Assembly Standing Committee on Revenue and Taxation

[Background]

No. Should I go through this before we Wanna say good afternoon, and welcome, to the final hearing of the Assembly Committee on Revenue and Taxation. Yeah. I want to remind everyone that the committee has a suspense file, and the details about the procedures is spelled out on the committee rules and posted on our website. In summary, bills of revenue impacting more than a 150,000 will not be eligible for a vote immediately after the presentation.

Instead, we'll be referred to our suspense file accordingly. Only two bills on today's agenda will be eligible for a vote during the regular order of business portion of today's hearing. Those bills are file item number 2AB1768 Bryant, and file item number 6AB2705 Dixon. All other items will be referred to our suspense file.

We will be dispensing with bills on a suspense file today during our second portion of our hearing, including bills that will be that are referred to our suspense file during our regular order our regular order portion of today's hearing.

I see I believe we have a quorum. Madam secretary, would you please call the roll to establish a quorum for today's hearing? Gibson. Here. Gibson here. Sanchez. Here. Sanchez here. Carrillo? Here. Carrillo here. Demile Demile here. McKinner, Quirk Silva, Michelle Rodriguez. We have Michelle Rodriguez here. We have a quorum.

We have a quorum. We will now start with file item number one, AB 1726. We see miss Calderon is with us today. Welcome. And you will you can invite your witnesses.

Wanna remind your witnesses you have two minutes each for your presentation. You may begin when ready.

Thank you, mister chair and members. Assembly bill seventeen twenty six allows California homeowners to establish a catastrophe savings account to help improve natural natural disaster resiliency. The threat of natural disasters increases as our climate continues to change. Unfortunately, wildfire is not the only natural disaster that threatens our state. California is extremely prone to earthquakes and flooding and yes, now tornadoes too.

As catastrophe savings account would empower a homeowner to prepare for these disasters by allowing them to contribute pretax dollars at their local bank or credit union. Furthermore, interest accrued on these accounts would be tax exempt. Qualified expenses from these accounts include home hardening, insurance deductibles, and other recovery costs following a wildfire, flood, or earthquake declared state of emergency. This bill seeks to provide Californians a new tool to protect their homes and accelerate their recovery.

Here with me to sup in support is Claudia Mildner from the California Department of Insurance and Chris Schultz from the California Bankers Association.

Good afternoon, Chair Gibson, members of the committee. My name is Claudia Mildner, Assistant Chief Deputy Legislative Director at The California Department of Insurance under the leadership of Commissioner Ricardo Lara. With me today also is Amanda Jimenez, climate resilience analyst in our climate sustainability branch to answer any technical questions you may have.

As the proud sponsor of AB 1726, insurance commissioner Ricardo Lara thanks Assemblymember Calderon for her leadership in authoring this important measure, which allows individuals to establish state income tax free savings accounts for qualified catastrophe expenses, including insurance deductibles, uncovered losses, and mitigation efforts. California is facing the risk and reality of more frequent and severe natural disasters, including wildfires, floods, and earthquakes.

The financial consequences of these have lasting effects on households and communities statewide. While insurance remains an essential safeguard, rising premiums and deductibles and growing out of pocket costs are making recovery more difficult and less predictable for many Californians. AB 1726 is another tool to help to help California homeowners prepare for and recover from catastrophic events. The catastrophe savings accounts would function similar to health savings accounts and retirement plans using state tax incentives to help homeowners qualified for these expenses.

Department safer from wildfires regulations have been in place since 2022 and require insurance companies to provide discounts for specific wildfire mitigation actions.

AB 1726 complements this by helping homeowners save for those mitigation upgrades so they can reduce risk and strengthen their insurability before an emergency strikes. Catastrophe savings accounts can help cover mitigation upgrades before something happens as well as help with higher deductibles and other out of pocket recovery costs that insurance may not fully cover. This approach is supported by the National Conference of Insurance Legislators and has already been adopted in multiple other states like Mississippi, Alabama, and South Carolina.

In closing, AB 1726 helps encourage personal finance financial resilience, increases likelihood of completion of pre disaster mitigation for wildfires, floods, and earthquakes, and supports faster recovery after a catastrophe. On behalf of insurance commissioner Ricardo Lara, I respectfully ask for your aye vote. Thank you.

Thank you very much. Before you go on, for the audience in the room, we just ask the sergeants to ask everyone outside to be quiet because that noise is bleeding in in this room. So if you leave the room, please don't go outside and add to the noise that's out there. Thank you very much. Next witness.

Mister chair and members, Chris Schultz with the California Bankers Association. We support AB 1726. There are a number of bills in different lanes to help fund pre disaster wildfire mitigation or recovery. Tax credits make sense when they provide a modest but meaningful incentive for taxpayers and homeowners to do something that makes public policy sense. Catastrophe savings accounts, check this box. We encourage your support for the bill.

Thank you very much. Anyone in the audience wishing to add on in support of 1726. Please come to the microphone, your name, your organization, and this is support only.

Good afternoon. Amy Garrett with California Association of Realtors and strong support.

Thank you very much. Primary opposition to 1726. Would you please come forward and take a seat at the table? Primary opposition to this measure.

Is it okay if I just stay up here? It's just

It is. It's okay.

Michelle Warshaw, on behalf of the California Teachers Association, since in respectful opposition, since tax expenditures reduce the overall general fund that then reduces the amount going to schools through Prop 98. Thank you.

Thank you very want very much. Anyone in the room wishing to express opposition to this measure, you can come to the microphone. Have the same right. Hearing and seeing none, bring it back to the dais. Any members wishing to speak on this issue?

Hearing and seeing none. Miss Calderon, you may close if you wish.

Yes. At the appropriate time, I just like to respectfully ask an aye vote. You know, as miss Mildner mentioned, several states have enacted a similar version of this bill already and I noticed earlier this week that there's two states. Georgia has had over a 120 fires burned as of homes burned as of this morning. Florida's facing a similar situation.

So we're not alone in this, and we're just trying to, you know, provide tools for our constituents so they're prepared. Thank you.

Thank you very much. This bill will be referred to our suspense file, and thank you and your witness for showing up to this committee. Thank you very much. Next item, we have file item number two, AB 1768. Mister Bryant is not with us today.

We ask miss McKinnor who's gonna present on behalf of mister Bryant. No. It's okay. So we're gonna get witnesses.

Do we have any?

We do.

Good afternoon, mister chair. It's quite long. You guys know I'm not I don't speak as long as mister Brian, but we're gonna pretend like I'm mister Brian today. Good afternoon, mister chair and colleagues.

On behalf of assembly member Brian, I'm proud to present AB 1768, a bill that gives state authorization to Los Angeles and Contra Costa Counties to ask their own voters whether they wanna step up and defend themselves against the budget cuts the Trump administration contends to use to punish Californians by considering the local transaction and use tax.

Our most vulnerable communities continue to face threats from this corrupt and incompetent administration. This federal gov government has enacted policies that strip health care resources away from communities that already face the greatest barriers of care. The big ugly bill is a clear shift away from investing in public health, food access, and basic stability. Here in California, we're already seeing the impacts. Los Angeles County projects losses totaling $2,400,000,000 over the next three years.

Without an additional local revenue source, these cuts will affect the county departments that focus on providing Angelenos with quality health services. The county has already instituted hiring freezes and has warned of potential layoffs affecting 5,000 staff who keep this system running every single day. Contra Costa County faces similar pressures as federal cuts cascade through Medicaid, SNAP, and other safety net programs administered at the county level. County officials project that Contra Costa Health System will will face a deficit of more than $1,000,000,000 by 2031.

Measure b's projected 750,000,000 over five years will offset a significant portion of that gap.

AB 1768 is about where the local communities have the state authorization to respond with federal decisions slash critical funding for their communities. With this authority, counties are left making difficult choices that almost always fall on the same people. Low income families, seniors, people with disabilities, and communities of color are the first to feel the consequences of reduced services and limited access to care. This bill does not raise taxes.

It simply gives voters the ability to decide whether they want to invest in their own communities and protect critical health infrastructure at the county level.

If approved by voters, funding funding in Los Angeles County would support departments such as health services, public social services, correctional health services, and public health. It would also sustain nonprofit hospitals, in home support services, and school based health programs that serve children and families. In Contra Costa County, revenue would support general county operations, including health care, supplemental food assistance, and other essential services. AB 1768 is grounded in local control.

It ensures our communities are not left to absorb the consequences of federal divestment on their own.

Joining me to testify are Julie Serrano, VP of advocacy at Planned Parenthood Pasadena, and Dennis Cuevas Romero, the VP of government affairs at the California Primary Care Association. Thank you.

Thank you very much. Two minutes each. Whoever wants to go first.

I'll go first. Good afternoon, chair and assembly members. My name is, again, Juliana Serrano. I serve as vice president of advocacy and equity for Planned Parenthood Pasadena San Gabriel Valley, and I'm here to articulate our support of AB 1768. In Los Angeles County, Planned Parenthood Pasadena San Gabriel Valley operates five health centers, and our sibling affiliate, Planned Parenthood Los Angeles, operates 23 health centers with 26 school based sites.

Together, our two affiliates represent one quarter of the Planned Parenthood health organizations in California, offering cancer screenings, STI testing and treatment, contraception, abortion, gender affirming care, and so so so much more to hundreds of thousands of patients each year.

When the president signed HR 1 into law on July 4, Planned Parenthood health centers were immediately defunded nationwide, and overnight, our very own health centers lost the ability to receive reimbursement from medical programs. In dollars for California alone, the defund meant that the state lost over $300,000,000 in federal Medicaid funding for vital sexual and reproductive health care services provided by Planned Parenthood Health Centers. We are incredibly grateful that the legislature and the governor stepped up to appropriate state dollars to help fund our services.

