Senate Standing Committee on Revenue and Taxation

The committee on revenue and tax will now come to order. Let's establish a quarter. Secretary, please call the roll.

[Roll Call]

We have a qourum. And our first author is here. Would you like to come, Senator Dahle? Welcome to the, committee on, revenue taxation. We have five bills on today's agenda, with one item proposed for consent.

That is final item number five, AB 2641 by Assembly member Michelle Rodriguez. And now, I see that Senator Dahle is ready. Please present your bill.

Well provide tax credit for future citizen, caring for the grandchildren. Based on the conversation last hearing, I cook amendments to my bill. The bill now includes SGR limits. It excludes taxpayers who received qualified structured hair conveyments and received no tax credits. Here with me today, CHEDRAN FRED RASPROSE, for casual courtiers, to answer questions.

Yes good morning chair and members of the committee. Again to share some important facts Senate bill 1096 authorizes for tax years 2026 through 2030 It excludes the credit eligibility, for dependents for whom a foster care payment was made. The $1,500 tax credit phases out at a rate of 6% of income above $75,000 for single filers or a 150,000 for married, filing jointly filers.

The bill authorizes excess credit to be carried forward for seven years, and the amendments make other technical and conforming changes based on FTB recommendations.

The opposition that wish to speak in opposition to the bill? Seeing none, I will pass this to members of the committee. Anyone wish to make a comment? Senator Grayson, you're recognized.

Thank you, mister chair. For your leadership and committee's work with the author on this bill and the changes, the amendments that you've taken show a genuine effort and passion on your part to help those that are truly in need. And, I just commend you on your work on this. Thank you.

Senator, I I thank you for working on this bill with us and sticking with us. You're willing to accept the committee amendments is appreciated and really makes the bill something that that I am fully supportive. Many seniors do step up to care for their grandchildren and even their children and doing so on a fixed income on social security, and they need help from the state since, they cannot claim, Cal EITCs on this. I'm happy to support your bill today. Senator, would you like to close?

Right. Spectrum Astor, I vote.

Thank you. With that, we have a motion?

Move the bill.

Okay. Vice chair has moved the bill. Secretary, please call the roll.

Motion is do passed to the committee on appropriation. Senators McNerney.

Aye.

McNerney, aye. Alvarado-Gil? Aye. Alvarado-Gil, aye. Ashby Becker Grayson?

Aye. Grayson, aye. Three zero.

The bill is 3-0, and now we are on call. Thank you, Senator. Next, we have AB 672. Assemblymember Kolozov, please approach the bench and present your bill.

Good morning. Thank you, chairs, and thank you, chair and members of the committee for this opportunity to present AP 672 today. Thank you as well to the committee consultant, staff, and sponsor for their partnership and thoughtful work on this bill. AB 672 is simple, straightforward bill that extends a much needed tax exemption to assist in the making or refurbishing of low income housing. Habitat for Humanity benefits from a similar exemption that supports the construction of affordable homeownership.

The exemption in AB 672 provides similar support for community land trust projects, both rental and homeownership, that cannot be supported by the traditional welfare tax exemption. The existing statute provides that if a community land trust granted this exemption must repay the exempted taxes if the property was not developed or rehabilitated or if the development or rehabilitation is not in the course of construction within five years.

As such, the county only forgoes property taxes when the community land trust delivers on the promise of creating new affordable housing or preserving existing affordable housing. The cost to the counties varies directly in proportion to the benefit provided. Since the introduction of this exemption, community land trust have been able to build and refurbish a 101 units of low income housing, only costing the state less than $400,000 over the last five years in tax exemptions.

While the total number of units supported are modest, the tax savings have a significant impact on the viability of community land trust projects given the overall limited financing available to such projects. Community land trust housing remains affordable in perpetuity, unlike the many other types of affordable housing, making the benefit of the modest public subsidy even more impactful.

