Senate Standing Committee on Revenue and Taxation

Committee on rev and tax will not come to order. Good morning and welcome to the Senate Committee on Revenue and taxation. We have 21 bills on today's agenda with two bills proposed for consent. The the, the consent bills are file item one AB 611 by Assembly member Lee, and file item 13, AB, 2167 by Assembly member Macedo.

File item 21, AB 2705 by Assemblymember Dixon has been pulled by the author, and Vice Chair Abaro Gill is unable to attend today's hearing.

We do not have a quorum yet, so we'll begin as a subcommittee. We see one of the authors in the house. Sami Mabrata on AB 760, please come and present your bill as a subcommittee. I need a scratch pad.

Good morning, Chair and Senator. Today, I'm here to please introduce ABA 760, a bill that would ensure the victim of the Garden Grove chemical incident that will be make whole. I would like to start by thanking the committee staff who went beyond and above in working with my office, and I will happy happy to accept the the commitment and amendments. On May 22, over 50,000 residents of Orange County were evacuated to the issue of of the chemical tank.

Directing up the tank to releasing pressure became a big concern to everyone in the community.

And thankfully, with the hard work from the Orange County Fire Authority and several other agencies from the federal state and local, we could able to prevent a disaster. Until the disaster was avoided, many of those evacuated still suffer losses. School were closed. Family was forced from their home to find shelter. Small businesses that survived on small merchant were forced to close, and many low income families lost.

Recall wave. I did visit a few shelter at a time and received many concerns from many of my constituent. That result, today, there are several lawsuits that have been filed seeking compensation for these losses. Under current law, a settlement that may arise from this lawsuit can be considered income and tax. This fund are intended to make victim whole.

Current law would allow the state to take a cut of compensation that it intended for victim. Taxing this compensation reduce ability of this settlement to make victim whole. AB 760 ensure that settlement that come from Garden Road chemical incident will be exempt from California income tax. Victims will be fully compensate and allowed to recover AB 764 of California residents by ensuring that victims are fully reimbursed. I'd like to introduce my witness, Mister Lan Wang, trustee of Granite Road School Unified District.

Good morning, Mister chairman and the community members. I am Lan Kwok Nguyen, the trustee of Elgato Unified School Districts. I'm here to testify in support of AB 760, sponsored by Assemblyman Tree TAR. Our school districts serve over 33,000 students in 68 school sites, from the kindergarten to high schools. Due to due to the chemical leak evacuation, on a moment notice, we had to shut down 50 15 schools affecting 8,000 students and about 1,000 employees.

With this number of students and staff members being affected, we have a larger number of the Pan family member and other relatives being evacuated as well. As we were attending to this one quarter of our district population, we still had to maintain regular operation to the other three quarter of our district community, especially during the last few days of schools, including graduation and other school and activities.

We estimate that we have incurred over 56,000 for serving lunches to the students who were evacuated and also suffered $2,250,000 in cost in loss of services to our district staff. Along with our, school and district community, we had witnessed on phone losses to our business and resident. Due to the dangerous, short notice, and urgency nature of this evacuation, our community has suffered far more losses than they could if they could plan or have some time prior warning.

They had

to endure the traumatizing experiences of not knowing what might happen next, pay far more expenses for the basic need before emergency services kick in. These losses could have been much less if they had some more time for warning or preparation.

Now that we don't know if they can ever recover any losses or damages that they suffer. But if they do, they should be allowed to keep whatever little recovery they can. Therefore, a vision of the a p seven sixty may not make them whole, but it would provide an immense comfort to the people that the stake is doing what it can to assist the victim in this very extraordinary disaster. Thank you to Mister chairman and the community member for listening to my testimony today.

I'm I'm the chief of technical.

Well, I thank the, the author and the witnesses. Are there any members of the public that wish to, voice their opinion, in support of this bill? And if so, please approach the microphone and limit your comments to your your affiliation and your support. Seeing no members of the public approach the microphone. Okay.

Seeing one.

Apologies, Mister chairman. Amy Jenkins on behalf of the Orange County Board of Supervisors and strong support. Thank you.

Thank you. Seeing no other members, no other members of the public voicing support, are there any members of, of in primary opposition that wish to make their case? Seeing none, are there any members of the public that wish to voice their opposition? Seeing none, I will turn to the committee and see if any committee members have comments. Seeing none, city member Todd, I wanna thank you for your presentation.

And I I wanna thank you for saying that the staff goes above and beyond because they do. I appreciate that. The Garden Grove chemical leak harmed residents clearly, and businesses through no fault of their own. There are settlement payments. The bill says that California will not tax those settlement payments.

That's fair. Are you I just wanna clarify that you are accepting the committee amendments.

Yes. I do. And I really want to thanks, I really want to thank the Chair and the committee staff for working really hard on this bill. They all go, both and beyond, and I really appreciate that. And this bill is really important, for my district.

I still remember that for the last four or five days at a time, every day that I visit a few shelter in my district, and I receive a lot of concerns with with a lot of a lot of a lot a lot of my constituent, they really, really worry. They didn't know what happened because it never happened before.

And until now, a lot of president in my district, they continue to call me to ask me about what would happen, you know, because, you know, they, they have a lot of losses. Like, they had to take, day off from work, and their family was evacuated. So I I I experienced that because that that happened in my district.

So I respect my ask you, I vote. Alright. Thank you, sir. Thank you.

Thank you, sir.

Senators McNearney.

Here.

McNearney present. Alvarado Alvarado-Gil, Ashby, Becker?

Becker Becker present. Grayson? Here. Grayson present. Motion is do pass as amended to the committee on appropriation.

Aye.

Senators McNerney.

Aye.

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

Aye.

Becker. Aye. Grayson.

Aye.

Grayson. Aye. Three zero.

The bill is now on call. Alright. Thank you. Any other authors present? The committee will now go into recess until we have another author.

And then the reminder is...the Committee on Revenue and Taxation will come to order. And just a reminder, item 21 has been pulled by the author and, also, item number two, AB 1675 Assemblymember Lee has been pulled by the author as well. We do have an author with us today. Item number 16, AB 2319 by Assemblymember Schultz. And you may present when you are ready.

Well, good morning, senators. Thank you very much. I feel like this is an intimate conversation about a topic that I care deeply about. I am pleased to present Assembly Bill 2319 this morning, and I hope you'll indulge me for a few hopefully entertaining comments. I do want to begin on a serious matter and thank the committee profusely for all the work that has been done on the bill.

And wanna go with, before we go any further, just mention that I will be accepting all of the committee amendments listed in comment eight of the committee analysis. As we all may know, California remains the center of the global film and television industry, but post production work, including editorial, sound scoring, visual effects, and finishing, is increasingly being performed in other jurisdictions that offer targeted competitive incentives. Current law limits eligibility for the California motion picture tax credit primarily to projects that complete principal photography in our state.

As a result, post production work is often moved to competing jurisdictions that offer stand alone or more flexible incentives for post production activity. I hate to say it, but California's a little late to the game on this one.

States and countries already offer and have offered for some time. These incentives include, but are not limited to the states of New York, New Jersey, as well as Canada, the United Kingdom, and Australia. These policies have led to the migration of high wage jobs, vendor spending, and economic activity out of the state of California. Major post production editorial facilities, including scoring stages operated by Sony, Fox, Warner Brothers, and Skywalker Sound, are generating substantially less revenue than in previous years, and face the risk of closure.

Economic analysis demonstrates that post production incentives generate significant returns on public investment through increased taxable wages, local vendor spending, and broader ancillary economic activity.

Without a targeted post production incentive, California risks further losing a critical segment of the entertainment industry supply chain that has truly defined the state, even when creative leadership remains largely based in the state. AB 2319, if approved, would create the California Postproduction Tax Credit, a targeted incentive for qualified post production expenditures performed in California regardless of where principal photography occurred and subject to program requirements and oversight.

I'd like to note that this post production tax credit is not tied to the $750 million budget for the Motion Picture Tax Credit that was passed last year. I have submitted a pending budget request to establish the separate funding that this program anticipates, and I'd also like to note very importantly that to be eligible for this contemplated postproduction tax credit, the project either needs to be filmed outside of California or be a project that was filmed in California, but did not receive the Motion Picture Tax Credit. Point I'm trying to make is there is no double dipping permitted. Voicing their me-too, and now to the more fun part.