Thank you so much for that support. However, we continue to face financial uncertainty with additional federal cuts and ongoing threats to the care we provide and the patients we serve.

We also recognize that HR 1 includes many other devastating impacts to health care programs across the state that create other challenges for the state budget. As the assembly member McKenner stated, the Los Angeles County projection is a loss of $2,400,000,000 over the next three years.

In response, the Los Angeles County Board of Supervisors proposed a local solution by placing the Essential Services Restoration Act on the June 2026 ballot for voter approval, and if passed, this measure can raise up to $1,000,000,000 annually for health care services in the county, including planned parenthood. AB 1768 will allow this measure to be implemented legally if approved by the voters in June. So for these reasons, I thank you for your time, and I respectfully ask for your aye vote.

Thank you very much. Next witness.

Mister chair, members, Dennis Cuevas Romero with the California Primary Care Association. We represent nearly 2,300 health centers up and down the state, serving nearly 8,000,000 patients. As both the assembly member and my colleague mentioned, the cuts to the health care's safety net is gonna be dramatic. Community health centers are the back backbone of the safety net.

And because of HR 1 and the budget challenges that the state are facing, we really need to make sure that count you know, localities have the ability to provide access, con continue providing access, and the impacts are already being felt.

There's clinic closures, staffing shortages, reduced capacity to meet the dramatic needs, and that's only going to get worse once HR 1 implementation happens starting beginning of next year with redeterminations. And it is just going to be incredibly impactful. As my colleague mentioned, this only allows for the effectuation of the ballot initiative if voters were to pass it in June. So while this bill isn't actually a a tax, it's about financial stability.

It's about empowering local communities to push back on these harmful cuts and to decide whether they wanna continue providing local care to their access to care in their communities.

Without action, we risk a significant loss of revenue that will prevent further strain on the safety net and access to care. So AB, 1768 will continue preserving access, strengthen workforce, and ensure that health centers remain viable in the communities that need them the most. For that for those reasons, ask for your aye vote. Thank you.

Thank you very much to both witnesses. Anyone in the room wishing to speak in op I mean, in support of this measure. Your name, your organization, and this is support only.

Good afternoon. John Scoville with the County of Los Angeles in support.

Thank you. Thank you.

Good afternoon. Rachel Blucher with LA Care insupport. Thank you.

Good afternoon. Martin Vindiola on behalf of the California State Association of Electrical Workers, the California State Pipe Trades Council, and the Western States Council of Sheet Metal Workers in support. Thank you.

Thank you. Good afternoon. Darren Harris with St. John's Community Health and support. Thank you.

Good afternoon. Erica Rogers with the Community Clinic Association of Los Angeles County in strong support.

Thank you.

Good afternoon. Max Perret with Alioto's Health and our 17 member health centers in strong support.

Thank you. Mister chairman, members, Terry Brennan, on behalf of SEIU California, strong support. Thank you.

Hi. Good afternoon. Panarea Abdis with the California Community Foundation in strong support. Thank you.

Thank you.

Good afternoon, Shane Gusman, on behalf of Teamsters California and the California Professional Firefighters in support.

Thank you.

Jeff Neil representing the Contra Costa County Board of Supervisors, also in support.

Thank you.

Ryan Souza , on behalf of APLA Health, in support.

Thank you. Primary opposition to this measure. Would you please come forward, and you can have a seat at the table?

Primary opposition to this measure. Okay. Seeing none, anyone in the room wishing to are you primary opposition? Opposition, but it's me too. Sorry.

Okay. Anyone in the room wishing to speak in opposition to this measure, please come forward your name, your organization, and this is opposition.

Rich Gibbons, California resident. I oppose this.

Thank you.

Kendra Bakley on behalf of the City of Glendale, respectfully in opposition.

Thank you. Seeing no one else, I wanna bring it back to the committee. Mister Demaio.

Thank you. And it's a shame that mister Brian is not here. I don't I have a policy that my job is not to listen and choose between the lobbyists who are paid to come up here. My job is to channel the voiceless. People who don't have the money to hire a lobbyist to come here and look at legislation and give them voice.

And what I will tell you is that the residents in Los Angeles and and Contra Costa County, like every other resident across the state, they are hurting. They are getting crushed. Their cost of living is at a crisis point, and it is outrageously irresponsible for elected officials, bureaucrats, government grantees, and contractors to sit there and say, well, let let's just get more money for them. Tighten the belt. Everyone has to do it in the business world.

Small businesses, working families have to do it, but why not government? Why not all the government funded NGOs whose revenues continue to spike? Los Angeles County continue to hand out pension spikes and salary hikes for years. And to sit here and say, well, because we've been irresponsible, let's find the fall guy. Let's blame it on Trump.

But he's a convenient he's a convenient whipping boy. People don't like Trump in in in in some areas of the state. But the reality is this, you caused these problems. You, local government. And this is not saying, well, the the the voters get to decide.

You're doing this before the voters get to decide. And it's not just for one initiative. Your bill extends this authority till 2031. This is a blank check authority to raise taxes at the local level. And I haven't even gotten into the ballot title, which is horrifically misleading and false. Thank you.

Thank you.

Opposition didn't have a chance to speak today. I believe that I have an opportunity as a as an elected member to give opposition a voice. They're busy working to pay your taxes. You they're too busy working to pay your taxes to fund these bloated programs so they can't hire lobbyists to fly up here.

It is my job to give voice to the voiceless. And today, the opposition voice will at least be heard. And with that, I urge a no vote to this cost spiking tax increase.

Thank you. Thank you so much. Can I ask oh, you wanna there you go?

Anyone else wishing to speak? Mister Carillo.

Thank you, mister chair. I I do have some concerns on how this is gonna be distributed across the county. While I I support the measure, yes, in North America, it'll be up to the voters to decide that. But given history on how LA County distributes this type of funds, I'm speaking about measure h, which passed a few years ago. At the time, I was a council member with the City of Palmdale.

We did a when I was there, we we did an analysis on how much money was collected from the High Desert, still LA County, City Of Palmdale, City Of Lancaster. The money that was collected that went down to the county did not really we didn't get anything close to what was collected from the Antelope Valley.

My my point is that I I I'm gonna urge that there is a oversight committee so that we make sure that the money is distributed across the county, but it doesn't stay only in the urban area of Los Angeles because Palm Bay and Lancaster is LA County. It is. And given again the fact that through measure h, there were millions of dollars.

I don't remember the exact amount, but compared to what the, Hyadeser got back, it was just 15%. My my point I'm trying to make is that, I I I did have this conversation also with LA County Officials and that a, oversight committee be part of this. Because, again, when we talk about equity and the way that the Antelope Valley gets taxed, we barely get anything back. Yes.

Again, I I understand the the concerns, and I I know that it's something that is needed given what's happening at at the federal level.

But I just wanna voice here on the record that a oversight committee be part of this and that every corner of the county, Los Angeles County, is able to get the benefits of with taxpayers. So thank you.

Thank you. Thank you. And I will I will let the author know. Thank you.

Anyone else wishing to speak? Great. As not only the chair, but also someone who lives in Los Angeles County, in reference to mister DeMaio's remarks. This bill also has a sunset, I understand. It's sunset, and, also, the voters can decide whether or not to to to tax.

So it's not an automatic tax. Am I am correct?

Correct.

And the voters will decide whether or not to tax themselves. So it's not something that the county is thrusting upon the voters of the county of Los Angeles automatically. So the voters will have an opportunity to decide whether or not they want the half cent sales tax, and I am correct that it is it's sunset after three years. Can you speak to that?

It sunsets in 2031. 2031. Five years. Five years. But again, it to your point, mister chair, it does allow the voters to make that decision whether they wanna tax themselves or not.

Correct. Okay.

Right. Okay. Just wanna make sure I am correct in terms of those two items in which I read. And, miss McKenna, thank you very much for being here on behalf of mister Bryant because we could not be here because he's sick. Do you wish to close and answer anything that was brought out?

I know you was ready to go, but you have this opportunity

to LA count on behalf of the LA count of someone that represents LA County as well. It's it's lots of folks in LA County that does not have medical coverage, and they'll need these clinics to be open. They'll need these kind of services, and they'll lose their Medi Cal. They'll lose their insurance, and people will die.

And so we have to make sure that we cover our give our our our folks in LA County an opportunity in Contra Costa an opportunity to vote to keep their to to keep services for themselves.

And so with that, I'd like to ask for your aye vote.

Thank you very much. And members, this bill is a vote item, so I will entertain a motion. Can I have a motion on this item? It's been moved by miss Rodriguez. It's been second by miss Clerk Silver.

Madam secretary so this is a due this motion is do passed to the assembly of local government local government. Madam secretary, please call the roll.

{Roll Call} That bill is out.

Hold on.

I did not I'm sorry. I missed the vote.

Carrillo? Aye. Carrillo, aye. That bill is still out. Thank you.

Thank you.

Five to two.

Order.

That bill is out five to two. Thank you very much. So next, file item number file item number 3AB1790. Mister Connolly. And your witnesses may join you as well, and you may proceed when ready.

Thank you, mister chair and members. Good afternoon. I'd like to begin by stating that I will be accepting the committee's amendments. I'm proud to present AB1790, which will end the water's edge tax loophole and return California to a fair system of taxation for multinational corporations. For the last forty years, California has given multinational corporations the opportunity to choose what tax scheme they would like to use to ensure they pay as little in taxes as they possibly can.