Some of the projects funded by the low income housing tax credit in California typically have affordability restrictions for fifty five years, and CLT projects are subject to a ninety nine year renewable ground lease that requires affordability for low or moderate income families. Recent conversations also show that both CLTs and assessors need continued education to understand the availability and use of this exemption. The more to use, the easier it'll be to use in the future, and impact will grow.

And with that, testifying in support of AB 672, I have with me as Jen Collins, operations and finance director of the Oakland Community Land Trust, and Jean Diaz, executive director of St. Joseph Community Land Trust.

Hi. I'm Jen Collins. And in addition to being the operations and finance director of Oakland Community Land Trust, I am a community land trust resident as well, and that's how I got involved in this work, by my house in 2013. And it has been a profound a profound blessing for my family and really lifted us about out of a place of instability around housing, food insecurity, and into the position we're in now.

So I just really wanna, first of all, just testify to how powerful the work is, like how meaningful it is.

And, as you heard, we're we don't need to be resubsidized. So all of our housing, when I when I sell my house, it goes to another family that needs it. It never needs resubsidization. So that that that moment of subsidy is is permanent and and locked in. You know, we're non profits.

We use community controlled land. We restrict it with a ninety nine year heritable ground lease. So it provides multi generational stability for our families. I think you already heard a lot of what Iim going to say. Well, Iim not going to repeat it.

But, I think I just one thing I really wanna lift up is that that subsidy that, you know, about just under $400,000 of basically, that tax exemption. When you break that down, that's, like, 4,000 less than $4,000 per unit for permanently affordable housing that never needs resubsidization. That is a really powerful impact. And we can continue to build from that, if the sunset is extended, that we have and we have projects in the pipeline. I know Jean does too, and and really to build on that.

So it's a lot of bang for the buck, and it really stays in the community. So that's pretty much my testimony, and I hope for an odd vote today. Thank you.

Good morning, chair and members. I am Gene Diaz, executive director for Saint Joseph Community Land Trust in Lake Tahoe. I wanna share three examples of, how this exemption has been applied in California. First, Saint Joseph Community Land Trust, my organization, we use the exemption to support the construction of three moderate income ownership homes in South Lake Tahoe where housing costs are high and increasing at a at a rapid rate.

The exemption of approximately $13,000 for these three homes was critical to the project which experienced unexpected cost increases as a result of the pandemic.

In 2024, these homes were built on land donated by the city of South Lake Tahoe. They were sold to three moderate income local families with young children, all of whom worked in the Tahoe Basin in construction, veterinary medicine, hospitality, and early childhood education. They were all local residents that went from rental to homeownership. Despite the tax exemption and donation of land, the cost exceeded revenue by over a $100,000.

So the the while it was important, the actual cost, it's so difficult to do projects in California and especially places like Lake Tahoe.

Everything helps. Second, artist space trust, the area community land trust focused on housing for artists is currently rehabilitating a duplex in San Francisco that was donated to them. Property will be converted to a limited equity housing coop and sold to two low income artist households. The tax exemption will save them approximately 22,000 that can be invested in in the rehab and long term affordability of the homes. The third exemption is supporting Oakland Community Land Trust to rehabilitate two vacant single family homes.

The first home was sold to a low income couple with young children, both of whom are lifelong Oakland residents for whom ownership was really out of reach until this project came along. This $900,000 home was sold for under $330,000 The second home is a five bedroom house that will provide much needed affordable housing for a larger family, something increasingly hard to find in the private market because these homes use the community land trust ground lease.

You've mentioned now or heard a couple of times, it's permanently affordable. It's multigenerational. So it's not just this first family, it's the second, third, and fourth generation that will benefit from any subsidy for these these homes.

There are many more projects in the pipeline that will provide stability for working families in the future years, but that will not be possible without passage of AB 672. Thank you. I respectfully ask for your aye votes.

I think the witnesses are there any other members of the public that wish to, voice their opinion on this in support?

Good morning. My name is Nigel Birglow. I'm a coordinator with the Republican Community and Trusting Network. We're a membership organization of 50 CLTs across the state, in strong support. Thank you.