Voicing their me too support today are many members of the Motion Picture Editors Guild, IATSE Local 700, and others with the California Post Alliance, and I wanna thank both of those organizations for their steadfast support in getting us here today. You're also, going to hear, some, pretty exceptional me too comments, including from 10 time Academy Award nominated rerecording mixer, Anna Belmer, Picture Editor, Maisie Hoy, and Post Executive, Ted Galliano.

But before all that, with me today to speak in support of AB 2319 is F, Hudson Miller, President of the Motion Picture Editors Guild, IATSE Local 700, and Marielle Abaunza, President of the California Post Alliance. And at the appropriate time, Mister Chair, I'll respectfully ask your aye vote.

So I'd like to remind the, witnesses that you have two minutes to present.

Yes. Thank you, and thank you. Good morning. I proudly represent the Motion Picture Editors Guild, the world's preeminent labor union and post production professionals. Our members work, the magic of transforming raw camera footage into the stories that transfix the world.

We have more than 6,200 members in California, the historic heart of our industry. But our industry and our heart is ailing. Our California membership has shrunk by 15% in the last four years, a loss of 1,100 hardworking, middle class members. We have lost 3% of our members in this past year alone. These aren't statistics to us.

They're our union sisters, brothers, and kin. They're talented artists and craftspeople, and, yes, California taxpayers, whose lives have been upended by the employment crisis in our industry. Too many of them no longer believe they can support themselves and their families doing the work they love, in the state that they love. That's why we must follow the lead of New York, New Jersey, and other states by establishing a stand alone post production tax credit. That's why our union, loudly, proudly, and without reservation, cosponsors this bill.

That's why our members have written more than 1,200 letters to members of this committee. These 1,200 letters have just one message. We need to pass AB 2319. Like many of our members, I am a Californian by choice. I moved here because this state was the undisputed capital of movie making.

I've had a rewarding career in this industry spanning decades, helping to bring cinematic magic to screens across America and around the world. I have been living the California dream. The challenge before us is how to keep this California dream alive. Alive right here where it belongs in California. California, the state that historically been the heartbeat of American storytelling.

California -

Would you please wrap up your, excuse me, would you please wrap up your testimony?

Would you please wrap up your -

Sure. Pardon?

Please keep this California dream alive. Vote to pass AB 2319. Thank you.

Hi. Good morning. Dear Chair McNerney and members of the committee, thank you for the opportunity to speak today, and thank you Assemblymember Schultz for your leadership with this bill. My name is Marielle Abaunza, and I serve as the President of the California Post Alliance, and I work in business development at Signature Post. I am here representing thousands of California residents who work across all areas of postproduction, including picture editorial, sound, music, color, VFX, and finishing.

While our names do not appear on movie posters, our work brings every film and television show to life. The challenge for the postproduction community is that our struggles are often invisible. When production leaves and studio lots are empty, that makes headlines. When post leaves, the loss is quieter. The resulting layoffs, facility closures, displacement of our workforce, and the anxiety felt by the next generation go unnoticed.

Jurisdictions such as the UK, Canada, and New York have offered robust standalone post production tax incentives for years. New York has had there for sixteen years, while California is only now considering its first iteration of this tax incentive. Consequently, jobs and taxable income are being transferred out of the state as a routine business decision. With AB 2319, we are simply asking for the opportunity to compete. We still have the largest pool of postproduction talent and real estate infrastructure of anywhere in the world.

AB 2319 is a targeted step to retain and reclaim those high wage, long duration jobs and support California businesses. This bill recognizes that post production is not an afterthought. It is an essential part of the entertainment ecosystem. Many post production businesses will not survive if this bill does not pass during this session.

Passing and funding AB 2319 sends a powerful message that our state legislature is committed to California's creative economy, ensuring that California continues to be the entertainment capital of the world for generations to come.

I respectfully ask for your yes vote on AB 2319. Thank you.

I thank the witnesses. Are there any members of the public that wish to voice their support of bill? If so, please approach the microphone, give your name and affiliation, and your support.

Hi. Austin Scott, twenty-year veteran TV film editor out of work for the last three years, now doing art for a living. I made this pin. I'm here to please ask you to support this bill. Thank you.

Hi. My name is Doug Siebum. I'm a sound editor with Motion Picture Editors Guild 700. I live in Richmond, California, and I strongly support this bill.

Sam Hood, on behalf of Universal Music Group, in support today. Thank you.

Hi. I'm, Ted Gagliano. I've been president of post production for twenty Century Fox for thirty years, and I'm here to support the workers for this bill, which is so needed. Thank you.

Good morning. Isha Ayur, on behalf of the City of Burbank, in support.

Hi. I'm Maysie Hoy. I've been a film editor for over thirty years, and I've been out of work for close to two years, and I totally support this bill.

Russell Manning on behalf of the California State Treasurer - sorry, Fiona Ma, in support.

My name is Mark Camperell. I'm the Creative Director at MPC Audio, and I also sit on the Board of Directors for the Motion Picture Sound Editors. I've been a sound editor and rerecording mixer for twenty years. This bill is about protecting middle class jobs. Hollywood is not all about glitz and glamour, and we're also spread all over the entire state.

Thank you.

Hi. My name is Eric C Anderson. I'm a film editor, and I've never seen this business like this. I've lost my health care at a time. My wife is having a very big health crisis.

Please help us get back to work.

Hi. Sound people, you know. Hi. Anna Belmer. I'm a rerecording mixer, and I have been in this industry for forty three years.

And it's very difficult to encourage the young who are coming in because I don't know what's going to happen. But, this bill is going to give them hope, going to give the industry hope, and we desperately need it. So, please, please pass this bill.

Hi. My name is Fred Paragano. I've been rerecording mixer. I've been doing this for thirty years. And I really believe that this will help maintain the relationships that we build with our directors and our friends for many, many, many years.

I'm in support.

Maureen Toth, Owner of Eastern Talent Agency in Los Angeles, representing many postproduction professionals watching for twenty plus years, watching over the last handful of years the suffering and loss of jobs in my community and also the latter for the younger folks coming up has been a very difficult situation, and I think this bill would absolutely help to bring post production a strong post production community back as super necessary. Thank you so much.

Hello. My name is Dan Schmidt. I'm a Visual Effects Supervisor and Founder of Interim Hollywood. We're a twenty five year visual effects company representative of a lot of the small companies and posts that make up the fabric of post production. We need this bill.

We're suffering. Please pass this bill.

Hi. My name is Lillian Benson. I have been working as an editor in California for thirty years. I worked ten weeks last year on a project that took a break and then we started in Illinois to finish the project. We need this bill.

First of all, thank you, members of the committee for doing all of the work you do in our great and wonderful state. Incredibly granular stuff. I'm Ben Urquhart. I'm a board member of the California Post Alliance and a post executive strong supporter of this bill. We need the jobs. And the hour is back. Thank you.

Hello. Good morning. My name is David Torres. I'm a producer, working in film and television. We need this bill. Help us keep middle class jobs in California. This is for the middle class. This is to help keep people working and, you know, people young people energized and wanting to keep working in this industry. Thank you.

Good morning, Mister Chair and members. Dylan Hoffman on behalf of the California Arts Advocates, the city of West Hollywood, and mayor of Los Angeles, Karen Bass, in support.

Good morning, senators. Mike Robeson here on behalf of The Walt Disney Company, which is the parent company of Industrial Light and Magic, which is the birthplace of visual effects from from Star Wars movies. We're in support of the bill. We want we we're working with the Assemblymember Schultz on language specific to the visual effects industry.

ILM, industrial light management, is working with a a broader group of of VFX studios to to to to add some language to the bill, and and we're working with the Assemblymember Schulz. We wanna see the bill move along. Thanks.

Thank you. Any other members of the public who wish to o voice their support of of AB 2319? Are there any, major voices in opposition to AB 2319? Any members of the public wish to voice their opposition? Seeing none.