They do this through what's known as the water's edge tax election, which allows a corporation to only pay taxes on revenue they decide is earned within the water's edge boundaries of California. This scheme incentivizes shifting as much income as possible offshore through the use of subsidiary companies and foreign tax savings. Out of the roughly 1,000,000 companies that do business in California, only around 2,000 actually use the water's edge tax election. That's 0.2% of businesses.

Even though the number of water's edge filers are small, this scheme cost California taxpayers roughly 3 to $4,000,000,000 annually and is the single largest corporate tax break in the state.

Reuters just reported last week that Tesla reported zero tax liability in The US for 2025. However, somehow a Singapore based subsidiary, Tesla Motors Singapore Holdings, recorded $18,000,000,000 in income routed through a Dutch partnership. That subsidiary reported selling less than 5,000 vehicles. The global corporations who take advantage of this tax scheme would have you believe that water's edge has always been the case and is the only viable way for them to be able to operate. That is simply not true.

Prior to the Reagan administration's creation of water's edge, California operated under a unitary tax structure requiring companies to use worldwide combined reporting to calculate their taxes. 99% of companies still use worldwide combined reporting for their taxes. Only the largest multinational corporations are able to take advantage of water's edge, and California taxpayers are footing the bill. The state is facing a severe multiyear budget deficit that is compounded by the Federal Government's decision to gut social safety net programs like Medi Cal and food assistance.

As legislators, if we do not find a way to generate revenue, we will have to make heartbreaking decisions to cut programs that the most vulnerable Californians rely on.

AB1790 is a simple proposal that offers a solution to this dilemma by generating between 3 to $4,000,000,000 annually as was mentioned. This is 3,000,000,000 that can be put towards schools and health care, $3,000,000,000 for nutrition assistance programs, $3,000,000,000 for local transit and community projects, $3,000,000,000 to be put to work to benefit all of California instead of just the wealthiest corporations.

To be clear, AB1790 will not solve the state's entire budget deficit, but it can make a difference to the people who will suffer most from budget cuts. For example, the governor's budget cuts $1,000,000,000 from Medi Cal Dental beginning on 07/01/2026. About 15,000,000 Californians rely on Medi Cal Dental.

So these cuts would effectively eliminate dental care for seniors, people with disabilities, children, and low income families. If the legislature wants to save this program, we are gonna have to generate an extra $1,000,000,000 or cut it from somewhere else. The January budget also cut a $100,000,000 for programs that support survivors of human trafficking, sexual assault, and domestic violence. Middle class scholarships have been cut in half. The list goes on and on.

AB1790 could reverse many of these cuts and lessen the impact of others. We can do this by making sure the world's most wealthy corporations simply pay their fair share in California. It's time to repeal water's edge and even the playing field for all Californians. Joining me to testify today is Professor Darion Shanksy and Lenny Goldberg from the California Tax Reform Association.

Thank you very much. Welcome, Professor. You have two minutes.

Great. Hi, everyone. It's an honor to be here. I will be brief. You've heard that we talk about this before, and I don't wanna try your patience. So a few things to note.

Every nation that signed the letter opposing AB1790 has found for its own tax purposes that income shifting is a big problem internationally. Every single one of those countries accepts the notion that aggregating large businesses into whether what unitary business form is appropriate, as well as using a formula to figure out where their income was earned.

Every single one of those countries concluded that the compliance burdens were not too great, and most of them are going to use a version of worldwide combined reporting within their own domestic scheme, structures that we can build upon in order to make the compliance burden even less should California return to worldwide combined reporting. The double taxation concern is similarly specious. California apportions income, so only a small portion of these corporations income will end up in California.

Their complaints are that they are using a different inferior system to locate income. And between the two, there might be some small percentage of overtaxation. Not only is the complaint minor, but the complaint is silly to the extent that these large corporations in charge of their own tax destiny are clearly underpaying rather than overpaying across the world. I look forward to your questions. Thank you.

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

Thank you. Lenny Goldberg on behalf of the California Tax Reform Association, and I'm here because I was here forty years ago when, water's edge passed, over opposition that I was part of. Many things have changed since then. At that time, the Japanese economy was the dominant said seemed to be the dominant economy in the world, and many many Japanese and multinational corporations focused on California. The worldwide unitary method was used by California.

It was upheld in the Barclays case by the US Supreme Court. That that method was upheld, but they claimed that they would not and as the so called dominant economy, they would not invest in California because we would be reaching all their worldwide income. Much has changed since then. One is obviously their way very different multinational economy. But another major factor here is that California moved to single sales factor, which is to say that income is a portion to California on the basis of sales.

With that the case, there is no the argument that the the foreign based multinationals made that they would not invest in California because payroll and property were part of their underlying tax basis. Payroll and property are no longer any part of their underlying tax basis. Therefore, that investment argument that was held up for when water's edge passed and which convinced the this legislature to pass that is it has no validity whatsoever anymore.

And finally, much of the, and I think the Tesla example was a good one, but much of the income made by multinational corporations, by Big Pharma, by technology is based on intellectual property. And that intellectual property developed in The US, developed heavily in California, is parked in The Bahamas, in Ireland, in Luxembourg, in tax havens.

So really, all we're talking about here is eliminating the ability of these multinationals to use to manipulate their their assets, to take their intellectual property, and park it abroad even and avoid the allocation or a a portion of of any income to California. So, the forty years ago that this past, I was here.

Many people here weren't born then, but the fact is that everything has changed that led particularly in terms of the seeking of this foreign investment that has led, California to pass this what is now very anachronistic law that should not exist anymore. Certainly, if there's no other argument on it, the fact that we use single sales now has therefore, has nothing to do with their investment.

And, we need to go back to the system that served California well when I was a much younger man.

Thank you very much for your testimony. Anyone in the room wishing to speak in support of 1790, would you please line up your name, your organization, and this is support only, Terry.

I'll try to be that brief. Terry Brennan on behalf of SEIU California and the Labor Coalition representing 2,500,000 taxpaying, hardworking Californias in support. Thank you. Thank you.

Hello. Sam Wilkinson, on behalf of in child poverty in California coalition, equal rights advocates, the California work and family coalition, here and well, yes. The California work and family coalition here in support. Thank you so much.

Thank you.

Rebecca Gonzales with the Western Center on Law and Poverty in strong support.

Thank you.

Jennifer Greppy, Parent Voices California, and thousands of parents across the state in strong support. Thank you.

Thank you.

Next, Pare with Alioto South and our 17 member health centers representing three thou 300,000 patients in strong support.

Thank you. Can we close that door back there, please?

Good afternoon.

I'm sorry. Whoever has that door open, close it, please.

Alright.

Thank you.

He gets a pass.

Sasha Horowitz, Los Angeles Unified School District in support.

Thank you.

Michelle Warshaw, California Teachers Association in support.

Thank you. Loyalty on behalf of Economic Security California Action, proud cosponsor, strong support.

Thank you.

Hi. My name is Crystal Coles. I'm a state worker with Housing and Community Development. I'm also on the board of directors with SEIU Local one thousand urging strong support.

Thank you.

Hello, everyone. My name is Cynthia White, and I'm a SAIU proud member. And I work for the county of Los Angeles Department of Public Health, and I am urged support of AB1790.

Thank you.

Hi. My name is Sarah Noor. I'm from Fossil Free California, and on behalf of 350 Bay Area Action, Climate Reality Project, Culver City Democratic Club, Courage California, the California Environmental Justice Alliance, equal rights advocates, and Climate Hawks vote. We are in support.

Thank you.

Hi. Good afternoon, chair and members. Gabriela Chavez with UDW, AFSCME 3930, a proud cosponsor of the bill.

Thank you.

Hello. Eric Fonstein with Fossil Free California in strong support. Thank you.

Thank you. Good afternoon. Woody Hastings with the Climate Center in strong support. Also registering support for Greenpeace, California Nurses for Environmental Health and Justice, Oil and Gas Action Network, California Green New Deal, Food and Water Watch, and 350 San Diego. Thank you very much.

Thanks, John. Support.

Good afternoon. I'm Ruben Alvaro. I represent Climate Health Now, which represents, health care providers across the state of California in very strong support.

Thank you. Thank you.

Mariah Cornell, Sacramento resident, strong support.

Thank you.

Good afternoon, doctor Galayo Saba, representing Third Act Sacramento, strong support.

Thank you. Good afternoon, chair.

and members. Danny, Cando, Kaiser on behalf of the California Tax Reform Association, which includes AFSCME, California Budget and Policy Center, California Faculty Association, California Federation of Teachers, California Labor Federation, California Nurses Association, California Professional Fire Fighters, California School Employees Association, the California Teachers Association, Community Economics, Incorporated, Professional Engineers of California, SEIU, as well as the state building trades. Thank you.

Thank you.

Art Persico, California Alliance for Retired Americans in support. Thank you.

Good afternoon. Anaeli Martin with the California Immigrant Policy Center in strong support.

Thank you.

Good afternoon, Lily Sterling. I'm with SEIU 1021. I live in Winters, California urging strong support.

Thank you.

Good afternoon. Elizabeth Harrison, regional vice president with SEIU 1021 and proud adult protective services social worker out of Solano County, and I stand in in support.

Thank you.

Good afternoon. Chloe Shea on behalf of California Environmental Voters in strong support. Thank you.

Thank you.

LR Roberts. I'm a retiree from SEIU one thousand, and therefore, I'm a member of California writ Alliance of Retired Americans in strong support.

Thank you.

CT Weber, vice president, California Alliance for Retired Americans in support.

Thank you.

Good afternoon. Christina Scrinch with the Center for Biological Diversity in support.