Any other witnesses in support? Are there any lead witnesses in opposition? Seeing none, are there any witnesses from members of the public that wish to voice their opposition? Seeing none, I will now turn to members of the committee. Mister Senator Grayson, you're recognized?

Thank you, mister chair. And again, thank you for your work and committee's work on this bill as well as I wanna commend the author. We we do a lot of work in the capital, our in legislation. We pass a lot of legislation and tag the word affordability to it, and then hope the needle even flutters a little bit. This is one of those kind of things that actually moves the needle.

And what's interesting is that, through the community land trust, we we actually are able, at least present day, to keep 220 to 200 and, $50,000,000 of assets such as housing off the speculative market. And it makes it possible for folks who would have never even dreamed of homeownership to be able to have that opportunity. This is, something that I absolutely 100% support and thank you for your work. And, we'll be supporting your bill today.

Thanks, Senator. Any other comments? Well, not seeing other comments. I wanna thank you, Senator Golozit, for this. I think land trust is a great way to preserve land and to do other environmental and social benefits.

Community land trust is one case of that and seeing some of the examples we've heard today I think makes a difference. We know that the housing situation in California is dire. Everybody wants to do something about it. This is one thing that's actually starting to work. So I thank you for bringing this forward.

I'm happy to support your bill. Would you like to close?

Thank you, chair. Thank you, Senator Greason, for your comments. I'm just respectfully ask for I vote so that we can continue to hopefully use this model and expand it more throughout the state to make California more affordable and to help with our housing crisis. Thank you.

Thank you very much. Seeing no other comments, we're ready to ask for a vote. Would the secretary call the roll? Well, do we have a motion? So moved.

Thank you. Senator Grayson has moved the bill. And we now call the, the roll.

Motion is do passed to the committee on appropriations. Senators McNerney.

Aye. McNerney,

aye. Alvarado-Gil. Aye. Alvarado-Gil, aye. Ashby, Becker, Grayson.

Aye. Grayson, aye. Three zero.

The bill is on call. Thank you.

Thank you, chair. You're appreciated.

Next, we have AB1668, Assembly member Pellerin.

Proceed when ready.

Good morning, chair and members. The original intent of the Welfare Property Tax Exemption was to assist non profit organizations that purchase open space lands, held the lands temporarily, and then sold or donated the lands to public agencies for permanent use as park facilities.

Today, this exemption has been in place for more than I'm sorry, 40 years, and it has proven to an important tool in protecting habitat and California's unique flora and fauna, and for providing recreational opportunities to Californians.

The tax exemption for open space properties has a sunset date of 01/01/2027, and allowing that sunset to expire will increase the cost to a point where land trust may be unable to afford to maintain and steward important natural lands. Accordingly, the land could be put up for sale, and pending state intervention to protect these natural lands could be purchased by a developer.

AB 1668 simply extends the sunset for the welfare tax exemption for five years so that land trust can continue to steward our vital natural lands. With me to testify in support is Caroline Godkin, Executive Director of the California Council of Land Trusts.

Good morning, chair and members of the committee. My name is Caroline Godkin, and I'm the Executive Director of the California Council of Land Trusts. We represent the over 100 land trusts throughout the State of California that are the private nonprofits that protect land in perpetuity. We estimate that there is over five and a half million acres currently protected by land trusts.

We're so grateful to Assemblymember Pellerin for bringing forward AB 1668 that would continue this, important natural resources and open space lands welfare property tax exemption for a further five years.

This exemption has allowed land trusts to focus unlimited funds on the long term stewardship of these important protected lands, and in many cases, on providing public access, education, and other activities that would not otherwise be available. We respectfully ask for your support to maintain this important property tax exemption that has been in place since 1971. Thank you.

Do we have any other members of the public who wish to speak in support of the bill? Please state your name and organization.

Good morning, chair and members. Rico Mastrodonato. I'm the Legislative Director for the Trust for Public Land in support.

Thank you.

Good morning. Jake Schultz on behalf of the Land Trust of Santa Cruz County and Sempervirens Fund in support. Thank you.

