Scott Kaufman with Howard Jarvis Taxpayer Association.

Thank you very much. Two minutes each.

Mister chair, members, good morning or good afternoon. Tim Taylor. I'm the policy director for the National Federation of Independent Business. Small businesses are the foundation of California's economy, and the people who power those businesses, our hourly wage earners and working families are under real pressure. There's one issue I think that everybody in this building, regardless the party agrees on, and that's affordability.

It's not a talking point. It is a defining economic challenge facing California today. Housing costs, energy costs, prices of gasoline at the pump continue to rise, putting real strain on working families. For many workers, overtime is not optional. It is essential.

It is how they stay afloat and provide for their families. This is why this bill is so important. AB 2336 takes a simple, commonsensical approach to affordability. It allows workers to keep more of what they earn, especially when they put in extra hours. When someone works overtime, often in physically demanding jobs, they should not see that effort significantly diminished by taxes.

Letting workers keep more of their overtime pay is not just fair, it directly improves affordability for the working middle class. And when people keep more of their earnings, they do not put it under a mattress. They spend it in their communities. They save it. They invest invest it, and sometimes they even take a monumental step to create a small business themselves.

That is how local economies grow from the ground up. This is not static math. It's dynamic. Incentives matter, and AB 2336 gets the incentives right. And at a time when California is potentially projected to lose multiple congressional seats in twenty twenty thirty, as earners leave for more affordable states, we should be doing everything we can to keep hardworking Californians here.

Policies like AB 2336 send the right message that hard work is valued and that effort is rewarded. I wanna thank the assembly member for authoring this bill and focusing on real affordability solutions for working families. For these reasons, NFIB recommends an aye vote. Thank you very much.

Thank you very much. Next witness.

Good afternoon, chair and members. I'm, again, for the record, Scott Kaufman, the legislative director for the Howard Jarvis Taxpayers Association. We are here in strong support of Assembly Bill 2336. AB 2336 will provide tax relief and directly put money back into the pockets of everyday Californians by exempting the first 25,000 of overtime pay and retirement pensions from taxation.

For retirees and hourly employees like truck drivers, plumbers, and others, this bill isn't just about a tax exemption, it's about the ability to continue to afford life in California. Currently, taxing this overtime pay and retirement pensions is a penalty. When employees take on extra hours to cover the right rising cost of gas, groceries, and utilities, and a significant portion of that extra effort is heavily taxed. AB 2336 fixes this by exempting the first 25,000 of overtime and pension income. We are telling hard working employees that their extra efforts belong back in the pocket of their families, not the state.

We believe that the best way to support Californians is to let them keep more of what they earn.

AB 2336 is a step in the right direction to provide direct, targeted, and necessary relief against the rising cost of living. We we we respectfully ask for your aye vote at the appropriate time.

Thank you very much. Anyone in the room wishing to speak in support of Assembly Bill twenty three thirty six, should you please line up? I don't see anybody rushing to the microphone. Okay? Anyone wishing to primary opposition to this bill, would you please come have a seat at the table? Primary opposition to AB 2336. We invite you to the table.

Chair and members, I'll be very brief. Danny Kando-Kaiser on behalf of, my colleagues, the California Teachers Association, who are members of the California Tax Reform Association, respectfully opposed AB 2336 as part of a larger, set of bills that are gonna be coming in front of this committee that represent about $94,000,000,000 in losses to the general fund. So we do ask for a no vote.

Thank you very much. Anyone in the room wishing to speak in opposition to Assembly Bill twenty three thirty six, Please come line up. Hearing and seeing none, wanna bring it back to the committee. Any questions of committee members? I have one one question to the author.

And I also agree with your comment putting more money back into the hands of Californians. I think we all wanna do that, and you talked about affordability, and also middle class. However, I noticed in the bill that there is no particular is there a particular reason why you didn't put income limitation in this bill? So it's open for anyone?

No. But we'd be open to working with you on that.