Thank you.

Good afternoon. Julie Sherman, director of public policy for the Arc of California. We represent people with intellectual and developmental disabilities. We're in support, and we would also love to see some of the revenue from this bill.

Thank you. That's it. That's it. Thank you very much.

Good afternoon, chair members and staff, to praise hand of the black ECE in strong support. Thank you.

Mister chair member, Sarah Flock, California Federation of Labor Unions in support.

Thank you.

Good afternoon, mister chair and members. Janice O'Malley with AFSCME California. We are proud cosponsors. Thank you.

Thank you.

Afternoon, mister chair, members of the committee. Kat Rachman with the California School Employees Association, proud cosponsors. Thank you.

Thank you.

Thank you, mister chair and members. Tristan Brown of CFT, Union of Educators and Classified Professionals here in support. Thank you.

Thank you. Thank you. Good afternoon, chair Marvin Norman, Center for Community Action, Environmental Justice, and strong support. Thank you. Thank you.

Ronald Colton, Sacramento, part of doc with disability with Oregon's in Houston, Sacramento, and part of CURA, strong support. Thank you. Thank you.

Dennis Cuevas Romero with the California Primary Care Association, advocates and strong support. Thank you. You.

Thank you.

Marquis King Mason with NRDC in strong support. Thank you.

Marie Lu, on behalf of the Asia Pacific Environmental Network Action, in strong support. Thank you.

Thank you.

Alex Bloomer on behalf of the Environmental Protection Information Center and Resource for Knowl Institute in strong support. Thank you.

Thank you. Hello. Joaquin Castillejos with the Center for Community Action and Environmental Justice from the Inland Empire here in strong support as well. Thank you. Thank you.

Thank you.

That's it. Primary, witness in opposition to this measure seventeen ninety, would you please come and take a seat? We'll ask this gentleman to move over, and we'll invite the primary opposition to come take a seat. You have two minutes each.

Thank you, chair Gibson and members of the assembly committee. Thank you for the opportunity to underscore the concern that some of California's top trading partners, including the nations of Japan, Canada, Germany, and The United Kingdom have raised about this extraterritorial tax proposal that threatens to make Golden State an international tax outlier.

My name is Kelsey Johnson, and I am vice president of state affairs for the Global Business Alliance, a business association representing more than 200 companies that have made a deliberate decision to invest and create jobs in The United States. These are American companies with a global heritage and a vital part of California's economy. More than 2,800 international companies have invested in California, and these firms directly employ more than 885,000 Californians.

AB 1790 is an assault on long standing international tax norms built on the basic principles of equitable fairness that prevent double taxation across jurisdictions. In fact, every state that has studied this approach has ultimately rejected it. From a fiscal standpoint, AB 1790 also exposes California's tax system to major instability and potential revenue loss. Those losses will be coupled with exponentially more complicated agency audit and compliance challenges. In fact, the state's own legislative analyst office concluded information about worldwide profits of many companies is limited.

Year to year instability presents additional challenges. In addition, record keeping and tax preparation for worldwide taxation is more complex. Many corporations will need to implement extensive new bookkeeping and tax administration activities. Foreign trade partners may take actions against California, shifting to worldwide taxation may raise concerns about double taxation. Companies would be taxed on the same income both in their home country and in California.

In the past, this type of policy led to international disputes with states. That is why there is a letter cosigned by eight of the of America's trading partners urging you not to pass this bill. America has long held tax treaties with many of our strongest international trading partners. This legislation violates the spirit of those agreements and provokes our friends and allies to retaliate.

The diplomatic coalition letter alludes to this concern by saying, we would respectfully urge the committee to consider the implications for California's international economic relationships and for the coherence of US tax policy more broadly. This isn't theoretical. In fact, when California previously attempted to impose a similar extraterritorial tax, other nations enacted laws to retaliate. That could happen again, not only raising cost for Californians, but increasing the cost of California's own products globally.

If you can finish your thought.

Yeah. Thank you. Please don't risk foreign direct investment and the jobs that it creates by continuing to consider AB 1790. Oppose this out of date, out of touch, double taxation. Thank you for your time, and I will stand for questions.

Thank you very much. Next witness, two minutes.

Thank you, chair and members of the committee. My name is Dan Kostenbauder. I represent the Silicon Valley Leadership Group. It's critical to understand why California passed water's edge in the first place forty years ago. The same circumstances that led to its passage are very likely to recur.

In the sixties and seventies, the franchise tax board began auditing on a mandatory unitary combined worldwide basis for their corporate income taxes. This departed from international norms, which was adopted by the US government, other governments on a separate accounting basis. Two main events precipitated passage of the, Water's Edge bill in 1986. The first was the UK government in 1985 passed legislation that would allow retaliation against US companies.

And the second thing was that the Reagan administration, which had been very low key in terms of opposing California's mandatory combined reporting in response to The UK retaliation, decided to, again, oppose California's mandatory combined reporting and also to be willing to support federal legislation that had been introduced in the United States Senate that would have limited California's ability.

So by passing water's edge legislation in 1986, California avoided retaliation against US companies, also avoided the prospect of federal legislation that would have cerebially restricted California's ability to, manage its own taxes. Foreign governments are clearly paying attention now. We know that. And there's every reason to think that if California were to repeal water's edge legislation, we would see the same impetus by foreign governments to retaliate against US companies. And there's certainly a great possibility that the US Congress would get involved and would consider legislation.

And I might just close by saying that a a rationale the FTB used in the nineteen sixties and seventies concerned profit shifting, which has been discussed here today. That rationale is far less compelling today. The OECD's base erosion and profit shifting project, which started in 2012, has led to pillar one, but pillar two is a worldwide minimum tax. And the US government recently, during the Biden administration, has the corporate alternative minimum tax, which is a 15% minimum tax based on financial statement income.

So that those are, I think, compelling reasons not to repeal the water's edge here in California. So we urge a no vote. Thank you.

Thank you very much. Anyone in the room wishing to speak in opposition to seventeen nineties, please line up your name, your organization, and this is in opposition to 1790.

Chris Schultz with the California Bankers Association in opposition.

Thank you.

Mister chair, Chris McKeley on behalf of the Los Angeles Area Chamber of Commerce in respectful opposition. Thank you.

Thank you.

Peter Blocker with the California Taxpayers Association in opposition.

Thank you.

Mister chair members, Steve Carlson for CTIA. We're the trade association for the wireless industry, and we're opposed.

Thank you.

Keijiro Hora, Japanese on behalf of Japan Chamber of Commerce Northern California and also the Japanese Business Association of Southern California. We we strongly oppose this.

Thank you.

Hi. My name is Nori Sakai. I'm a CPA and run a firm specializing in international companies operating in The United States. The firm is named Majordomo Komon. The forcing foreign company with no US tax fighting obligations to comply with these tax standard is very unworkable.

I strongly oppose AB 1790. Thank you.

Excuse me, sir.

Thank you.

My name is Takahiro Takahashi. I'm work for the company called DMG Mori. I strongly disagree this bill.

Thank you.

Thank you, mister chair and members. Keshav Kumar with Lighthouse Public Affairs on behalf of the consulate general of Japan in San Francisco in respectful opposition.

Thank you. Mister chair and members, Paul Deiro representing the Western States Petroleum Association in opposition. Thank you.

Good afternoon, chair members. Yolanda Benson representing the California associate California Hispanic Chambers of Commerce in strong opposition.

Thank you.

Good afternoon, chair members. Jose Torres with TechNet in opposition.

Thank you.

Alexis Rodriguez of the California Chamber of Commerce in opposition. Thank you.

Thank you.

Good afternoon, chair members. Sarah Bridges on behalf of the California Manufacturers and Technology Association in opposition.

Thank you.

Good afternoon, mister chairman. Horatio Gonzales on behalf of California's Business Roundtable in opposition.

Thank you.

Good afternoon. Aracely Campa-Ramirez on behalf of California Life Sciences. You're in opposition.

Thank you.

Good afternoon, mister chair and members. Skyler Wonnacott on behalf of the California Business Properties Association as well as the Building Owners and Managers Association of California and NAOP California in opposition.

Thank you.

Good afternoon. Jacob Brint with the California Retailers Association in respectful opposition.

Thank you.

Good afternoon, mister chair Jack Yanos. We at the California Fuels Convenience Alliance respectfully oppose.

Thank you.

Good afternoon. Nick Chiappe on behalf of the California Trucking Association in respectful opposition. Thank you.

Thank you.

Good afternoon. Moira Topp on behalf of the Orange County Business Council in opposition.

Thank you.

Good afternoon. Gilbert Lara here with Biocom in opposition.

Thank you.

Mara Suibaro with Family Business Association of California.

Thank you. And this is just an atrociously bad proposal. We already have the highest tax burden of any state in the country. And instead of tightening the belt, implementing cost efficiencies, There's a whole lobby, a whole interest special interest group always looking to get more money from people as though it's a free launch that someone else is gonna pay. I actually am open to hearing about changing corporate tax rules and regulations to make sure people pay their fair share.

Thank you. I'm gonna bring it back to the committee for any comments. Mister DeMaio then miss Quirk Silva.

100% involved in that and very eager to hear. In fact, it's not just for corporations. I wanna make sure everyone is treated equally and pays their fair share. There were a number of lobbyists that showed up today on behalf of government unions, And there were private sector representatives, lobbyists in behalf of the check California Chamber of Commerce. What's interesting about those representatives?

California Chamber and all those private groups, they pay something called a proxy tax for those expenditures even though they're nonprofits. The government unions? No. They have a sweetheart exemption. So all of you who lined up today talking about fairness and, you know, equal treatment, you're gonna sign on to my proxy bill next year?