Thank you.

Good morning, Mister chair. Mark Fenstermaker here on behalf of Sustainable Conservation as well as ask to provide support from the Nature Conservancy. Thank you.

Thank you. Any other witnesses wish to voice their support?

Do we have any members of the of the major opposition that wish to make their case?

Seeing none, members of the public wish to speak in opposition? Seeing none

Well, looks like we do have one. Please approach, state your name and your organization.

Michelle Warshaw, California Teachers Association, a respectful opposition.

Thank you. Alright. Bringing this back to the committee. Any committee members wish to voice an opinion on the bill?

Seeing none, assembly member, I thank you for this.

Again, we're talking about preserving lands and I think that's very important. I've always been a supporter of habitat conservation plans, but this is another way to look at it. The bill extends to sunsets, that's an important property tax exemption to keep California beautiful. Not all open spaces are state parks or national parks and nonprofit organizations that protect open space and recreational lands the public can access should not pay these taxes. I'm happy to support your bill.

Would you like to close?

Thank you so much. The bill has received bipartisan support, and I respectfully ask for your aye vote.

Very good. Do I hear a motion?

Assemblymember Grayson moves the bill. Would you please call the roll?

Motion is to pass the committee on appropriation. Senators McNerney?

McNerney, aye. Alvarado-Gil?

Aye.

Aye.

Alvarado-Gil? aye. Ashby? Becker? Grayson?

Ashby Becker Grayson? Aye. Grayson, aye. Three zero.

Aye.

Grayson, aye. 3-0.

The vote is 3-0. The bill is now on call. Thank you, Assemblymember.

Next, we have AB 2022 Jeff Gonzales.

Assemblymember, please make your case.

Thank you, Chair McNerney. Senators, I'm here today to present AB 2022. California is home to more than 1,200,000 veterans. 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.

I stand here. I sit here, not only as a legislator, but as one of those veterans, a 100% disabled combat veteran who served 21 years in the United States Marine Corps, and mind you the only veteran in the State Assembly. Nearly 25% of homeless veterans are located here in California, the highest percentage of any other state.

I sit here, not only as a legislator, but as one of those veterans, a 100% disabled combat veteran who served twenty one years in the United States Marine Corps, and mind you the only veteran in the state assembly. Nearly 25% of homeless veterans are located here in California, the highest percentage of any other state. These are men and women who answer the call to serve, often at great personal cost.

These are men and women who answer the call to serve, often at great personal cost. 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.

We ask them to put everything on the line, sometimes their health, sometimes their future, earning capacity, and risk their lives. In return, we we make a promise.

We make 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. AB 2022 is a step forward toward fulfilling that promise.

Specifically, AB 2022 expands the existing property tax exemption for veterans with service connected disabilities to 100% for low income individuals and 50% of assessed property value for others.

Amendments recently taken close a small loophole to ensure that no veteran ends up with a smaller exemption than exists in law today as a result of this measure. I would like to thank the committee's staff for their work in coordination with my office and those amendments to strengthen this measure.

I would like to thank the committee's staff for their work in coordination with my office and those amendments to strengthen this measure. Senators, this is about doing right by those who have already given so much. With me today, I have fierce advocates, Yolanda Benson and Seth Reeb, who will also provide comments. I respectfully ask for your aye vote, and I'm happy to answer questions when you'd like.

Senators, this is about doing right by those who have already given so much. With me today, I have fierce advocates, Yolanda Benson and Seth Reeb, who will also provide comments. I respectfully ask for your aye vote and I'm happy to answer questions when you'd like.

Good morning. Yolanda Benson. Good morning, chair and members. I'm representing the California Association of County Veterans Service Officers. Last year, the 56 county veteran service officers secured over $580,000,000 in new and increased federal benefits and engaged with approximately 800,000 veterans and filed over 300,000 claims.

So we're very proud and we wanna thank the assemblyman for his leadership on veterans issues and for AB 2022. And as mentioned, he talked about what the bill does. We know that it also includes spouses, and we just want to remind you that families are going through it as well as the veteran. It is a family matter. So that is a very, very important inclusion.