Okay. Because right now as a stand, anyone could.

Right. We were trying to figure out what was going to be the sweet spot of this. And we really wanna keep money in the pockets of people that it's going to help with them affording everyday life, and they're also then able to spend that in their communities to help stimulate businesses and the economy. So we are very open on this bill to taking amendments that make it, more suitable to benefiting Californians.

Okay. Thank you very much. With that, you may close if you wish.

Respectfully ask for your aye vote.

Thank you very much. This bill will refer to our suspense file. Thank you. Witnesses are coming, and thank you for coming as well.

You very much, mister chair.

It's so good to see you too.

Thank you.

So we're looking for authors. We have some authors that's on our committee. Let me see in order. Yes. So we're gonna go to file item number eight. AB2205, worked silver.

And then McKenna and then Rodriguez if we don't have any other authors. Okay. So let me get those pages.

Hello?

Hi.

You may commence when ready.

Good afternoon, mister chair and members. Today, I present AB 2205, which reinstates California's new employment credit. This credit has been a key tool to help businesses create full time jobs in communities with high unemployment and poverty. Originally in place from 2014 through 2025, the new employment credit helped drive job creation and economic investment in areas that need it most. However, the credit expired at the end of last year.

Without it, businesses have lost a targeted incentive to hire and expand in underserved communities. AB 2205 simply brings this program back. It extends the credit for future tax years without changing how it works. This allows businesses to continue hiring full time workers while investing in communities that often face barriers to economic opportunity. The program also supports individuals who face challenges entering the workforce, including veterans, individuals who have been unemployed, and those receiving public assistance.

By restoring this credit, we are supporting job growth, strengthening local economies, and creating pathways to stable employment. With me today to testify and support and answer any questions is John Stump, CEO of Flint Builders Incorporated, and Don Papi Papi Yep. On behalf of the California Manufacturers and Technology Association.

Thank you very much. Two minutes. Don or either Jennifer Lopez at first.

Great. Thank you, mister chair. Members, Dawn Koepke on behalf of the California Manufacturers and Technology Association. Sorry. Ran down the stairs from another hearing.

And strong support of a v twenty two zero five and the reinstatement of California's new employment credit. As you know, CMTA works closely with manufacturers and other employers across the state, many of which operate in designated geographic areas, communities that need economic investment the most. We've seen firsthand how the new employment credit has made the real difference in these communities.

This credit doesn't just encourage hiring, it enables businesses to create new jobs, invest in workforce training, and provide meaningful long term opportunities to individuals who often face barriers to employment. Amid significant cost pressures across the board, many businesses are reconsidering potential expansion, slowing hiring, and reducing investments in their workforce.

These impacts do not just affect businesses. They will be felt most in the very communities this program is designed to support. With mounting concerns over unemployment in the state and affordability challenges for Californians, what better way to incentivize businesses to hire new staff than this bill? At its core, a d twenty two zero five is not just about tax policy.

It's about sustaining and further bolstering economic growth and supporting employers, particularly manufacturers, and ultimately creating pathways to unemployment to employment for Californians who need such opportunities the most. For these reasons, we are pleased to support AB 2205 and respectfully urge your aye vote.

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

Mister chairman, many members, thank you. My name is John Stump. I'm the president of Flint. We're a general contractor here in Sacramento, and we build primarily new schools, k through 12 schools, community colleges, and higher education. We also do health care, mental health facilities.

This particular, bill or or incentive expired in December, 2025, but it has been an important tool in helping us expand our company from Sacramento to the Bay Area and now into Southern California. During that time, we added more than a 100 self performed construction workers to our payroll. In addition, we supported hundreds of millions of dollars in construction payroll through subcontractors who help us deliver the projects we built.

Over the years, Flynn has used the NEC to help recruit young people into the construction industry from our regional high schools and community colleges. And regional high schools and community colleges.