Very good. I will now turn to the committee and see if there are any comments. Senator Grayson, you're recognized.

Thank you, Mister Chair, and thank you to the committee and Chair for, working with the author on this. To the author, a great bill that we definitely need to move forward. Would be honored to be able to be added on as co author. Thank you, sir, if that's possible. I wanna state that some folks look at tax credits a different way.

I don't see it this tax credit as a liability. I see this tax credit as an investment. This is California. This is what made California, or as a part of the fiber, what made California what it is today. And to be able to move this forward keeps the fabric of California whole.

So with that, I will heartily support your bill. Thank you.

Senator Becker, you're recognized.

I wanna thank the author as well, for your leadership here, and thank you everyone who came to, testify. You know, I really enjoy being on this committee because we have the opportunity to look in and support industries like this. We also have to make tough decisions about sometimes about where to invest as a state. But I think as my colleague just said, these jobs are this issue really started here, and to hear the personal testimony of, everyone here today, about the lawsuits jobs is incredibly powerful.

So, I will be supporting the bill today, and look forward to working with all of you.

Well, thank you, Assembly member Schultz, for bringing this, bill forward, AB 2319. The California film and television industry has helped California become what it is. And it's really great to see some of the folks that are in the back rooms making these films, the incredible, works of art that they are. So I appreciate you all coming forward with your stories and, your, the situation that that you've become in, and and now we need to figure out how we can reverse that.

The tax credit has helped keep production in the state, but post production work can face much different challenges.

AB 2319 provides a targeted tool to help retain and grow past past, past production jobs in California, supporting the workers and businesses and the broader entertainment industry here in California. I wanna thank you, for working with, the committee, and the opposition, to strengthen the bill. We can always make things better. Are you accepting the committee amendments for the record?

Yes, sir.

With that, I will be supporting the bill. Assemblymember, would you like to close?

Just briefly, Mister Chair. Again, thank you, to you and your team for working with us on those amendments. I will leave it to those of you, who will be listening to my, comment here as I close to figure out which Me Too witness was a stormtrooper in the original Star Wars movie. A little fun point of trivia there. I'm happy to tell you offline afterwards, and thank you, Senator.

We'll add you as a co author. I just wanna make one point, and it's not so much to the members of this committee who I think get it, but to your colleagues that might be tracking this, to the administration that might be tracking this bill. The stories that you heard, that is my lived experience. I could walk up and down my block, and you will hear the same stories. Not just in my district.

It really is around the state. We people are hurting right now. And the point that I want to make is this. This bill has to move this year. And I thank you all for exercising your leadership in moving it past this committee into the next stage.

But to anyone listening in, next year. The crisis has long as it existed. The time is now. And so I am pleading with anyone, answer the call. Vote I today, of course, and let's get this done this year and keep post production and visual effects jobs in the state of California. Thank you, Mister Chair. Thank you, and visual effects jobs in the state of California. Thank you, Mister Chair.

Well, again, I thank the author. We will now do we have a motion? So moved. Mister Grayson has moved the bill and we will now take the vote.

The motion is do passed as amended to the committee on appropriation. [Roll Call]. 3-0.

To do, the bill is now on call. I thank the author. Thank you all, David.

Thank you for your testimony.

Thank you, Hailey.

The next author we have, is Assembly member and, Chair of the Assembly Rev and Tax committee. Oh, McKinnor? Yeah. Have they given have they given Yes. Okay.

Assemblymember Gibson is prepared to take the seat and, let McKinnor Assemblymember McKinnor go ahead. Yes. Okay. Very good. Assemblymember McKinnor, please approach the bench.

Make your case.

Thank you

for thank you for your consideration. Mister Chair, Mister Chair and members, AB 2186 fulfills an important policy goal of Republicans and Democrats to reduce taxes on hardworking Californians by eliminating tax liability on any future benefits for California residents that are descendants of formerly enslaved people. It is important to begin by highlighting the the the descendancy is a legal status that was approved by the this legislator legislature and signed into law by this governor in 2025.

The legal status is assigned to individuals who can establish direct lineage to a person who, prior to 1900, was subject to American shadow slavery. The legal status is not based on race and does not violate prop two zero nine.

Rather, the legal status is consistent with other Californians who receive public benefits because of a defined legal status including an individual's immigration status or survivor excuse me or survive survivor or descendant of a survivor of the holocaust and a role a member of a tribal nation. Members for generations, descendants of formerly enslaved people have endured systemic injustice, economic exclusion, and the denial of opportunities to build generational wealth and financial security.

To be clear, AB 2186 does not provide reparations to any Californian that is the descendants of a formerly enslaved person. And I am confident that the day will come when our federal and state governments will provide descendants of formerly enslaved people with reparations. Until then, AB 2186 ensures that any future federal, state, or local reparation benefit will not be taxed as state income.

I respectfully ask for your aye vote. And my witness here, Tanisha Herring from the NAACP California Hawaii State Conference. Thank you.

Thank you. Good morning, Chair and members. The author is writing that tax and reparations undermines their purpose. From the from our perspective on the ground, this is not abstract. The sentence of formerly enslaved people who receive these benefits are oftentimes the same communities navigating the widest wealth gaps in the State.

A tax liability on a reparations payment is not a technicality. It is a reduction in justice. California has already done the work. The task force process has produced a comprehensive record of documented harm. AB 2186 honors that record by ensuring the legislative infrastructure catches up.

A reparations program without a tax exclusion is an incomplete program. We want to highlight the bills inclusive definition of reparations benefit. By covering monetary payments, grants, trust distributions, debt forgiveness, and other financial compensation at the state, local, and federal level, AB 2186 future proves this exclusion. Whatever from reparations ultimately take, this bill ensures the protection follows. California has excluded other categories of compensation from gross income before.

Disaster relief, certain legal settlements, Federal COVID relief payments. Excluding reparations benefits is consistent with that precedent. This is not novel. This is principle. The five year window through 2023 2033 is reasonable and gives the legislature time to evaluate and extend.

We would encourage members to view this as a floor and not a ceiling as reparations programs develop develop. The NAACP California Hawaii strongly urges your aye vote. Thank you.

Well, I thank the witness for your testimony. Are there any members of the public that wish to voice their support for this bill? If so, please give your name and your affiliation only.

Good morning. Jim Lindberg. On behalf of the Friends Committee on Legislation of California, Friends have a long history of supporting reparative justice, and we support this bill. Thank you.

Thank you. Any other members of the public? Wish to offer support? Are there any leading witnesses in opposition to this, measure? Seeing none, are there any members of the public that wish to voice their opposition to this measure?

Seeing none, I will now ask if members of the committee, would like to comment. Mister Becker, you're a break.

We'd like to comment. Thank you. I wanna thank the author for this. We should absolutely pass this bill, and I really appreciate the analysis as well and kind of the history of of the different measures we've taken over time along these lines. So I'd love to move the bill when appropriate, and thank you, Belvoir.

We also have a member of the public who wish to voice opinion.

Yes. Thank you. Apologies for being late. Whitney Francis with the Western Center on Law and Poverty in Support. Thank you.

Thank you. Any other members of the committee wish to voice opinion? You recognize me?

Thank you, Mister Chair. I also wanna thank the author for coming forward. Very appropriate and very supportive of the bill and the work that you've put into this, not just this year, but multiple years building up to this. It's the right time and the right thing to do.

Well, Assemblymember McKenney, thank you for bringing this forward. It's about time that we put this in front of our committee and and see if we can move this forward. Reparation payments compensate for specific harms and injuries and persons who have suffered discrimination throughout history, and there's an extensive list of that. This bill ensures that California does not erode the value of reparations by taxing payments, meant to provide reparative justice. I am supporting this bill.

Senate member mckinnon would you like to close?

I respectfully ask for your aye vote. Thank you.

Very nice closing. Thank you. And we have a motion. Would we please take the vote?

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

Aye.

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

Grayson? Aye. Grayson, aye. Three zero.

So do we go next? The bill is now on call. Thank you.

So do we go next? The bill is now on call. Thank you.

I wanna give the room a minute to quiet down so that we can hear each other. So every time we open the door, it's hard for us to understand what's going on here in the committee.