California remains as an outlier in its approach towards meaningful tax incentives, which would keep veterans in California. Keeping veterans in California will most certainly boost the state's workforce and ultimately increase our state revenue.

California is losing military retirees and other veterans to other states such as Texas, Georgia, and Florida. We've lost military retirees by 27% since 2000, while The US has gained. So what we want to ensure is that we're not losing them to other states.

In 2025, as the analysis points out, Governor Newsom did include a partial tax exemption in his budget. The resulting exemption of 200,000 of military retiree pay effective for tax year 2025. We believe AB 22 adds to the next step for keeping veterans in our state. California is competing with other states to the veteran for the veteran population through tax incentives. Not all veterans are broken.

They are succeeding and they are thriving even with the scars that they bear from their service. For the example that's sitting right here next to me and Assemblyman Gonzales and others, veterans offer so much to our state, contributing to our state with knowledge and assets, including taxes that contribute to the overall good of California.

Veterans are now making decisions about where to live, and our active duty members who are currently serving will be making those same decisions when they come out of service.

They need to know that California is prioritizing veterans. We ask for your aye vote. Thank you.

Thank you.

Good morning, chair and members. My name is Seth Reeb with Reeb Government Relations. I'm also a disabled combat veteran with two tours, one to Iraq, one to Afghanistan. I'm here representing American Legion, AMVETS, the California State Commander's Veterans Council, Military Officers Association of America, the Vietnam Veterans of America, on behalf of their California departments and councils. We're in strong support of AB 2022.

Assembly member Gonzales laid it out plainly because it is plain. California has approximately 380,000 veterans living with service connected disabilities. The structure of the existing exemption has not been meaningfully updated since 1989. This bill is a long overdue step in the right direction. California disabled veterans and other veterans bring in a combined $12,400,000,000 in federal benefits annually into the state.

Those dollars flow back into the California economy and they follow the veteran should they choose to leave the state. California, keeping our most service severely disabled veterans in their homes is not just the right thing to do, it's sound economic policy. My clients strongly support this bill and we respectfully ask for your aye vote.

I thank the assembly member and the witnesses for your testimony. Do we have any members of the public that wish to voice their support? Please state your name and your organization.

Chair of the members, it's a support if amended from the Kern County Board of Supervisors. Your favorite county, mister chairman. They support absolutely support the intent of the bill and their local veterans. Just ideally, there would be money in the state budget to pay for this tax credit so that it didn't fall on the on the counties, especially as they're looking at the cost of HR1 implementation. Thank you.

Thank you. Thank you. Any other members of the public who wish to voice support? Are there any witnesses in opposition? Please approach and state your organization.

Thank you. Any other members of the public who wish to voice support? Are there any witnesses in opposition? Please approach and state your organization.

Saying none, I will turn to the committee. Senator Alvardo-Gil, are you recognized.

Thank you, Mr. Chair. I want to acknowledge the author in bringing forward this bill. From day one, you've been a champion for veterans amongst others, groups in your constituency. But from the day that I started serving here in the legislature, I have been overwhelmed by the lack of action here in California to help protect our veterans, particularly in housing and healthcare and resources.

I think for me, this bill really, it's sad we have to bring it forward because this should be already set here in California. We should have our veterans, our men and women in uniform who come back home to be able to actually live at home and be at home.

So I just want to thank you for bringing up an issue that we've talked about for so long here in California, but actually making it work, getting the support, bipartisan support, and representing well your constituency and that you bring forward. Thank you for your service.

Any other senators? Senator Grayson?

Thank you, Mr. Chair. Thank you to the committee and chair for your leadership on this bill, helping it. And you are to be commended to assembly member for doing something that, again, with the previous bill actually moves the needle. And if it wasn't for efforts like this, we could very well see, veterans who are pushed out onto the streets.