Proxy tax? Oh, no. No. No takers. Didn't think so.

Everyone always wants to raise the taxes of someone else without any consideration to the job losses, and I think the data that was just presented is only scratching the surface of the evidence of monumental job losses in the state of California. We already have an unemployment rate 25% higher than the national average here in California. What it tells me is California legislators and our governor are really bad when it comes to protecting jobs.

Policies like this would make that negligence look like a walk in the park.

This is going to ignite a war with other countries. We just last last week, the majority party passed a a a a tariff bill. A tariff bill.

Do you have a question, mister Demaio? Okay.

I'll get to it. A tariff bill. We said we can't be in a tariff war. At least this administration is trying to use higher tariffs to lower tariffs and get fair trade. This policy, there is no discussion with our trading partners as to, hey.

Maybe you can lower taxes for our companies. No. It's just California. So my fear is if we do this, it lights the fuse on something that we are not gonna be able to control. And I fear that not only will this hurt California, but it very well may not be just targeted at California.

Isn't it true that if California state changes these tax rules, that these other company countries could very well punish all of the businesses no matter where they're located, no matter which other states have different policies. Could that would that not be the more likely way that they retaliate against

Opposition? You wanna speak to that?

Yeah. I can I can maybe speak to that? I I can't I can't speak to what countries may or may not do, but I I believe that their retaliation would probably be directed solely to California and California's products. I don't know if that would spread.

I also don't know if California adopted something like this. Other states may follow, and those states would also face retaliation.

Okay. So if if they go after The United States as a whole, then all eyes are on us. And if they go after California, then we disproportionately bear even more job losses as a result. So I I I guess people when they say we're gonna go after multinational corporations, it it's a good political talking point. But why don't we say we're gonna go after anyone who gets favorable tax treatment that's not applied fairly and equally across the board.

Let's clean up those loopholes first. And, again, all the people who showed up, I'm just pointing out the hypocrisy. All those people, almost three quarters of them, all benefit from an exemption on the proxy tax. And so let's let's let's close that loophole first, and then maybe next year we can talk about this one.

Okay. Miss Quirk Silva.

Yeah. I have some questions for the author, and then I'll have some comments after that. But if you could respond to what was mentioned by the opposition regarding double taxation, regarding instability and audits, regarding complex record keeping, and about retaliation.

Yeah. And I think and I'm gonna turn to my expert witnesses. I I'd also like them to address this job loss notion, which conspicuously has not really been an argument before today, but why don't you take each each point in turn? Sure.

I'll try to take as I'll try to take as many as possible. And if I leave one out, please remind me because they're all easily answered. So when there was informational hearing about Waters Edge election, two representatives of industry came and they said clearly there would be no job losses. And that is because, as mister Goldberg has explained, we apportion based on sales factors. So these foreign corporations would need to not make profitable sales here in order to reduce their taxes, and that's not gonna happen.

Furthermore, on the compliance issue, there's been a lot of talk about, well, now there's a global minimum tax. Two things about that. First of all, global minimum tax would be 15%, which means that if you're a big multinational corporation facing a sticker price over 20% at the federal level plus say California's rate, you have plenty of incentive to still shift income. Not to mention many of these structures are already in place and unraveling them is gonna be hard. So they're gonna continue shifting income just because.

On top of which, pillar two is a global minimum tax. To figure out how much a company pays across the globe, they need to combine different income tax systems using financial statements. In other words, they need to use a form of worldwide combined reporting in order to apply the global minimum tax. So to the extent that dozens of countries have already implemented the global minimum tax, they have already implemented a form of worldwide combined reporting. That means two things.

First of all, the notion that this is really, really difficult is dubious. And second of all, all California has to do is piggyback on what is being done internationally. And so the compliance burden should not be very significant. In terms of volatility, as a policy matter the solution to volatility is not to abandon progressive taxation, it is to be prudent about how you spend your budget and have reserve funds. And so that is the right answer to that question.

To the extent that there are going to be winners and losers from moving to worldwide combined reporting, that is true. And that is why it's a principle to change. Right? It is a better way of assessing how a business is doing. And some of them will pay less and some of them will pay more.

On balance, they'll be paying more? How do I know that? I I because of the FTV reports and the sheer volume of people testifying against this reform. As for double taxation, again, remember, California will only ever tax the portion of sales into California. It'll be a very very small percentage.

That is the way the system works. So for double taxation, the question is, well, The UK does something differently. They're gonna might get a slightly different percentage than California gets. Won't that be annoying? Possibly.

But remember, these sophisticated corporations have all the information, all the incentives, all the planning, and all available evidence suggests they pay less than tax on a full 100% of their income, not tax on more than a 100% of their income. There's been some discussion of the corporate alternative minimum tax added by the Biden administration. I would point out that the Trump Treasury Department has been working hard to tear the heart out of that tax through its regulatory power. So I wouldn't rely on that either.

Thank you. Appreciate that. I want you to see that I've taken a lot of notes, and I use cursive writing since that was my my legislation. Yeah. I I I mix it up.

But I'm taking a lot of notes here, not only from what our author has said, but what opposition and support have said, and, of course, my colleague who has spoken. And this is one of those times when you're a member where you can have really conflicting feelings. And the feelings are, do we move forward with something that we know in the time as my colleague said, the cost of living in California is at a crisis point. We gotta channel our voices and tighten our belts and that we should all share in the pain.

So when I think about this, and I've heard from both sides whether it's a formal argument through a letter of opposition or a letter of support, there's many on both sides to weigh in. And so why it is difficult and why it is hard for members like me to make a decision is because I don't necessarily live in a black and white world.

I live in a world that is gray where when I hear, maybe it is a business. Like, I saw the Chamber of Commerce, the Hispanic Chamber, who is against. The what that they say means a lot to me. On the other hand, when I think about the little guy the little guy that we might say who's on mainstream instead of Wall Street or instead of corporations, and I'm heading into my last full months as a legislator being up here for many years.

I think myself and Assemblymember Elster Murasushi are the longest serving members here since 2012 with the two year break.

I've seen a lot, and part of me has to trust what I believe. And what I believe is, are we really gonna do better by the little guy when we keep pushing it down the road? So as my colleague said, well, let's do making sure we do this proxy tax and make sure nonprofits aren't exempted. And then maybe we'll do this other stuff later. But when?

When do we say the big things are important like health care, housing, human services? And when it is is it the right time? For me, even a year ago, possibly, I wouldn't have support this. But we're on a time when the Federal Government is attacking us, taking millions out of California. We haven't even seen our funds for disaster relief.

Let alone the funds that are being taken away for education. So many issues that are being attacked. And so the little guy, yes, Republicans and Democrats use the same words, affordability in California. We're all gonna tackle eggs. That was two years ago.

We're all gonna talk, you know, tackle things like housing costs. I'll leave, and in ten years, we're still gonna be talking about that. So when is it the right time for the little guy, for the people who are working two jobs? When is it the right time for that single mom who's trying to get childcare to work. To work.

And I'm not against corporations because I know they bring in the tax base that we need. But there's gotta be a point where we all share in this. Tariffs have mentioned. Tariffs are something that the little guys are paying for. We're paying for that when we go to the market.

Any way you wanna put it, we don't need data charts, but we are paying for these tariffs and all to make other countries pay their fair share. So this is saying pay your fair share. Now I am going to to the authors maybe being grouchy with me, I will move this out of committee today, and I'll reserve my right to get more information to see where it heads. But actions speak louder than words.

When do we stand up for the little guy who is who is doing the work that makes California one of the largest economies in the world?

The labor, the laborers, the people working in the Central Valley, the hotel workers, the restaurant workers, the housekeepers, the childcare workers. And so if I can do a small step today, I'm not promising a vote if it gets to the floor, but I will.

Thank you very much. Anyone else? Miss McKenna?

Yes. I'll be supporting AB 1790 today because I know it's not a tax crease. It's closing. It's not a tax increase. It's closing a loophole that allows multinational corporations to avoid paying taxes on profits tied to California's economy, and we are California first.

In the 61st Assembly District, Inglewood, Gardena, Hawthorne, we don't have the luxury of offshore subsidies. Our small businesses pay what they owe today, period. Our small California grown small business, they don't get to they don't get to send money offshore and not pay taxes. So the question before us is simple. Do we continue to subsidize corporations that shift profits overseas, or do we stand up for businesses and taxpayers who are already carrying the load?

Because when we leave this loophole open, we are effectively asking working families and local small ma and pa businesses that we all talk about all the time to make up the differences through higher cost, fewer services, or both. And those concerns and for those concerns about competitiveness, let's be clear. A fair tax system is a a stable tax system, and stability is what businesses actually need to grow in the state. AB 1790 creates consistency in a level playing field.

So I have a couple of questions.

Should corp should corporations get to choose the tax systems that result in the lowest payment or should we have one consistent standard for everyone? And I'll ask the opposition that. Should we should should these corp these eight companies get to choose their own tax system that results in a low lower payment, or should California have one consistent standard for everyone?

The purpose of this bill is to establish a consistent standard.

Okay.

So let's get back to the point that we have our system today with Water's Edge because of the actual or the threatened retaliation by other countries. And the the the challenges, for example, if if you're a a foreign based company that's operating in The US, your US company has got dollar books, has English language documents. If you're in Japan, that company, they have all the rest of the worldwide books in different currencies, not dollars.

They have all the rest of their documents in different languages, not English. Yet if California, FTB wants to do the audit, the FTB is gonna demand that all the financial statements gets trend gets worldwide now.