So I'd like to minimize the amount of door openings during hearing. Assemblymember Erwin, would you like to come and present your bill? It's the way the system works. You present when you're ready.

Thank you. Good morning, Mister Chair and Senator. Sorry I wasn't here earlier, but I presented four bills already. So I would like to begin by accepting the committee amendments to provide CDTFA with greater enforcement authority. I'm pleased to present AB 762, which would ban the sale of disposable nicotine vapes in California.

Unfortunately, these disposable devices are incredibly popular and have become an accessory for bars, restaurants, workplaces, and in our children's backpacks. They often, resemble mundane objects like pens, but a new trend is emerging to include elaborate screens and buttons to play classic games manufacturer designs them for, which is the trash can. With designs that prevent refilling of vape liquid and recharging the lithium battery, these devices have an intended lifespan of about a week. You may be thinking, why is this so bad?

Plenty of consumer items are meant to be thrown away.

The answer is simple. Lithium batteries and vapes are highly flammable. They cannot easily be removed, so they pose costly and hazardous safety issues at every point in the waste stream. Marketed as disposable and without a robust EPR program for these devices, they are thrown in the trash and sent to material recovery facilities and trash and sent to material recovery facilities and landfills where they ignite and catch entire garbage trucks and recycling facilities on fire, putting facility operators at risk.

Local governments and our constituents end up shouldering the cost of extinguishing and cleaning up the dangerous battery flyers and paralleling and paralleling our firefighters and first responders.

We must be clear that by allowing these devices to be sold and thrown away, we are putting our first responders directly in danger. This is not a problem without a readily available solution on the market. Right now, there are 40 FDA authorized reusable vapes available for purchase that are refillable and rechargeable. Despite the fact that disposable vapes contain a battery that is capable of 700 recharges, they are often thrown away after one battery cycle because the manufacturer omitted a charging port.

We do not throw away our phones or our laptops after one week of use, and we should not treat other lithium devices any differently.

A B 762 has strong enforcement mechanisms to deter the sale of disposable vapes before consumers have the chance to purchase them in the store. And I would like to talk for a second about the illicit market and the argument that this bill will expand it. When consumers have a clear preference for a substance, they look at the illicit market. This is the case for flavored vapes. With single versus rechargeable vapes, there is a clear and accessible substitute.

We are not going to see consumers choosing to seek out illicit dealers to obtain a disposable vape over walking into a retailer to get a refill of their rechargeable vape, making it very unlikely to expand the illicit market. A study in The UK showed that prior to a disposable vape ban being enacted, consumers shifted to reusable models, reducing use of disposables from 63% to 35%. This past summer, The UK banned disposable vapes.

Since then, Elf Bar, one of the largest manufacturers, has put out data that 85% of the consumers easily pivoted to reusable devices. This bill keeps these devices out of the trash can and out of the hands of our children.

With me to testify in support of the bill are John Kennedy representing the rural counties and Nick Lapis with Californians Against Waste. Oh, yes. K.

Each witness will be allowed two minutes. Please proceed.

Good morning, members. Nick Lapis with Californians Against Waste, a proud cosponsor of this bill. It's not exaggerating to say that the vape crisis, the growing vape crisis, is posing an existential threat to our waste and recycling system. Over 12,000,000 disposable vapes are sold nationally every single month, which breaks down to six vapes per second. Even if managed responsibly, this is a staggering waste of the finite natural resources that go into making them.

But the fact is they aren't managed responsibly. A recent down study found that 88 of users reported disposing of them in the trash, recycling, or littering them. The batteries in these devices ignite fires at temperatures exceeding 1,200 degrees Celsius, fires that our waste system cannot handle. A recent study in The UK found a 77% increase in waste fires attributed to vapes, and we're seeing similar numbers in The US.

The consequences of these fires are enormous, and it is ratepayers that absorb these costs with higher garbage rates and tax taxpayer funded cleanups.

There was a recent example from one of our cosponsors in Senator Becker's district who operates a recycling facility. They had a massive fire in 2017 that burned down the facility. It cost $8,500,000 worth of damage. ALMOST MORE IMPORTANTLY THAN THAT, THEIR INSURANCE FOR THEIR FACILITY WENT FROM $180,000 A YEAR TO MORE THAN $3,500,000 AND THEY HAD TO SPUT THAT OVER 17 DIFFERENT INSUURORS. They were told if they have another similar facility, they're not going to get insurance at all.

Since that fire, they've had 131 smaller fires, to give you a sense of the scale of the problem. This is one facility in the Bay Area. Beyond the financial impacts, both the workers in these facilities and the firefighters that respond to the fires put their lives at risk every time one of these fires occurs, and the environmental toll isn't limited to the impact of the fires.

The disposable vapes leach heavy metals and other toxics into our water and soil, and the wasted resources in their batteries could power over 3,300 electric vehicles. The opposition has argued that this will fuel black market akin to alcohol prohibition, but that is both illogical and empirically untrue.

The bill does not ban nicotine. It doesn't ban vapes. AB 762 gets rid of an inherently hazardous, wasteful, and completely unnecessary product that has a commonly available reusable alternative. Each of the six disposal vapes that get thrown away every second is a ticking time bomb that could be easily prevented. Thank you.

Good morning. John Kennedy with RCRC on behalf of our 40 member counties. As local governments, we're charged with solid waste and hazardous waste management collection and disposal. Not just our counties, but local governments in general across the state run about 200 household hazardous waste collection facilities, where we try to offer free opportunities to take hazardous materials back from residents households, free of charge, and then also opt for opportunities for very small quantity generators.

We're here to support AB 762 today because we think it significantly reduces our costs and challenges with management of this management and disposable disposal, excuse me, of single use vapes.

In doing so, we can significantly increase our collection and disposal opportunities for residents to safely get rid of their product. From the management perspective, there are a number of challenges. Fires are just one of the challenges. Local governments are seeing more and more and more vapes in our facilities. They're extremely expensive for us to manage and dispose.

It cost us about $350 to manage one five gallon bucket of vapes that may contain somewhere between a 150 to 200 vapes. The challenge and the cost driver is the nicotine cartridge in that vape device. If we're able to separate separate and, separately manage and dispose of the cartridge from the rest of the device, we can significantly reduce our cost. The cartridge is tiny. The device is large.

We can get far more cartridges in that five gallon bucket. Again, we're not banning the product, just one form of the existing challenging delivery device, and shifting to a much more sustainable and recyclable delivery system, where we can actually recover some of the lithium ion batteries, and circuitry that's in those devices. With respect to the illicit market, you're gonna hear comments and concerns, about shifting folks to the illicit market.

Aye, as our organization, would be very, very interested in trying to combat the illicit market, increase enforcement, increase penalties, would welcome the opportunity to work with opponents and others to achieve those objectives. And just briefly, a couple other things.

EPR, as a system, works for a lot of products. It's not ideal for vapes, because nicotine is acutely hazardous, and that presents a lot of challenges for the PRO to manage through an EPR program. With respect to cannabis, which isn't part of this, cannabis vapes are much easier for us as facilities to manage as e waste, because Could

you please wrap up your testimony?

The cannabis cartridge is not considered hazardous. So for those reasons, we strongly support a v seven sixty two and urge your eye vote today.

I think the witnesses, the major witnesses, or any member members of the public wish to voice their support for AB 762, please just your name and your affiliation.

Jim Lindberg, Friends Committee on Legislation of California in support. Thank you.

Good morning. Leila Romero on behalf of the League of California Cities in strong support. Thank you.

Thank you.

And Aranda, on behalf of the County of San Mateo in strong support.

Thank you. Tony Hackett on behalf of Californians Against Waste as well as registering support from Waste Management, American Nurses Association, the City and County of San Francisco, City and County of Sacramento, City of Long Beach, the Coimbatore Beautiful Tobacco Education Research Oversight Committee, Rural Counties Environmental Services Joint Powers Authority, California State PTA, Physicians for Social Responsibility Los Angeles, Los Angeles City and County Departments of Sanitation and the Environment, Placer County Board of Supervisors, and Republic Services.