As you probably know, that's not easy these days. It's a it's vital for California to attract and retain this workforce because without enough skilled people entering the trades, the cost of construction will continue to rise, and project timelines will continue to stretch. Continue to rise and project timelines will continue to stretch. Without tools like the NEC, California businesses face greater pressure, and I believe we will continue losing workers an opportunity to lower cost dates.

For our company and for our subcontractors, the NEC supports construction career creation, workforce stability, and continued investment in the communities where we live and work. Restating reinstating this credit would help Flint and our subcontractors to keep building opportunity here at home. I respectfully urge the committee to support AB 2205 and restore and extend the NEC for an additional five years.

Thank you. Thank you very much. Anyone in the room wishing to speak in support of twenty two zero five, name your organization and this in support.

Good afternoon. Tim Taylor with the National Federation of Independent Business in support. Thank you. Thank you.

Good afternoon. Udi Carrasco, Carrasco LLP in support.

Thank you.

Mister chair, Chris McCauley on behalf of the Los Angeles Area Chamber of Commerce in support. Thank you.

Thank you very much. Primary opposition, would you please step forward? Oh, he was just stepping. He wasn't coming. Okay.

Anyone in the room wishing to speak in opposition to this measure twenty two zero five? Hearing and seeing none, I wanna bring it back to the committee. Any members wishing to speak to the witnesses or the author on this measure? I have one question for the author. Have any advanced manufacturer claims the credit since its expansion in 2023 to your knowledge?

I wanna answer that. Mister chair, I am not familiar with that being the case, but we'd certainly be happy to go back to our membership and just inquire. That was I apologize. That wasn't a question I was prepared for today, but certainly, we can look into it and get back to the committee.

Thank you. Thank you very much. Miss Quirk Silva, you may close if you wish.

Just to encourage support for this tax credit that encourages businesses to hire full time employees in designated high need areas.

Thank you very much. This bill will be referred to our suspense file. Thank you, witnesses, for appearing. Thank you. K. We have an author. We have mister Ward file item number two, a B2222. Thank you very much, mister Ward. And you have witnesses, mister Ward?

I do.

Great. You may proceed when ready.

Thank you, mister chair and members. I wanna thank you for the opportunity to present DV twenty two twenty two, the Community Newsroom Employment and Workforce Sustainability Act or the Community News Act. I also wanna thank the committee and staff for working with my office on, crafting this bill. The Community News Act is a targeted response to the ongoing collapse of local journalism. Across California, newsrooms are shrinking, reporters are being laid off, and too many communities are becoming news deserts.

When local news disappears, we see declines in civic engagement, voter participation, and government accountability. And this bill addresses that by directly creating a refundable tax credit for local news organizations, which hire and retain journalists. The structure is straightforward. Up to 20,000 for each of the first five journalists, 15,000, for each additional journalist thereafter, an additional $15,000 for each new journalism position created. Importantly, this credit is refundable.

So it works for small independent and non profit outlets, not just large corporations. The bill is also carefully constructed with guardrails, transparency and ownership, limits on political influence, requirements for editorial standards and accountability. And this ensures that we are supporting local journalism without influencing content. With me to speak in support of the Community News Act are Matt Pierce, the legislative director of Rebuild Local News, and Bob Butler, the vice president of broadcast at SYK AFTRA.

AV twenty two twenty two is ultimately a jobs bill and a democracy bill, helping to keep reporters in communities and ensuring that Californians have access to trusted local information. When the time is appropriate, I respectfully request your aye vote.

Thank you very much. First witness, two minutes.

Thank you, chair Gibson, vice chair Sanchez, and esteemed committee members. I am the director of policy for Rebuild Local News, Matt Pierce. And we're the leading nonpartisan, nonprofit coalition developing effective public policies to strengthen community news and information. We are proud to join assembly member Ward in sponsoring AB 2002/22. The Community News Act should create a refundable tax spreads to support local journalist jobs and all sorts of community news organizations across California.