All the other countries, all that activity has to get translated into US dollars even if it's not being done by that Japanese based company. It's a it's a tremendous burden. It's which is why the the businesses based in those companies have been so aggressive in getting their company their countries to challenge the US government. So, you know, it's it's you have a choice.

You have a a a if you want a a worldwide mandatory combined unitary reporting for everybody in California, you don't get that choice perhaps alone.

You get that choice with The US based companies also having retaliation by foreign governments. So you will not have a consistent system. You'll have one where the foreign companies doing business here will be on worldwide mandatory combined reporting. US companies will be using it, but they'll also be retaliated by foreign governments.

And I So foreign governments wouldn't be

I I think I'll just add too to that point that we asked our membership if any of them file on a worldwide basis in the 10 states that do allow it, and all of them said no. And it's it's not it's it's very complicated to try and get all of that information. Sometimes they may not even know about some of the other international companies that may exist in any of the countries.

But I think if you maintain water's edge, that is a consistent US based tax policy. No federal taxation requires this kind of reporting, and no state in the country requires this kind of reporting with the exception of Alaska for only one specific sector.

Do you guys wanna you answer. Do you wanna

Oh, well, I mean, I think clearly, this is not a tax increase bill. It applies the same standard to everyone. And again, the compliance burden is not great. One another way to look about at it is I don't know what what happened at the ESA, the UK consulate in signing this letter. I suspect they didn't have extensive talks about The UK implementing pillar two, a diverted profits tax, digital service tax.

Nor do they point out that today their king is gonna be browbeaten by President Trump about that digital service tax and how inappropriate that is. So I don't think that this is something that is that is a significant compliance burden, nor nor would there be in the current world, significant retaliation.

And I'm happy to further comment in my close. I'm gonna touch on several things.

Thank you. Last question. In communities like the 60 my district, the 61st Assembly District, our businesses, again, don't have offshore subsidies. What specific benefits do they receive from keeping these loopholes open?

Maybe I can speak to that. What I what I will say is that those specific businesses, if they're selling internationally at all, may receive some sort of retaliation if this legislation is passed. I think that the difficulty that you're expressing right now is that orange is grown in California, wine in Napa Valley may all be taxed internationally. So it it discredits California businesses that are trying to grow or to sell internationally.

So I think that it's a really it's a really complex issue, and I really think it's not the direction that California or or frankly The United States really want right now in this continued different time.

One moment. Excuse me. One moment. I'm sorry. The chair is still here.

Okay.

So did you have another question?

No. I I wanna hear from them.

Okay.

If I may, it will put the smaller businesses in California on a competitive footing with those because they're all pay they're paying their taxes. They're they don't they're not able to avoid those taxes. They can't park their profits offshore, and they will be on a much more competitive basis with those large multinationals that are not paying their fair share of taxes. The California companies are paying those.

The second thing I would say, and this goes back to the nineteen eighties, is that a lot of this retaliation notion is just pure threats.

The US senate was not gonna pass a bill that was overturned California. The US Congress is not likely to do so now. The threat their the threats of retaliation are nothing but threats. They are nonexistent otherwise. And your your main point, which is who gets these choices, Only these multinationals get the choices.

All these California businesses, they're paying their California taxes.

Thank you. Thank you.

Are you complete, miss McKenna? Thank you very much. Any other questions from any of the members? Great. So I had a few questions that have already been answered.

My my questions have already answered through the dialogue back and forth, so I don't have any questions. Mister Connolly, you may close if you wish.

Thank you so much, chair, and really appreciate the informed discussion today. I know this is an issue that's of interest to many people. And just wanted to obviously know that we have a budget deficit right now. We are going to be facing a number of hard choices. We know that that's part of our job.

They're gonna be going to be painful cuts, reallocations. But in this case, we feel this is a sensible opportunity to close a loophole and thereby raise revenue to support some programs. So I wanna just quickly go through some of the arguments we heard today. We heard about this is gonna be really hard regarding compliance. Let's remember that worldwide combined reporting is the primary way of accounting worldwide.

I find it hard to believe that and again, we're talking about the largest, most sophisticated corporations in the world are all of a sudden gonna have trouble complying in California. The double taxation argument is a nonissue. This is actually an allocation of California proportional sales. It is not taxing income twice. That's a characterization that has been debunked.

Loss of jobs, I was waiting for that to come up because it's an argument on everything these days, and we're very cognizant of the fact that we wanna keep jobs in California and business in California. That is not an argument here. Many of these companies, if not most, actually aren't located in California. Yet, they have sales in California and hence revenues, and that's really what we're looking at.

So what this really comes down to, and I have to admit it has been pretty intellectually interesting, is a notion of international relations.

And again, to put this in perspective, we are talking about 3 to $4,000,000,000 a year combined in additional taxes that we would be asking companies worth hundreds of billions of dollars to be paying toward California.

The notion that somehow in a in an era where there is a massive worldwide trade war going on or certainly the possibility of one, when there's an actual war in Iran that these companies are gonna base their decision on us closing this corporate tax loophole on whether to do business, I e sales in California, or retaliate against California. It stretches credulity, but at least at the end of the day, we know that is their argument, and we have been talking to consulates.

We're open to other ideas as to how we can smooth over international relations if we are inclined to move forward with this. I think there is a pathway forward.

But I think this is an important conversation to continue. And on that basis, I would respectfully ask for an aye vote to get it out of committee today. Thank you.

Move the bill.

Okay. Let's Yeah. Thank you. This bill will refer to our suspense file. Thank you very much to your witnesses, and thank you to the author for coming.

And this bill will be taken up later on today in our committee hearings. So thank you all for appearing. Next up, follow-up number four, AB 2022. Gonzales, You can please you and your if people exiting, if you could please exit it quietly. Thank you very much.

Mister Gonzales, you can please approach along with your witnesses, and you may proceed when ready. If I can ask everyone to please take your conversation outside. Thank you. Any witnesses? Oh, great. You may proceed when ready.

Good afternoon, chair and members, esteemed colleagues. I'm honored to present AB 2022. As we all know, California has one of the highest cost of living in the country with cost continuing to rise. Property taxes can become an overwhelming burden, especially for our most vulnerable community. In particular, California is home to more than 1,200,000 veterans.

I am the only veteran in the state assembly, so in that 1.2 in there. Approximately 380,000 veterans live with service connected disabilities, conditions that were caused or made worse by their time in uniform fighting for our nation. And nearly 25% of homeless veterans are located in California, the highest percentage of any state. These are men and women who answered the call to serve, often at great personal cost.

Many returned home with injuries that fundamentally changed their lives, their ability to work, and their financial stability. For disabled veterans, many of whom are living on fixed incomes or unable to maintain full time employment due to their disabilities, these pressures are even more severe. It can be the difference between staying in their home or being forced. And for a veteran who has already sacrificed so much, losing their home is not just a financial hardship. It's a failure of our commitment to our veterans.

AB 2022 seeks to address this failure. I come before you not only as a legislator, but as a 100% disabled combat veteran who served twenty one years in the United States Marine Corps. This bill is not abstract to me. It reflects the lived reality of many veterans I've served alongside and continue to represent. This bill provides a full property tax exemption for the primary residents of veterans who are 100% disabled as a result of their service.

It also extends that same protection to unmarried surviving spouses, ensuring that families are not displaced after the loss of a loved one. This measure is also time limited and includes reporting requirements so that we can evaluate its effectiveness and ensure accountability. At its core, AB 2022 is about stability. It addresses homelessness among our most vulnerable veterans. It ensures that when a veteran can no longer work in the same way they once did, they are not left behind.

We ask a great deal of those who serve. We ask them to put everything on the line, sometimes their health, sometimes their future earning capacity, and risk their lives. In return, we make a promise. You and I, we make a promise. A promise that when they come home, especially when they come home injured, we will stand by them.

Standing by our veterans means making sure they can afford to stay in their homes. Standing by our veterans, providing stability in the face of rising costs, and it means honoring sacrifice, their sacrifice with meaningful action. The cost to the states does not compare to the sacrifice of our veterans. AB 22 is a step toward fulfilling that promise. Members, this is about doing right by those who have already given so much.

I respectfully ask for your aye vote at the appropriate time. With me is Yolanda Benson. Yolanda.

Good afternoon. You have two minutes.

Thank you so much. Yolanda Benson representing the California Association of County Veterans Service Officers. I was going to say what AB 2022 does, but he so eloquently already told you and then provides the full property tax exemption for the primary resident of a 100% disabled veteran. Wanna thank the author for that. He is a veteran, and he is certainly passionate for issues that are impacting veterans, and we appreciate this bill.

California remains an outlier in its approach towards meaningful tax incentives, which would keep veterans in California. It would boost the state's workforce and ultimately increase total state revenues. California is losing military retirees and other veterans to other states such as Texas, Georgia, and Florida. Since 2000, California's population of military retiree has fallen by 27.4%, while The US military retiree population has increased by 17%.

For those in the workforce, US labor of statistics show a 53% decrease in veterans in the California workforce over the last twenty years.

We can't accept that. In 2025, governor Newsom included a partial tax exemption in his budget for military retiree pay. This is a great first step. California is competing with other states for the veteran population through tax incentives. Not all veterans are broken.

Most are succeeding and thriving even with scars they bear from their service. A perfect example is sitting next to me in Assemblyman Jeff Gonzales. They provide not only knowledge, great assets to to California, but they also pay taxes. Veterans are making decisions where to live and our active duty service members currently serving in the military will now become veterans as they come home. We need to tell them California is prioritizing veterans.

Please vote aye on 2022 at the appropriate time.