Good morning. Keeley Morris on behalf of the Los Angeles County Sanitation Districts in support.

Good morning, Mister Chair and members. Dylan Hoffman on behalf of the California Product Stewardship Council, a proud cosponsor, the Solid Waste Association of North America's legislative task force, Alameda StopWaste, and the following organizations, Yuba County, Sutter County, Yuba Sutter Integrated Waste Management Authority, Beyond Plastics, Community Environmental Council, the National Stewardship Action Council, Cleaning Earth for Kids, Sustainable Works, Monterey Waterkeeper, Active San Gabriel Valley, and Global Alliance for incinerator alternatives, all in support. Thank you. Great.

Good morning. Jack Worson from NOSMEN on behalf of the County Of Monterey in support.

Good morning. Carrie Baxter on behalf of the Yuba Sutter County Regional Waste Management Authority. We're full support. Good morning. Julie Lachesky on behalf of Zero Waste Sonoma Joint Powers Authority, Zero Waste Marin Joint Powers Authority, Environmental Action Committee of West Marin, California Public Interest Research Group, Clean Water Action, CR and R Environmental Services, Parents Gifts Faping, Plastic Pollution Coalition, The Last Classic Straw, Families Advocating for Chemical and Toxic Safety, Breathe Southern California, and Americans for Non Smokers' Rights. Thank you.

Good morning. Jake Schultz on behalf of the Yosemite Rivers Alliance, three fifty Bay Area Action, three fifty Contra Costa Action, three fifty Ventura County Climate Hub, Los Angeles City Department of Sanitation, Los San Luis Obispo Integrated Waste Management Authority, California Communities Against Toxics, Napa Waste and Recycling Services, Just Zero, San Francisco Baykeeper, The Story of Stuff Project, LA Waterkeeper, and the Endangered Habitats League in support. Thank you.

Good morning, and thank you for your indulgence. Danielle Lynch on behalf of Heal the Bay, California League of United Latin American Citizens, Central Contra Costa County Solid Waste Authority, Salinas Valley Solid Waste Authority, Central Contra Costa Sanitary District, Tehama County solid waste management agency, Western Placer waste management authority, Regen Monterey, Merced County regional waste authority, city of Arcadia, smoke free air for everyone, and Linda G Swan, council member, city of Los Altos Hills. Thank you.

Mandy Strela, on behalf of rethink waste, as well as Santa Barbara County Division of Resource Recovery and Waste Management, Environmental Protection Information Center, Green Science Policy Institute, Oceanic Preservation Society, Save Our Shores, Zero Waste San Diego, Pacific Beach Coalition, Sunrise Movement California, Save the Bay, Cal Poly Center for Health Research, Alliance of Nurses for a Healthy Environment, Bay Area Student Activists, and Oakland Recycles. Thank you.

Good morning. Isabelle Farrand on behalf of Mojave Desert and Mountain Recycling Authority, GPA, National Association of Environmental Medicine, Nontoxic Neighborhoods, San Luis Obispo County Tobacco Control Coalition, Santa Cruz County Tobacco Education Coalition, Southern California Public Health Association, Tobacco Prevention Coalition of Contra Costa County, Del Norte Waste Management Authority, Castro Valley Sanitation District, UBIS Saturday Recycles, and then lastly, Southern California Public Health Association in support. Thank you.

Morning, Chair. Noah Melra on behalf of Action on Smoke and Health, Alameda County Tobacco Control Coalition, Algalita Marine Research and Education, American Sustainable Business Network, Association of California Health Care Districts, Azul Bay Area Pollution Prevention Group, California Health Coalition Advocacy, California California Nurses for Environmental Health and Justice, Children Now, Encourage California, Defender Health, and Seventh Generation Advisors in support. Thank you.

Good morning, Chair and members. Caitlin Leventhal on behalf of the California State Association of Counties in support. Thank you.

Good morning. Isha Ayur on behalf of the City of Mountain View and the City of Thousand Oaks in support. Thank you.

Good morning, Chair and members. Connor Guston on behalf of Teamsters California and our members who work in these facilities in support. Thank you.

Good morning. Mister Chair, Jeeten Hurst here today on behalf of the Santa Clara County Board of Supervisors in support.

Good morning, Mister Chair and members. Karen Lang on behalf of the boards of supervisors of Humboldt and Marin and the city and county of San Francisco Board of Supervisors all in support. Thank you.

Chair member, Jael Dentes on behalf of the alameda County Board of Supervisors in support.

Good morning, Mister Chair. Doug Soopers on behalf of the California Professional Firefighters in support.

I think any other members of the public wish to voice their support. Are there any, lead witnesses in opposition? You can take a Chair if you wish. Thank you. Thank you.

Very good. Okay. Now you can proceed.

Chair and members, thank you. Alessandra Briquette on behalf of the California Fuels Convenience Alliance. This committee is being asked to eliminate one of the only disposable vape products that's actually regulated, taxed, and sold through licensed retailers. That may sound like it advances the bill's goal, but in practice, it does the opposite. California's disposable vape market is already dominated by illegal products.

The devices creating the environmental problems this bill seeks to address are overwhelmingly entering through the illicit channels, not through retailers complying with California law. In fact, there is only one FDA authorized disposable vape and only a handful of disposable products that can be legally sold in California today. The other FDA authorized vapes previously mentioned are flavored, so they are not allowed in California. The products allowed here are federally reviewed, state regulated, and generate tax revenue.

A B 762 removes the legal market, but it leaves the illegal market intact.

We've seen this play out before. The United Kingdom banned disposable vapes to reduce battery fire waste and fires. Instead, battery fires reached record highs because consumers simply shifted to larger refillable devices that were thrown away in the same manner. The legal product disappeared, but the environmental problem remained. And Belgium and Australia experienced similar growth in illicit sales after adopting comparable restrictions.

That's the fundamental flaw in this bill. It assumes eliminating the legal market eliminates the problem. It doesn't. AB 762 doesn't reduce the illicit market. It rewards it.

Every legal sale eliminated is simply another opportunity for untaxed illegal products to take its place. That means more products sold outside California's regulatory system, fewer sales through licensed retailers, and no meaningful progress towards the bill's environmental goals. If the legislature truly wants to reduce environmental impacts, the answer is stronger enforcement against illegal imports and illegal sellers, not banning one of the few products that is already regulated. For these reasons, we respectfully ask for your no vote.

Good morning. My name is Nate Gergich. I'm a lieutenant with the Sacramento County Sheriff's Office. I respectfully request that you vote no today on AB 762. Let me begin by saying that I understand that the bill is attempting to accomplish.

We all share a goal of keeping, unsafe and unregulated vaping products out of our communities and away from our youth. However, the vast majority of the disposable vape products causing concern today are already illegal. Many of these products are imported from overseas without proper testing, regulation, or authorization. They they violate existing federal and state laws, and in many cases, local ordinance as well. The issue is not a lack of laws prohibiting these products.

The issue is a lack of resources effectively in to enforce the laws that already exist. As a law enforcement professional, I can tell you that the illegal products continue to enter our communities because there are simply not enough enforcement resources dedicated to identifying, investigating, and removing them from our marketplace. Our agency has conducted numerous enforcement operations involving the sale of illicit vaping products.

During those operations, we have repeatedly encountered products being sold outside of California regulatory framework, including products that were prohibited, untested, and properly labeled, and from an an unknown origin. Law enforcement agency also have encountered vaping products that contained substances other than what was, represented to the consumer, creating significant public concerns and overdoses on fentanyl.

That is my concern with AB 762. The bill does not address criminal networks already operating outside of existing law. The products creating, the greatest risk to public safety are already prohibited. Criminal organization illicit illicit distributors and overseas manufacturers do not comply with California regulations, testing requirements, age restrictions, or product bans. Passing an additional prohibition on products that already are illegal does not impact those bad actors.

In effect, we would be passing a second law to address a problem that stems from an insufficient ability to do the first. Law enforcement agencies across California are already operating with limited personnel, increasing demands. Rather than creating additional bans, we would encourage legislative bodies to invest in enforcement efforts, investigations, interdiction operations, and compliance efforts that target illegal products already flooding into our communities. I respectfully request you vote no on AB 762. Thank you.