And this is taking it the opposite way. This is taking folks that would have been on the street and making sure they continue in their homes. And I know that we have to be careful, especially on this committee, and that we have an incredible chair and leader who always considers this. There are folks that are impacted when we do a tax exemption or when we do a a tax credit, counties for instance, or our schools.

But this is one of those cases where we have to just figure out other ways to make sure folks stay whole so we can take care of our veterans. Thank you very much for the bill. I'll be supporting it today.

THANK YOU VERY MUCH FOR THE BILL. I'LL BE SUPPORTING IT TODAY.

Any other Senator wish to comment?

Seeing none, Assemblymember Gonzales and Seth, thank you for your service. My own son is a veteran. My father and my stepfather are veterans. So this is personal.

I want to thank you for bringing forth the bill. You have been a forceful advocate for disabled veterans of the state. The bill recognizes a tremendous sacrifice you and others like you have made for our great country. I'm happy to support your bill. Senator, would you like to close?

Thank you. First and foremost, I wanna thank the senators for being here and recognizing this important need. I have personally seen your advocacy, your staunch consistent advocacy for veterans. So, I am thankful for that, and the veterans of of California are thankful for that. With that, I respectfully ask for an aye vote.

Motion is do passed to the committee on Military and Veterans Affairs. Senator McNerney?

Aye.

McNerney, aye. Alvarado-Gil?

Aye.

Alvarado-Gil, aye. Ashby? Becker?

Ashby Becker.

Aye.

Becker, aye. Grayson?

Aye.

Grayson, aye. 4-0.

The bill is on call. Thank you.

Thank you.

The rating item is AB 2641, which is now on the consent calendar. So moved. Consent calendar is moved. Would the, secretary please call the roll?

[Roll Call]

Aye.

McNerney, aye. Alvarado-Gil. Aye. Alvarado-Gil, aye. Ashby Becker.

Aye. Becker, aye. Grayson? Aye. Grayson, aye.

Four 0.

4-0. Consent calendar is on call. And at this point, the committee will go into recess. Well, I guess we can pick up the two bills that, Senator Becker missed. The first is SB 1096, Senator Dolly, personal income tax, for senior tax credit. With the with the secretary call the roll.

With the with the secretary call the roll.

[Roll Call]

Aye.

Becker, aye. Four zero.

The vote is four zero. The bill is on call. The next would be AB 672, Caloza, real property tax, welfare exemption, community land trusts.

[Roll Call]

Aye.

Becker, aye. Four zero.

The vote is four zero. The bill is now on call. And, you missed the AB 1668. So, the bill is AB 1668, Pellerin, property tax welfare exemption. Will the secretary please call the roll?

[Roll Call]

Becker, aye. Four zero.

Bill is 4-0, and the bill is on call. At this point, the committee will go into recess. Now close the bills that were put on call. First, we have SB 1096, Senator Dolly, a personal income tax exemption for seniors, with the pending dependents. Would the secretary please call the roll?

[Roll Call]

Ashby, aye. Five zero.

Five zero. The bill is out. Next, we have AB 672 Coloza Real Property Tax, Moving for Exemption. I'll let the secretary call the roll?

[Roll Call]

Ashby, aye. Five zero.

The bill is five zero. The vote is five zero. The bill is out. Thank you. Next, we have AB 1668 by Pellerin, property tax ex welfare exemption. Would the secretary please call the roll?

Would the secretary please call the roll?

[Roll Call]

Ashby, aye. Five zero.

The vote is five zero. The bill is out. Next, we have, AB 2022 by Jeff Gonzales, property tax exemption for disabled veterans home owner Veteran Homeowners. Will secretary call the roll?

[Roll Call]

Ashby, aye. Five zero?

Aye.

The vote is five zero. The bill is out. Lastly, we have, what the the consent calendar, which includes AB 2641, by Michelle Rodriguez. Secretary, please call the roll.

[Roll Call]

Ashby, aye. Five zero.

Consent the consent calendar is adopted. With that, thank you. This is the committee will know will terminate. Will know. Adjourn.

Adjourn.