Thank you very much. Anyone in the room wishing to speak in support of AB 2022? I need your name, your organization, and this is support.

Thank you very much. Anyone in the room wishing to speak in support of AB 2022? I need your name, your organization, and this is support.

Say that one more time, please. Just for the record because we couldn't hear you.

The microphone wasn't on.

Thank you. Amy Garrett with California Association of Realtors in support of the bill.

Thank you.

Good afternoon. Nick Bussey, father, combat veteran, and founder of a social group for veteran voices called Veterans of California because they do need a voice, and most importantly, they are not a paid lobbyist. Okay. Just a voice.

We support this bill to its fullest while people have their fingers crossed behind their backs to

Just support. Thank you very much for your service. Name and organization to support.

Rich Gibbons, Iraq and Afghanistan army veteran myself, 100% disabled. I am in full support of this, and I ask for your aye vote for this too.

And thank you for your service.

Gary Travis, combat Marine Corps veteran and owner of Guardian Grounds Homes. We provide supportive housing for veterans because they can't afford theirs. Thank you.

Thank you for your support.

Good evening. My name is Todd Hernandez, disabled in Afghanistan veteran, lifetime member of the VFW, small business owner, and a member of the veteran Latino community. I'm advocating for veterans in Southern California. I'm in strong support of this bill.

Thank you for your service. Seeing no one else, Primary opposition to this measure twenty twenty two. Would you please come forward? Seeing no primary opposition. Anyone in the room wishing to go on record in opposition to this measure?

You have the same right. Seeing none, bring it back to the committee. Any committee member wishing to speak or say anything? Seeing and hearing none. To the author, you wish to close.

Thank you, Mr. Chair and members. This is our opportunity, our opportunity to take care of our veterans. We say we love them. We say we want to take care

of them. This is where we can do that. When appropriate, ask for an aye vote.

Thank you very much. And thank you very much for your service to this country. This, bill will refer to our suspense, file, and thank you, your witness, for, for coming testify. Thank you very much. Thank you.

File item number 5AB2069. Miss Krell, you and your witness may have a seat and you may proceed when ready.

Hi. Good afternoon, mister chair and members. Thanks for having me today. I bring to you today Assembly Bill 2069. This is the FAIR Act.

AB 2069 will help spur economic growth and job creation by catalyzing development projects at fairgrounds throughout the state through a targeted state sales and use tax exemption. California's fairgrounds are valuable public assets. They serve as hubs for community events, fairs, and agriculture, and they play a critical role as emergency response and disaster recovery centers. These properties span thousands of acres of publicly owned land and already have key infrastructure in place, like utilities, transportation access, and event facilities.

But despite their importance, many fairgrounds are struggling.

Across the state, fairgrounds face significant deferred maintenance and aging infrastructure. At the same time, funding has been limited and inconsistent, making it difficult to invest in large scale improvements to modernize these facilities. These sites represent a major untapped opportunity. They're often well located, like the one here in Sacramento at Cal Expo, and mixed use development that could really benefit the surrounding communities. However, under current law, there's no targeted mechanism to support private investment on the fairgrounds.

The high cost of construction, labor, utilities, and taxes in California often make potential projects financially unfeasible. And as a result, projects that could create jobs, improve infrastructure, and generate long term economic growth, simply don't move forward. So AB 2069 addresses this crucial gap. The bill is narrowly tailored to create a sales and use tax exemption that would incentivize new development projects on fairgrounds. This would begin 01/01/2027 for qualifying projects that are approved by a fairground governing body.

They would receive a tax exemption on tangible personal property used in development and operations, including construction materials and equipment. This bill applies only to new development, or new phases of existing projects, ensuring we are generating new economic activity. Goods and services sold through qualifying projects would not be subsidized by this bill. It maintains local control by requiring approval from local fairground, governing boards. It's limited in scope to just five years, and importantly, explicitly protects local sales taxes and dedicated local revenue streams.

By lowering upfront costs, AB 2069 helps make projects viable that otherwise would not pencil out. In so doing, it unlocks private investments, supports job creation, and generates sustainable long term revenue for fairgrounds. This is about revitalizing critical community assets while driving economic growth in a smart and targeted way. With me to testify today is Louie Brown on behalf of the Western Fairs Association and Connie Chan on behalf of, the California treasurer's office.

Thank you both for being here.

Thank you very much. You have two minutes.

Thank you. Good afternoon, chair and members of the committee. My name is Connie Chan, and I'm the legislative manager for state treasurer Fiona Ma. Fiona Ma is the cosponsor of AB 2069 and a longtime champion of fairgrounds, which support local communities, post regional events, and serve as critical emergency response and disaster recovery centers. Treasurer Ma has prioritized strategies to better leverage state owned assets and attract private investment into the projects that serve the public purpose.

Fairgrounds present a clear opportunity to do that just that. They are strategically located, often have existing infrastructure, and with the right tools can function as year round economic engines. This bill takes a disciplined approach to economic development. It is narrowly targeted, does not require new state spending, and addresses a new key barrier in project finance, high upfront costs that can prevent otherwise viable projects from moving forward.

By helping offset these upfront costs, AB 2069 can move projects from concept to reality, supporting job creation, increasing ongoing state and local tax revenues, and generating long term revenue streams for fairgrounds.

The bill is intentionally structured to apply only to new development activity and to encourage projects that are unlikely to move forward under current conditions. It's it preserves local funding allocations that are critical to communities and fairgrounds while avoiding impacts to existing revenue streams. At the same time, it helps address the real financial challenges facing many fairgrounds by creating a pathway to long term self sustaining revenue. Ultimately, this is about leveraging private capital to strengthen public assets and deliver lasting economic value without additional state funding.

For these reasons, the treasurer is proud to cosponsor this bill and respectfully ask for your aye vote.

Mister chairman, members of the committee, Louis Brown here today on behalf of the Western Fairs Association and the California Fairs Alliance in support of AB 2069. It's been well stated. This is a vehicle for public private partnerships. 54 of the district ag associations that we have in the state are state property. It's not easy to develop on state property.

Thank you very much. Next witness, please.

And so what this is a tool and an incentive for people that we want to partner with that will come in and help improve the fairgrounds, create greater opportunities for revenue, and then assist fairgrounds in dealing with some of the deferred maintenance that they have. We're excited about this opportunity. We think that local boards around the state will use this to create additional private and public partnerships, and we ask for your support. Thank you.

Thank you very much. Anyone in the room wishing to speak in support of this measure? 2069, you please line up name or seeing no one. Okay. Primary opposition to this measure, please come forward.

Seeing and hearing none. Anyone in the room wishing to speak in opposition? Hearing and seeing now, bring it back to the committee. Anyone wishing to speak? You may close.

I respectfully ask for your aye vote.

Thank you very much. This item will be referred to our suspense file and thank the witnesses for appearing today. Thank you. We still have a lot of work before us, so we're gonna be trying to move through all the items before us. Miss Sanchez will be speaking and presenting file item number six, AB27 Dixon.

Miss Sanchez has will be pitch hitting for miss Dixon in her absence, and thank the vice chair for doing so on behalf of miss Dixon. And her witnesses are approaching, and you may proceed when ready.

Good afternoon, chair and members. I am presenting AB 2705 today on behalf of assemblywoman Diane Dixon. AB 2705 seeks to establish a uniform framework in the excess proceeds claim process to ensure consumers are adequately protected from bad actors. Excess proceeds are in the remaining funds generated from a foreclosure or tax defaulted property sale after all delinquent taxes, liens, and cost of the sale are satisfied.

Under current law, individuals can claim their excess proceeds for free through the county tax collector's office with no need for a third party to assist.

However, individuals can also work with third parties commonly knows known as asset finders who can assist in the filing and claiming of excess proceeds. Unfortunately, lack of uniform guidelines for agreements and disclosures had led has led to the proliferation of bad actors who charge high fees, oftentimes requiring 30-40% of the total settlement for a process that the county could perform free of charge.

AB 2705 protects taxpayers and consumers by establishing a uniform approach for contracts to locate, recover, deliver, or assist in filing excess proceeds claims.

Specifically, this bill requires a written agreement between the third party and the party of interest, prohibits fees or compensation before approval and payment of the claim, limits fees to no more than 10% of the excess proceeds awarded, which is in line with the current California law on unclaimed property, and require that agreements clearly advise the party of interest that they may file directly with the county at no cost. These protections will ensure individuals are not taken advantage of when they are claiming their excess proceeds.

This bill is about protecting taxpayers from predatory business practices while claiming their rights to excess proceeds. Miss Dixon's office has met with the California Association of Realtors and is already working on amendments to ensure we do not inadvertently leave consumers exposed, And this bill has created a strong support coalition of the California Association of County Treasurers and Tax Collectors, the California State Association of Counties, the Rural Counties Representatives of California, and the Urban Counties of California.

Testifying in support of AB 2705 is Sarah Dukett.

Senior policy advocate for the Rural County representatives of California, as well as Sacramento County director of finance, Chad Rindy. They can also help with the technical questions.

Thank you very much. First witness, you have two minutes.

Sarah Dukett, on behalf of the Rural County representatives of California, a proud cosponsor of AB 2705. 2705 will protect consumers by establishing those uniform frameworks for agreements to locate, recover, deliver, or assist in filing excess proceeds claims, including really important disclosure that consumers may file their own claim directly with the county for no cost.

The bill would also require written agreements between the parties, prohibit the collection of fees prior to the approval and payment of a claim, and limit fees to no more than 10% of the excess proceeds awarded for those who choose to file with the assistance of a third party. These provisions are modeled after existing safeguards in the state unclaimed property law used by the state controller's office.