Thank you so much for your testimony. Any members of the public that would like to add on in opposition, your name, affiliation, and position, please? Dennis Sloper for the California Distributors Association in opposition. Any other members? Yes.

Please approach the mic.

Gracie Gonzalez on behalf of California's Business Roundtable, the California Hispanic Chamber, and the API Chamber. All in opposition. Thank you.

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

Jasmine Advantcula with the Cal Asian Chamber in opposition. Thank you.

Leticia Garcia with the California Retailers Association in opposition.

Thank you very much. Any additional members of the public to add on in opposition? Seeing none, we will bring it back to the committee. Senator Becker, you're recognized.

As a committee member president, I'll go first. First of all, I wanna thank the author. I I I hear the concerns of the opposition and, you know, respect those concerns, and I I know you'll continue to work going forward to think about those issues. I will be supporting the bill today. Rethink Waste is one of the cosponsors, and that's a joint powers authority formed by 11 local governments in San Mateo County.

They own the Shoreway Environmental Center in San Carlos, which receives all recyclables, green waste, and garbage collected from 420,000 residents and 11,000 businesses as mentioned. There was a battery started a four alarm fire that closed down the facility for over three months, resulted in 8 and a half million dollars in damages, as well as employee furloughs damages to equipment, increases insurance costs that were mentioned. But from 2017 to 2025, there have been a 131 fires at Shoreway.

We believe that this bill will and they believe that it will really help materially increase safety in in material recovery facilities and help protect the health and job of employees who work in these facilities, as well as prevent the need to raise rates on ratepayers. So I have just a tremendous outpouring support from ITSA.

We heard some of that today. It's a issue that needs to be addressed. Again, respect the the concerns going forward. We don't wanna, you know, as we've done in some other areas, close down the legal market, help the illegal market. We have to find ways to do that.

We have to find resources for enforcement, as was mentioned. But this is an important bill, and I'll be supporting it today. Thank you.

Thank you, Senator. And I would also just to clarify some things that were said. I believe one of the witnesses had made a statement in testimony that they're not banning the product. Is this banning the product or not banning the product?

This is you're we're not banning the nicotine. We're banning one specific product that is, disposable. There are 40 FDA approved devices that could be used with nicotine. So it's one product. And again, if you we're trying to limit lithium ion batteries as much as possible.

And if you have something that has a shelf life of one week, it is a vast amount of there there are a vast amount of lithium batteries that are going into the waste stream, and and that's what really what is causing the danger. And then I also want to address the illicit market. Obviously, that's a that's a huge issue, but it is for a lot of it is flavored vapes, which are actually banned. And and in this case, again, there is an alternative product.

We also thank you to the committee, strengthen the enforcement.

So for CDTFA, they have the authority to seize confiscated disposable vapes, a 50 fine for each recovered vape, and action with the tobacco, license suspension for the second violation. And then, there is additional enforcement, in AB 762, which is, financial the counties and cities, 500 for the first violation, 1,000 for the second, and 2,000 for the third.

But I do think that, the, it is really important that the state continue to provide resources to law enforcement to fight the illicit market that was done a few, years ago under the wood bill, but it is, you know, it it is, definitely a concern. But we don't see at all that this increases the illicit market because they're readily available products that are just, reusable instead of disposable.

Thank you, Assembly member. I and then speaking of the illicit market, I think we all agree there is an illicit market. But, having, understanding that, what percentage are you really talking about here of the market would this bill actually impact?

It's this is worth thinking it's 10% of the the market, but I don't know if you have

Yeah. A quick answer. I I think that's What percentage? About 10%? We do

think this will allow us to go after everybody as well because the enforcement policies would apply to the illicit products as well. It'll be easier to tell for enforcement agencies if it's disposable, it's illegal.

Right.

So even though the 10% is legal, it would be enforcement against the 100%.

Okay. And have you been having conversations with the opposition working with them? I know the bill has a couple of more stops to go before it reaches the house or the

Well, I think that that was part of the reason that the committee added additional enforcement provisions.

Okay. Would just wanna clarify that the committee let me see here. Are you accepting the committee amendments to add c d TFA enforcement?

Yes.

Okay. Perfect. With that, I'm by myself up here, so there's no humor in the room whatsoever. You all are asleep by now. I would encourage and continue working with opposition on this.

Obviously, this is a safety issue that we're dealing with as far as waste, but then also it's a product that needs to be addressed and regulated, especially if there is this push toward the illicit market. However, I think we're taking enforcement measures to deal with that as well. With that, I'll I'll I'll let you please, would you like to close?

Disrespectfully ask for your aye vote and everybody else that is absent, their I votes, maybe they're watching on TV

or Oh, okay. Then I will vote. Can I make the motion? I cannot make the motion, so I'm gonna have to wait for a motion. I can't even vote.

Sorry. Alright. Assembly member, as soon as members return, we'll get a motion and take a vote on the on the bill. Thank you

very much for your attention.

Alright. Thank you so very much. We do have another author in the room. Assemblymember Gibson. Are you ready?

As expected. You have two bills with us today, item number seven, AB 1519, and item number eight, AB 2172. Would you like to start with item seven, AB 1519?

Yes, please. Thank you very much.

Alright. When you're ready, please go ahead.

Thank you very much, Mister chairman. And Mister chairman, thank you for allowing me to present, Assembly bill 1519. While the tax administration can be complicated, the concept of statute of of statute of limitation is simple.

For centuries, the legal code has recognized that lawful claims must be for must have, expiration dates providing, certainty and predictability in for individuals in society without a statute of limitations on tax collection and taxpayers' lives for their entire life under the shadows of potential, collections, actions for liabilities covered for decades earlier. Recording records would be lost.

Memories would fade, and the systems would be unworkable. For many years, no statute of limitations exist on the collections of on their income or franchise delinquencies for at the state level. However, beginning in 2006, a statute of limitations for FTB collections actions went in effect. Despite the two the twenty years of statute of limitations beginning codified in anytime the FTB imposes a fee, penalties, or interest. Under the uncut excuse me.

This undercuts the whole point of having the statute of limitations. Assembly bill 1519 provides that once the underlying tax liability becomes due and payable, the the the statute of limitations period begins to run and the subsequent fees and charges do not reset the clock. And that's important to point out. So Assembly Bill 1519 provides once the underlying I wanna pre provides the underlying the liability becomes due and payable.

This the liability period begins to run out and the subsequent fees charges do not reset the clock. Plainly put, this bill would create an actual 20 year statute of limitations, not one that the FTB can, unilaterally extends whenever the new fees or penalties are imposed. Assembly this bill will provide clear directions. This bill will not result in significant revenue loss to the state because these amounts are not actually collectible in any cases.

This bill is important to, one, clarify where, where people need to stand in this particular bill.

I wanna thank you very much for allowing this bill to be heard. Here with me to provide supporting testimony is a representative is the Chair of the California CPA Tax Committee and who they both will self introduce and also the California Society of a Role Agent. Both will be testifying in support of this bill and both will self identify.

Thank you, Assemblymember. Two minutes each.

My name is Andy Mattson. I'm a California CPA with Baker Tilly in San Jose, and I am Chair of Cal CPA's Committee on Taxation. AB 1519 makes a simple but important clarification for California's 20 year statute of limitations on tax collections. When the legislature established that statute in 2006, the intent was to provide taxpayers with certainty that there would eventually be an endpoint to collection activity.

Unfortunately, ambiguity in current law allows, certain fees, penalties, interest, and collection related charges to effectively restart the 20 year clock, extending collection activity far beyond what was originally intended.

As practitioners, we help taxpayers resolve liabilities, evaluate payment options, and return to compliance. This requires clear and predictable rules. For example, a taxpayer may discover a decades old tax liability while settling a family estate or handling another significant financial matter. They reasonably expect that California's 20 year statute of limitations means there is a clear endpoint to collection activity. Instead, under current law, collection related fees or similar charges can effectively reset the clock and extend collection efforts to the same underlying liability.