California has lost, 75 of its local journalists over the past two decades. We rank in the bottom 10 of US states in terms of journalists per a 100,000 people. Academic studies say that when communities lose their local journalists, bond prices increase for local taxpayers because there are fewer people watching local spending. Loneliness increases because fewer people feel connected to their neighbors. Fewer voters know who their elected officials are.

Fewer voters are following committee hearings like this one. When a town loses a local reporter, it affects all of us. The Communities Act is based on similar laws recently enacted in Illinois, New York, and New Mexico with broad support from lawmakers and local news stakeholders. It's carefully designed first amendment friendly approach that doesn't require program administrators to pick winners and losers in a way that could risk the editorial independence of our local news outlets.

Community News Act has been endorsed by a coalition that includes local independent news outlets, unionized news workers, journalism educators, and ethnic media. We're We're also currently engaging other stakeholders on technical feedback to ensure this approach can be accessed equitably across the whole ecosystem. We respectfully encourage your aye vote.

Thank you very much. Next week.

Thank you. Minutes. Assembly member Gibson, assembly member Sanchez, thank you for the chance to speak. My name is Bob Butler. I'm the vice president for broadcasters for SAG AFTRA.

I bring you greetings from our president, Sean Astin. You may know better as Rudy or Sam from Lord of the Rings. I'm here, on behalf of my union's a 160,000 members, many of whom are broadcast journalists like me, who will see the value of doing what needs to be done to ensure a thriving future for the journalism profession. I became a journalist because I believe the public has the right to know what's going on in their communities, the nation, and the world. I also believe strongly in the importance of speaking truth to power.

The work we do sometimes angers those who don't like it. I've done that many times. It does not make me fake news. It's work that needs to be done to maintain a healthy democracy. With federal defending of public media in 2025, which may now be reversed, and now the shuttering of CBS News Radio after ninety nine years of service, our nation has lost a lot of access to essential informational source sources.

Not to mention the harm unchecked AI and social media platforms have done to divert Internet traffic toward polarizing and unreliable content. When you ask people who they trust more, the local journalists or the national journalists, local journalists went out every time. I've been in this business for nearly fifty years. I spent forty two years at KCBS radio in San Francisco. I've never seen professional journalists encountered so many colossal threats to their professions and their selves as they have beginning in 2015 and even more so since January.

A bill like Assemblymember Awards AB 2222 never been more urgent. Let's incentivize the hiring of professional journalists. If it were those employers who hire local journalists to their staffs, let's all be a part of this valuable investment into safeguarding democracy and the community level. A job attention credit is a small price to pay during a time when access to factual information is under threat. Let's arm our democracy and preserve our community's unfreetted access to information. I encourage you to put AB 2222 across the finish line, and don't keep us in suspense too long. Bob Butler, KCBS in Sacramento.

I love it. Thank you very much. Anyone in the room wishing to speak in support of AB 2222, please come to the microphone, your name, your organization, and this is support.

Yeah. Thank you. Jano Torekine on behalf of Latino Media Collaborative and Media Guild of the West in support.

Thank you very much. Any primary opposition to this measure to please come forward? Seeing no one coming forward, anyone in a room wishing to speak in opposition of this measure, You have the same right. Seeing and hearing none, bring it back to the committee. Anyone wishing to speak?

Yes. Miss Quirk Silva.

Not only do I support this, but all of the efforts that I know that you are moving forward related to journalism. We are in a new frontier as we think about journalism, but journalism is one of the last communication efforts that's based on facts. And with streaming, with blogs and posts and social media, it's becoming harder and harder for the public to understand what's real and what's not real. And at every turn, we see the shrinking of our, as we said, news newspapers.

One of the things as a former teacher, we can look to literacy and understand that many of us grew up with newspapers coming to our homes, not just newspapers, but maybe magazines, this type of information. And as was stated in your remarks, slowly but surely, we have seen all of these communication pieces pretty much wiped out. And so we wonder why young kids and families who might have gone to the doctors and picked up a magazine and read it with their parents or a newspaper that those conversations aren't happening.