This is really a framework that provides a tested and balanced process that protects consumers while still allowing legitimate service providers to operate.

Californians deserve the same type of consumer protections at the state level as they do at the local level. Ultimately, we wanna make sure that there is transparency and Californians can keep the majority of funds that are theirs. We believe the bill is a balance between preserving access to services and protecting consumers from excessive fees. As the assembly member mentioned, we are working with the real the California Realty Association on amendments to address their concerns and bolster the consumer protections in this bill.

For these reasons, I respectfully ask for your aye vote.

Thank you very much. Next witness.

Good afternoon, chair Gibson and members. My name is Chad Rindy. I serve as the director of finance and the treasurer tax collector for Sacramento County. I have eight years of experience in property tax administration as a treasurer tax collector in two different California counties. I'm here to support AB 2705 on behalf of our bill sponsor, the California Association of County Treasures and Tax Collectors, and I wanna acknowledge the committee work on the bill.

Now the core issue, AB 2705 is a straightforward consumer protection measure. When tax defaulted properties are sold, excess proceeds belong to the former owners or other parties of interest. There's already a free direct way to claim these through the county. However, what counties have been seeing increasingly statewide is the use of third party asset finder companies. They insert themselves into this process and charge significant contingency fees that can reach as high as 30-50% for what's often a simple filing.

Let's be clear, there's no statewide standards for, disclosures, timing, or fees currently. It's important because counties have seen document repeated patterns from these companies such as misleading solicitations, aggressive outreach, and attempts to manufacture claims of interest. You may hear the opposition share that, firms can perform this more efficiently than counties and the counties may have the misaligned incentives to administer these funds as they could revert to the general fund if unclaimed. In practice, those claims don't hold up.

These companies rely on the same public records already used by counties leading up to the tax sales, including obtaining PRA request to county offices to leverage our work that's already been performed.

Furthermore, counties conduct extensive statutory research and noticing before and after a tax sale, and the process for claiming these proceeds are standardized and free. AB 2705 mirrors the state controller's unclaimed property framework under civil code of procedure with clear disclosures, written agreements, no upfront fees, and a cap. This ensures transparency, prevents excessive fees, and protects Californians so they can maintain the funds that they're rightfully theirs. For these reasons, I respectfully ask for your aye vote.

Thank you very much. Anyone in support of this bill, this measure, twenty seven zero five, please, your name, your organization, and this is support.

Clifton Wilson. I've been asked to register support on behalf of the Urban Counties of California in support. Thank you.

Karen Lang, I was asked to lend support from the California State Association of Counties today, so in support. Thank you.

Thank you very much. Anyone in primary opposition to this measure, would you please come and have a seat at the table? A familiar face. Two minutes each. And you may proceed when ready.

Alright. Great. Thank you, chair and members. My name is Kristen Olsen Kate, and I'm here on behalf of Global Discoveries, a company that helps businesses and consumers find and recover funds owed to them that are held by counties after tax sales. We must respectfully oppose AB 2705 because the bill hurts the very people it seeks to help.

This bill does not protect consumers. Instead, it helps counties keep money that doesn't belong to them. A blanket one size fits all 10% cap on all agreements, whether it's an owner, a bank, a title company, or a dissolved business, ignores the different levels of complexity and cost involved in helping claimants recoup excess proceeds owed to them. These funds typically involve uninhabitable homes, vacant land, non residential investment properties, and so on.

Many claims involve multiple parties and require probate, title work, skip tracing, document reconstruction, just to name a few.

While we support claimants ability to apply to counties for these funds on their own and at no cost, The fact is the vast majority of these transactions are complex, and most parties don't have the time or expertise to navigate the process on their own. Without companies like ours, many never even become aware that excess proceeds exist. In a recent survey of over 5,000 successfully paid claims, over 50% said they would have never known about their claims without global discoveries.

That equates to over 36,000,000 that would have been deposited into county general funds, rather than given back to their rightful owners. Most large contracts are with sophisticated parties, not individuals.

Banks, investors, businesses, and cities have the knowledge and ability to negotiate fees they think are fair in return for our services. These clients should be able to set compensation based on actual risk, complexity, and time, and should be exempt from any cap. But even for individual consumers, a 10% fee does not reflect the cost of performing this work, and would have the consequence of eliminating access to assistance for the people who need it most.

AB 2705 will make most legitimate cases impossible to take on. The results will be fewer claimants found, fewer claims filed, and more money retained by counties.

We respectfully ask for your no vote today unless the bill is amended to address these concerns. And we have Jed Beck Beyerly, the COO of Global Discoveries here, who can also speak to some of the issues. Thank you.

Thank you very much. Two minutes, sir.

Good afternoon. Thank you. I'd like to address the difference between, you know, state unclaimed funds and excess proceeds because it's huge. State unclaimed I'm a licensed private investigator in several states, not in California. I do unclaimed property work in other states.

Unclaimed property is escheated in one name, the person's name who owns it. It's searchable on a statewide database. Excess proceeds are not searchable on a statewide database. They're not searchable in any database. They require extensive title work.

I have three full time title examiners. I have two full time private investigators. The work is totally apples and oranges. There are estates that have to be probated. Yes.

The counties, they notice people at the deed address from when they owned the property or bought it in nineteen eighties. They noticed people at their tax bill address from when they moved ten years ago. They stopped paying the property tax for a reason. Sometimes because they didn't have the money, sometimes because more often than not, they moved. They lost touch.

A relative died. Something happened. We fill a very needed void. Like miss Olsen said, over half of our clients would have never heard of the money. And the important thing here is if we don't step in and fill that role, all that money goes to the county's general fund.

It is never as cheated in the name of that owner that they don't get a second grab at it. They don't get to try at the state controller's office. How does that make sense? So, really, we would urge a no vote. We would urge some type of adjustments, something, some type of of compromise.

Because by the time people find out that the property was owned by their deceased relative, they may or may not have time to probate that estate. They may or may not have time if they're a defunct business, have the time or the funds necessary to bring their company active. I wrote a $20,000 check before I came here this morning to bring a company active so that they could file a claim for the excess proceeds. That owner of that company did not have that $20,000.

I can't do that work 10%.

I can't probate in a state at 10%. I can't go and find 16 heirs to grandma's house that's dilapidated and gone for 10%. This is a money grab.

Thank you very much. Anyone in the room wishes to speak in opposition to this measure, please come forward. I need your name, your organization, and this is opposition to 2705.

Hi. Lily McKay. I was asked to register opposition for the following organizations, Orchard, Asset Recovery Inc, Choice Plus, and KGM. Apologies for not getting a letter in on time, but aligned comments with Global Discoveries. Thank you.

Thank you.

Good evening. Also asked to register our position on behalf of down Downey Brand LLP, James Law Group, Dyer Law Firm, and the Shrek Firm. My name is David.

Thank you. Wanna bring it back to the committee. If committee members have any questions. Anyone in opposition?

Okay. This I mean, you're not, Sue Ann Byrd Dixon, but I just hope that she continues to work on this bill. I will vote on it today, but I'm not gonna guarantee on the floor.

Thank you.

Any questions from the author, miss Dickson, you may go?

Thank you, mister chair. On behalf of miss Dickson, I respectfully ask for an aye vote.

The motion is do passed to the assembly floor.

Thank you. I'm sorry. Let me say it in a record. This motion is do passed to the floor. Madam secretary, please call the roll.

The motion is do passed to the assembly floor. Gipson?

Aye.

Gipson, aye. Sanchez?

Aye.

Sanchez, aye. Carrillo?

Not voting.

Carrillo not voting. Demaio?

Aye.

Demaio, aye. McKinnor?

Not voting.

McKinnor not voting. Quirk-Silva?

Not voting.

Quirk-Silva not voting. Michelle Rodriguez. Michelle Rodriguez. Aye.

It's 4 to 3. It's out.

That bill is out. 4 to 3. Thank you very much.

What? They're not voting. It's four to zero. Oh, four to zero. Excuse me.

Yes. Four to zero. I'm sorry.

Stand corrected. That bill is still out, but it's four to zero.

No. Sorry about that.

Okay.

I am not voting on the policy.

So before we take up items on the suspense file, I would like to take a step back, from the individual bills and make a few general statements. The bills refer to the suspense proposed policy changes that would reduce the general fund revenue by between 5.7 to 8.7 billion dollars annually. It should be noted that this estimate is not on the low end as it does not include revenue reductions resulting from changes to the property tax law.

I know that these bills are well intended and that affordability is top of everyone's minds, my colleagues, but the tax expenditures are still a form of expending.

There are more spending through tax codes, few resources, we have to allocate in the budget procedures to address important priorities. Given the challenges and the multiyear, projected budget deficit, we must be thoughtful and strategic about California's future. It is the responsibilities of this committee to prioritize the tax expenditures that are most aligned with our state public policy goals.

Now having dealt with all the items under the regular order of business portion of the hearing, we will now take up the bills on suspense file and file item order, including bills that were presented earlier today.

Again, I just wanna stress that all the bills that authors have and members have presented are well intended. We have a responsibility as a committee to making sure that, one, that, we look at the state's priorities and not all of bills that come before us, do that. And so we had to do this in a very prudent way moving forward. And so with that being said, we will move forward.

So the first item of business is file item number one, AB 1726, Calderon, we will start with file item number one, AB 1726 by Assemblywoman Assembly member Calderon.

The chair is recommending an aye vote. Is there a motion? It's do passed to the committee on appropriation. Do we have a motion?

[Roll Call]

Aye.

McKinnor, Aye. Quirk Silva?