That outcome is difficult for taxpayers to understand and and undermines the the certainty and finality that a statute of limitations is intended to provide. AB 1519 does not forgive taxes. It doesn't change how the FTB calculates an under underlying liability, and it does not limit the FTB's ability to collect legitimate tax debts. It simply clarifies that the twenty year limitation statute of limitations period is tied to the underlying tax liability and cannot be indefinitely extended through subsequent fees, penalties, or collection charges.

This restores the original intent of the law, improves certainty for taxpayers and practitioners, and strengthens confidence in California's tax system.

For this reason, we respectfully ask for your support for AB 1519. Thank you.

Thank you so much. Next witness, two minutes.

Good morning, share and members. Jennifer Tannehill with Aaron Reed and Associates on behalf of the California Society of Enrolled Agents. CSEA is pleased that the legislature, FTB, and stakeholders worked on the solution to provide certainty to taxpayers while continuing to allow an extended window for FTB to collect. I just wanna note a couple of items. The definition of tax in this bill relates only to the specific section of code and does not affect the definition of tax elsewhere.

Also of note, the IRS is allowed 10 years to collect tax liabilities where California affords the FTB 20 years to collect. So we just are pleased with the solution, and we ask for your aye vote. Thank you.

Thank you so very much for your timely testimony. Members of the public that would like to add on in support, please approach the mic. Seeing no one moving, I don't believe we have lead opposition witnesses with this. Anyone in the public in opposition seeing no one moving? I'll bring it back to committee.

Again, here I am. AB 1519 strengthens taxpayer protections by ensuring that once a tax liability expires, related penalties and fees due to good work to the author. And with that, would you like to close?

Respectfully ask for an aye vote.

Thank you so much. When we get to a point where we can get a motion and a vote, we'll do that. If you would like to move on to the next item on our list, item number eight, AB 2172. You may begin when you're ready.

Thank you very much, Mr. Chairman and Members. Assembly Bill 2172 provides counties with the particular temporary tools to address the growing backlog in complex tax appeals. Under the current law, all appeals must be heard by the multi member board, an approach that supports transparency, but often creates schedule challenges and delays, especially for multi day cases involving hotels, stadiums, and other complex properties.

These cases require extensive testimonies, details, financial analysis, and significant coordinations among board members, parties, and counseling, which can push results, resolutions beyond six months and often more than one year. Data from the past three fiscal years show that many assess appeals takes longer than six months and often over a year to resolve, indicating a backlog in the system.

Assembly Bill 2172 allow counties to instead use a single qualified assessment appeals commission as a neutral decision making in these complex cases. Importantly, it provides the right the rights of parties to request a traditional multi member board. This measured approach improves efficiency and reduce delays while maintaining a fair, consistent, and due process protections for taxpayers. To testifying in support is Assessor Joaquin Torres, who will, thank you very much, who will be here to testify in support of AB 2172.

We look forward to your testimony. Two minutes.

Thank you so much. Good morning, Committee Members. Thank you for the opportunity to present our support for Assembly Bill 2172. My name is Joaquín Torres, and I'm here on behalf of the California Assessors Association in support of this bill and on behalf of Los Angeles County Assessor, Jeff Prang, the sponsor of the bill. AB 2172 is a practical modernization of California's property tax assessment appeal system.

Large counties are facing a growing reality. The current appeal structure was designed for a much smaller workload and is no longer equipped to handle the volume and complexity of the appeals that we are seeing today. In LA County alone, there are now approximately 40,000 pending appeals, roughly double the pre pandemic volume.

These are often complex cases involving significant financial stakes, yet counties must manage them through a system that relies largely on part time board members meeting on limited schedules. The result is delays for taxpayers, significant refund interest costs for counties, and a growing strain on local government resources.

This provides a sensible solution. The bill would allow large counties through a limited pilot program to use a single member full time assessment appeals commissioner, as you just heard, to hear certain appeals. It's not a mandate. It does not eliminate existing assessment appeals boards. It simply gives counties another tool to manage growing caseloads, improve efficiency, and reduce delays.

Just as importantly, this bill preserves taxpayer rights and due process. Taxpayers may still request to have their appeal heard by a traditional three or five member board, and the bill includes safeguards to ensure transparency, consistency, and accountability in that process. Simply put, this recognizes, this bill recognizes that a system built for a different era needs a modern tool to keep up with today's workload while preserving fairness for taxpayers. For these reasons, we respectfully ask for your aye vote on Assembly Bill 2172.

I think that the author and the witness, do we have any members of the public that wish to, voice their support? If so, please approach the microphone. Seeing none, do we have any lead witnesses in opposition? Seeing none, do we have any members of the public that wish to op voice their opposition? Seeing none, I will now turn to members of the committee for comments.

Make a motion.

Okay. Thank you.

The comment is that, Senator Grayson wishes to make a motion. Senator, I mean, Chair Gipson, it's always a pleasure to work with you, as a sort of a a partner on tax issues. And it's always important to make sure that the tax runs, quick, officially and and fairly. I think that's a an important, task for all of us. This is an approach we're trying.

I wish the assessor praying the best with your board of supervisors to implement it. Good luck. I'm happy to support your bill. Would you like to close?

Thank you very much. I want to thank assessor praying and also, Mr. Torres for my witness for being here, today on such short notice, while Sessa Praying is mending, and healing back home. This is a a simple bill. We're trying to fix a complex problem. As as I testified, multi members trying to get together with a very complex schedule.

This is a simple fix. I'm trying to move and address the backlog in the system. Respectfully ask when I vote.

Well, we have a motion. Would the secretary please call the vote?

The motion is do passed to the committee on appropriations. [Roll Call] 2-0.

Thank you. Thank you.

Please sit down and make your case. Thank you, Mr. Chair.

It's the most important thing of the morning. I'd like to begin with AB 2222, if that's okay?

Great. Alright. Well, thank you again, Mister Chair and members. I also want to thank the committee and staff for working with my office in crafting this bill. I will, of course, be accepting the committee amendments.

Yes.

So today, local journalism is under attack from every direction. Newsrooms across California are shrinking, reporters are being laid off, community newspapers are closing, and trusted local voices are disappearing. At the same time, we are witnessing increasing political attacks on a free and independent press with efforts to undermine journalists, discredit credible reporting, and weaken the institutions that hold power accountable. When a newsroom closes, communities lose more than just headlines. They lose watchdogs, transparency, and access to reliable local information.

Local journal - excuse me, local journalists are often the only people attending city council meetings, school board meetings, and covering the issue, issues that directly affect Californians. So, AB 2222 is about investing in that public good. The bill establishes a targeted temporary tax credit to help local news organizations retain existing journalists, hire new reporters, and expand local coverage across California.

The latest amendments further strengthen the measure by expanding support to part time journalists, recognizing sole proprietors who operate local news outlets, and ensure that the credit reaches a broad range of local print, digital broadcast, and non profit news organizations that serve California communities.

The bill also includes a strong accountability measure. Eligible organizations must publicly disclose ownership of governance, maintain correct... maintain corrections policies, carry media liability insurance, and cannot be controlled by political organizations or 501 c4 advocacy groups. These safeguards ensure that taxpayer dollars support independent community focused journalism, not political propaganda. At a time when misinformation is spreading and trusted local news is disappearing, California has an opportunity to invest in one of the cornerstones of our democracy.

With me to speak in support of the Community News Act, we have Jeff Knox, from, TTWN in San Francisco representing SAG-AFTRA and former Senator Steve Glazer.

Thank you, Mister Chair and members, for the opportunity to speak today. My name is Jeff Knox. I'm a member of SAG-AFTRA's NorCal Local Board. I'm here on behalf of my union's a 160,000 members, many of whom are broadcasters like myself and who know firsthand the importance of quality journalism to a healthy society. Right now, situation is dire.

Last year, Congress eliminated over a billion dollars in funding for the corporation for public broadcasting, decimating available grants for local PBS and NPR affiliates. These cuts have prompted severe job losses at stations across the country, leaving many outlets, including those in California, scrambling for alternative funding. Broadcasters chose this business because we want to serve our community. We understand the importance of unbiased access to information.

And sadly, the corporate dominated media space is becoming increasingly hostile to local journalists and our ability to keep our communities informed and our livelihood sustained.