And so we are relying on these very quick posts that people are taking for fact. And it's it's really become destructive, very destructive, where we once used to have civil discourse and debate.

And now we see that it's us or them and facts that are only related to what media posts someone is is watching or listening to, and it's really fractured our society. And anything we can do to get back to common sense news based on facts is something that I will be happy to support.

Great. Thank you. Miss McKinnor

And I'd like to thank the author for this bill, and I'd like to be a coauthor. Thank you.

Give me a second.

Great. With that, I just have one quick question for you, mister Ward. Why is the, the credit a fixed amount instead of a percentage amount for the wages for new hire journalists?

I'll defer to our witness on the how they how they landed that number.

Yes. This is similar to the law that was first enacted in Illinois. We have in our ecosystem, the majority of local news outlets are very small local news outlets, and part of their spending is on freelance, which is not covered by this bill. So part of the part of the amounts are to reflect the reality for those organizations that when they hire an actual staffer, it it may not reflect the full extent of their spending.

Got it. Okay. Thank you very much. Mister Ward, thank you very much. You may close if you wish.

Thank you, Mr. Chair, members. Thank you for the support of comments. I'm very happy to have another co author coming out of this committee, should this bill come out of this committee. You know, I think that we all very deeply appreciate the value of local news that we have, whether it's our kids growing up on the educational programming, family friendly content that we're able to produce, historical art of, exposes, are very specific to your local community.

I mean, this is content that you just can't get anywhere else, and keep your community enriched and really connected to itself, and the greater world around it. So we know that stations across the Golden State are shuttered. We know that employees are losing their jobs, and many of our outlets and affiliates budgets are deeply threatened and cannot rely on a backfill of philanthropy alone. So now is the time.

We don't have another year to step up and do what we can to help support these jobs, but importantly, to be able to help support these institutions that are so vital as our colleague had also really referenced.

You know, if this goes away, we are relegated to a world that is very on unlimited and very suspect news. And we know the outcomes and and the dire future that would hold for many of our communities and democracy. I would respectfully request your aye vote.

Thank you very much, and thank you, witnesses, for appearing.

Sure. Can I add one thing? As a journalist, you can go ahead and put more money in there, not just 20,000.

Thank you very much. This bill will refer to our suspense file. Thank you very much.

Thank you, chair.

Next, we will have file item number nine. Oh, yes. Let's do that. We're gonna ask the secretary to please open the role on file item number three AB 2270 for the absent members.

Korea Demayo Mckinor. Aye. Mckinner, I that bill has passed.

Vote change. I'm not voting to know.

Sanchez not voting to know. Okay. That bill has passed.

Great. So file item number three, AB 22 Sorry. One. Eight okay. AB 2270.

That bill is out. It's four to one. Thank you very much. Next, we'll move to file item number nine, AB 2186 by McKenna. Miss McKenna, you may begin when ready.

Mister chair and members, AB 282186 ensures that future reparation payments are not undermined by state taxation. For generations, descendants of formerly enslaved people have been denied both justice and economic growth. Reparations are intended to repair that harm, not be partially taken back through taxes. Under current law, any future reparation payments could be treated as taxable income, reducing the impact of those benefits.

That outcome runs counter to the purpose of reparations, which is to provide meaningful and complete redress for historic and system injustices.

AB 2186 addresses this issue by excluding reparation benefits from California personal income tax for taxable years beginning on or after 01/01/2027 through 01/01/2032. This bill broadly defines reparation benefits to include monetary payments, grants, trust distributions, debt forgiveness, and other forms of financial compensation provided through state, local, or federal reparation programs. By establishing a clear exclusion in statute, this bill ensures that these benefits reach recipients in full and are not diminished before they can have their intended impact.

It also provides clarity and certainty for both recipient and tax administrators as California prepares for future reparation programs. This bill is about ensuring fairness and making sure that rep reparation functions as a true repair.

Our my witness today is Tanisha Herring. Did I say Tanisha? Tanisha Herring, NAACP California, Hawaii State Conference. Thank you.

Good after good afternoon,

mister Thank

you very much. You have two minutes.

So sorry. No. It's okay.

Good afternoon, mister chair and members. As the great assembly member said, my name is Tanisha Herring, serving as government relations specialist for the NAACP capital Hawaii state conference. The author is right in that taxing reparations undermines their purpose. From our perspective on the ground, this is not abstract. Descendants of formerly enslaved people who receive these benefits are often the same communities navigating the widest wealth gaps in the state.

A tax liability on reparations payment is not a technicality, it's a reduction in justice. Californian has already done the work. The task force process produced a comprehensive record of documented harm. Eighty twenty one eighty six honors that record by ensuring the legislative infrastructure catches up. A reparations program without tax exclusion is an incomplete program.

We want to highlight the bill's inclusive definition of reparations benefit. By covering monetary payments, grants, trust distributions, debt forgiveness, and other financial compensation at the state, local, and federal level, AB 2186 future proofs this exclusion. Whatever form of reparations ultimately take, this bill ensures the protection follows. California has excluded other categories of compensation from gross income before disaster relief, certain legal settlements, federal COVID relief payments, excluding reparations benefits is consistent with that precedent. This is not novel, this is principle.

The five year window through 2032 is reasonable and gives the legislature time to evaluate and extend. We would encourage members to view this as a floor, not a ceiling as reparations programs develop. The state conference urges an I the I vote on AB 2186. Thank you.

Thank you very much. Anyone in the room wishing to speak in support of AB 2186, please approach name organization and this is support.

Good afternoon. Jim Weinberg, Friends Committee on Legislation of California in support. Thank you.

Thank you very much. Primary opposition to this measure, would you please come forward and have a seat at the table? Hearing and seeing none. Anyone in the room wishing to speak in opposition to this measure? You have the same right. Hearing and seeing none, bring it back to the committee for any committee members wishing to speak or ask the author any questions. Hearing and seeing none. You may close if you wish, miss McKinnor.

AB 2186 is about integrity. If since the state determines that reparations are warranted, then we should not diminish that relief through taxation. This bill ensures that what is promised will be delivered, and I respectfully ask for your eye vote.

Thank you very much. This bill will be referred to our suspense file. Thank you, witness, for appearing. Thank the author for bringing this measure before this committee. Thank you.

We have Messuria. File item number 6AB2377. We're getting close, miss Roger. I guess we're getting close. You may proceed when ready.

Thank you, chair and members. AB 232377 accelerates California's schedule of tax deductions for the depreciation of new manufacturing equipment, allowing fifty percent first year depreciation statewide and one hundred percent first year depreciation for equipment cited in high need areas. When new manufacturing projects are undertaken, they very frequently require significant upfront investment in equipment and technology. To incentivize these costly but vital investments, local, state, and Federal Governments allow the depreciation value of this equipment to be deducted from a business's taxes.

As California competes globally and across The United States to develop its manufacturing sector, the favorability of depreciation tax deductions plays a major role in encouraging continued economic development and innovative innovation in the state.

However, while federal tax laws allows businesses to recover the cost of capital investments quickly through full first year bonus depreciation deductions, California generally requires businesses to depreciate equipment over many more years. For example, a piece of manufacturing equipment with a useful life of seven years may have 100% of its value deductible in its first year federally or in other states, But in California, only 14.92 percent may be deducted with the remainder spread out over seven years.

This gap can discourage capital intensive manufacturing operations from locating or expanding in California, even as the state attempts to drive economic development in disadvantaged regions like the Central Valley. AB 2377 directly addresses this gap by allowing qualified businesses to deduct 50% of the cost of eligible equipment in the first year while allowing a a 100% deduction for investments in areas with a 150% or more of the state's poverty and unemployment rates.

This approach increases the effectiveness of the California's tax deduction for manufacturing equipment without increasing the total value that is tax deductible for any piece of equipment. By by allowing full first year depreciation within high need areas, AB 2377 also drives investment and job creation within historically underserved and disadvantaged areas of the state like the San Joaquin Valley. When we have productive converse we we've had productive conversations with the franchise tax board around the implementation challenges with the bill that are outlined in the committee analysis, and we are committed to address these concerns.

By improving the financial outlook of projects in their critical years, AB 2377 will help attract new manufacturing projects, create high quality jobs, and strengthen economic development in disadvantaged regions just like the Central Valley where it's needed the most. I'm here with me today to testify in support of AB 2377 are Will Oliver, president and CEO of Fresno County Economic Development Corporation, and Sarah Bridges, policy director for the California Manufacturers and Technology Association.

Thank you both. You have two minutes.

Thank you. Good afternoon, chairman Gibson and members. Thank you for the opportunity to speak in support of AB 2377. I serve as the president and CEO of the Fresno County Economic Development Corporation. And as a EDC, we work every day to help California compete for private investment, job creation, and long term economic productivity.

We see firsthand that manufacturing projects are highly sensitive to upfront project economics. California manufacturing has been relatively flat in recent years and has not kept pace with the broader state economy, which is one of the more reasons that we should not take manufacturing investment for granted. AB 2377 is a targeted competitiveness measure to improve earlier cash flow for qualified property placed in service in California with stronger tax treatment for areas of high need, like the Central Valley.

Under the proposed bill, qualified taxpayers would claim fifty percent first year accelerated depreciation and a 105 100% in qualified high need areas. Importantly, this does not represent a permanent reduction in the state tax base as much as a timing shift in cost recovery.

That timing matters because it can influence when investment moves forward, where it lands, and how quickly capital can be deployed. At the federal level, tax treatment has become more favorable to production investment. So California should recognize those realities and thoughtfully position itself to remain competitive. And we should recognize that other states aren't standing still.

17 states have provided partial or full conformity with Section one sixty eight, So California has an opportunity to lead with a thoughtful, modern approach to investment treatment, while also helping guide investment toward communities that need it the most. And for those reasons, we respectfully ask for your support on AB 2377.

Thank you very much. Next witness.

Good afternoon, Sherry Gibson and members. My name is Sarah Bridges with the California Manufacturers and Technology Association representing 45,000 companies and their 1,200,000 employees in strong support of AB 2377. California manufacturers are operating in one of the most challenging environments in the country. They're navigating high regulatory burdens, rising energy costs, and ongoing supply chain pressures, all while facing increasing global competition and tariffs that make it harder to produce competitively here at home.

These cumulative pressures strain operational decision making and make it more difficult for manufacturers to reinvest, expand, and keep jobs in California. AB 2377 provides a practical targeted tool to help manufacturers navigate these challenges by easing the burden of capital investments. By reducing the upfront cost of purchasing the equipment and technology that manufacturers need to operate efficiently and stay competitive, AB 2377 allows manufacturers to recover the cost of qualified equipment investments more quickly. This matters because it supports continuous reinvestment. Manufacturers are not locked into holding outdated equipment just to realize long term tax benefits.

Instead, they can upgrade, modernize, and deploy more efficient technologies on operational timeliness. That flexibility is critical in today's rapidly evolving industrial landscape. The bill also supports California's climate goals by making it more affordable to invest in newer, cleaner, and more energy efficient equipment, including pollution control technologies. It accelerates the transition to lower emission manufacturing while keeping production in the state with some of the strongest environmental standards in the world. From a competitiveness standpoint, California continues to lag behind federal policy and other states in how it treats capital investment.

This gap puts our manufacturers in a disadvantage when they are deciding where to expand or to locate new operations. A B 2377 helps by making California a more viable operation for those investments. Finally, a v twenty three seventy seven helps address affordability pressures across the supply chain. When manufacturers can better manage capital costs and maintain in state production, it helps stabilize pricing, reduce cost volatility, and support the availability of goods for consumers. We thank you for your consideration. We respectfully ask your aye vote. Thank you.

Thank you very much. Anyone in the room wishing to speak in support of Assembly Bill twenty two seventy seven, your name, your organization, and this support?

Mister chair and members, Steve Hansen from Lighthouse Public Affairs on behalf of the city of Fresno and the West Ventura Business Alliance in support.

Thank you.

Clifton Wilson on behalf of the Fresno County Board of Supervisors in support. Thank you.

Thank you.

Chair Gibson, member of Steinger Field of Capital Advocacy here on behalf of the California Life Sciences in support of AB 2337.

Thank you. Primary opposition to this measure, would you please step forward? Hearing and seeing none. Anyone in the room wishing to register your opposition to this measure? You have the same right.

Hearing and seeing none, bring it back to the committee. Any members from the committee wishing to speak? Hearing and seeing none, you may close.

Thank you, chair. I respectfully ask for an aye vote.

Thank you very much. This, bill will be referred to our suspense file. I thank your witnesses and the author for coming for this committee. Thank you very much. File item number 10.

A B2641, Rodriguez. You may proceed when ready.

Thank you, Mr. Chair and Members for allowing me to present AB 2641. I would like to begin by stating that I will gladly accept the committee amendments. AB 2641 extends the sales tax exemption for individuals who repurchase their own property from a pawnbroker. This is a simple fairness measure that prevents double taxation. When someone is reclaiming their own property, they have already paid sales tax at the time of the original purchase.

Without this bill, they could be taxed again on the same item. This is not a new policy. The legislature addressed this issue in 2021, and AB 2641 simply extends existing law. This bill will narrowly. This bill is narrowly tailored. It applies only to the original owner and requires proof from the proof that sales tax was already paid.

There is no opposition, and this policy has worked without issue under current law. AB 2641 maintains fairness in the tax systems and protects consumers. With me here to testify is Albert Turico with the California Pawnbrokers Association.

Thank you very much. First witness.

Good afternoon, Mr. Chairman, Members of the committee.

Let me first extend my thanks to the author for her leadership on this issue. I'm here to testify on behalf of the California Association of Pawnbrokers, the sponsors of the bill. I will note for the record that you, Mr. Chairman, you ran the first bill to try to address this issue in 2015. We didn't get it done then.

It got done in the in the subsequent budget. With the five year sunset, you introduced the bill to extend the sunset in 2021, referenced by Senator Rodriguez. So we're here once again to extend the sunset in the five years. Respectfully ask for your aye vote.

Thank you very much. Any witnesses in the room wishing to speak in support of this measure, 2641? Just please come forward. Hearing and seeing none.

Primary opposition to this measure 2641. Hearing and seeing none. Anyone in the room wishing to speak in opposition? Hearing and seeing none. Bring it back to the committee.

Hearing and seeing none, I would ask the, author if you wish to close.

Thank you, and I respectfully ask for an aye vote.

Oh, just wanna confirm that you have agreed to adding a five year sunset to this bill.

Yes.

Yes. Great. Thank you very much. This bill is a vote item. I need a motion.

Motion.

Been moved by Vice Chair Sanchez.

The second from Quirk-Silva.

Second from Quirk-Silva. Madam Secretary, the amendment adds a five year sunset. The motion is do passed as amended to the Assembly Committee on Appropriation. Madam Secretary, please call the roll.

The motion is do passed as amended to appropriations. [Roll Call] That bill is out. 4-0.

That bill is out, and we'll keep the role open for absent members to add on.

So we will keep the role open for the next ten minutes for absent members. Okay. So any staff members that's watching the revenue taxation committee, please, ask your members to please report to Room 126, to have your members come and add on to bills that have been passed by this committee if they wanna be added on. We'll keep the role open for the next nine and a half minutes. Thank you.

[Roll Call]

Great. The rev and tax committee stands at adjourn.