Complicating things further is the harm wrought by AI technology and its ability to churn out unreliable and polarizing slop that diverts traffic away from the work of real journalists. Lawmakers need to step in and make the policy changes necessary to ensure continued access to the journalism that keeps our democracy thriving. Assemblymember Ward's AB 2222 is urgently needed. It makes funding available to incentivize the hiring of professional journalists.

It's a game changing plan that's all about giving the power of information back to the people.

A $20,000 job retention credit to those who hire journalists is about keeping Californians armed with access to human-made news coverage. This is about preserving the economic viability for outlets of all sizes and preserving Californians' intellectual viability. This is about our freedom and our future. Thank you very much.

Thank you, Chair McNerney. What a treat to be back here in the capital. A different seat, but a joy and a pleasure to be here. I'm here on behalf of Rebuild Local News. It's a national, nonpartisan, nonprofit coalition developing and advancing effective public policies designed to strengthen community news and information.

You know, because I sat in the seats that you're in today, I know that part of really trying to do your job well is to have access to information, to know what's happening in your community, and you do that with your own outreach, with your own staff. But a key part of that is the storytelling that you hear from local news about what's happening, whether it's about health care issues or safety or schools or the environment or immigration.

It's the storytelling that gives you the information that allows you to try to solve problems, try to make your communities a better place. And it has been said, independent news is in crisis. More than a third of outlets have closed in the last two decades.

More than two-thirds of journalists have lost their jobs. And a key question that this bill tries to address is that what's the role of government in a place in which news wants to have a separation, a distance because they over they they they report on what what you and we do. But but this bill, Assembly bill 2222, does exactly the does it in exactly the right way through a tax credit.

Just as you provided a tax credit for Hollywood, you don't decide what movies get made or shows get made. This bill is done in a way that's that's, ownership neutral, platform neutral, content neutral.

Some of you have heard me say that, you know, there is more than 2,000 registered lobbyists here in Sacramento, but few of them have democracy on their client list. Measures like this don't have the power players that typically occupy a room like this. But we know that independent news gathering and reporting is the infrastructure of a democracy. Community news equips you, the people's representative, to do your best work.

And with that, I urge a yes vote on Assembly bill 2222 and thank our wonderful champion author, Assemblymember Gibson. Gibson Ward. Excuse me.

I think the witnesses have some comments about that later. Are there any members of the public that wish to offer their support? Thank you. Are there any lead witnesses in opposition? Seeing none. Are there any members of the public that wish to voice their opposition?

Seeing none. I will turn to members of the committee for comments. Senator Grayson, you're recognized?

Mister Chair, thank you very much. And to Assemblymember Ward, one of the greatest compliments I ever had in this building was when I was called Assemblymember Ward. Yes. So, having said that, just a clarification on a qualified journalist.

If I understand it correctly, according to the bill analysis, the qualified journalist would be one that is working for a - that is a network or a news agency?

I believe so too. I know that we're taking a clarifying amendment, of course, to point out that a qualified journalist would reside in the state, would be a resident of the state.

Right. I think it's on page four of the of the analysis. I'm just clarifying just to double check and make sure from you as the author that that is -

That is the intent of that.

That is the intent.

We'll double check on that and if that that is confusing. That's a part-time journalist for qualifying part time. Does it have a minimum number of hours?

Okay. Mid page. Just check on it for me.

We will check on that.

It's important for me because you just I think you used the, one of the witnesses here, used the word multiple times: quality. And that's what I know you aspire for, and that's quality journalism. And so that's important to me to make sure that we're getting the right information, and exactly what you're trying to accomplish, and making sure that the biases are not in there. They're literally laying out the truth, and accurate information. I also wanna just thank my predecessor, for his great work on this.

This is a passion of his, which excites me and makes me wanna vote for it. Alright. So, with that, I will be supportive of the bill and my predecessor as well. Thank you, Assemblymember, for your good work.

Thanks, Senator.

Well, okay. I think the, the author, maybe somebody will have the honor of being called the Assemblymember Ward.

We'll work on it.

And I wanna thank my predecessor here as Chair, past Chair of the Revenue and Tax Committee, for your dedication to this issue. This is important. In my district, there's a big desert of journalistic independence and it's it's had an effect. There's sort of sloppy issues coming forward and not altogether truthful or verifiable and it's it's been harmful to our to our community. So, I appreciate this.

And it's clear that, journalism isn't in decline. A lot of reasons beside behind this, I think, automation and, artificial intelligence are are gonna be making it even more difficult. So, we need to take whatever steps we can. And I wanna just put for the record, Assemblymember, are you accepting the committee amendments? Yes.

Thank you. Okay. I will be supporting the bill. Do I have a motion? Oh, Assemblymember, would you like to close before I call for a motion?

I would just say, again, thank you for your time and consideration and all the hard work on this bill. Ultimately, this is both a jobs bill and a democracy bill. We are witnessing in real time the closure of stations that serve broad regions of our state with that trusted local news.

Others just up and down the state are struggling to meet their budgets, and so we know this will go a long way to help level some of the financial challenges that we're having right now, keep them afloat while we weather some of the, you know, macro and external forces that are coming at them from, you know, definitely outside of the state.

We wanna make sure that all that we grew up and enjoyed with and the the reliability that we have in these stations, not just for, of course, for, local, programming, but also, I think, enjoyment and entertainment and family and kids.

There's just a multitude of benefit that's here that I think, makes it worthy of this public investment of this tax credit. When the time is appropriate, I respectfully request your high vote. Thank you.

Did I get a motion?

A motion from Senator. Would you please call the the roll?

Motion is do passed as amended to the Committee on Appropriation. [Roll Call].

Yes, I would. And this will be brief. I wanna again wish you a good morning, Mister Chair and members. I wanna thank you for the opportunity to present AB 1723. This is, tongue in cheek, known as the California Common CENTS Act, C-E-N-T-S.

AB 1793 would legalize the symmetrical rounding of cash transactions to the nearest nickel. You all probably know well, in 2025, the US Mint was ordered to cease production of the penny, a coin which was first minted in the year 1793. Already, California businesses are experiencing penny shortages that's leading to a lot of confusion and inconsistency at the cash register. So we're following the same model. We have to update our codes, that was successfully used in Canada since 2013 when they discontinued the Canadian Penny.

Several US states have enacted policies already of symmetrical rounding up or down to the nearest 5¢ increment. Symmetrical rounding will only be applied to the total transaction price after the application of taxes and fees. Electronic or credit card transactions will be unaffected. In the absence of clear federal guidance, the bill facilitates a smooth and transparent transition for consumers and businesses alike. I wanna wanna thank the committee for your thoughtful engagement.

I know there are a number of committee members to be able to help to get the technical details right, as particularly that removes the state treasurer from the bill and allows CDTFA, to, promulgate regulations that, that such that rounding adjustments will be disregarded for the purposes of computing taxes and fees. With that, I welcome any questions you have and respectfully request your aye vote. There are no witnesses in support.

I thank the, author. Are there any members of the public that wish to, voice their support for this measure? Please approach your microphone, state your name and affiliation.

Thank you, Mister Chair. On behalf of California Fuels Convenience Alliance. Respectfully and support.

Thank you. Any other members of the public? Okay. Are there any lead witnesses in opposition? I see at least one.

Please present your case.

Let me just set a timer so I don't go over. Good morning, honorable Chair McNerney and Senator Grayson. My name is David Bullock of the SFV Alliance. While this while the Assembly member states that this shall allow for the rounding off, it actually makes it mandatory. So if I want to pay the real price or if a merchant wants to charge me the real price, they have no choice in the matter.

They have to round it up if this bill comes into play. So far, I understand why the author is considering this bill because our president, a billionaire, decided that the penny is not valuable and decided that it's better that we do not have a divisible money supply. We disagree. We understand the reason why is because of the cost of striking the penny is over $50,000,000 a year a loss to the Treasury.

But if this goes through, the losses to the indigent and poor people of California will be up to $5,600,000 a year.

Doesn't sound like much in comparison. It's only 10%, but it will matter to those who every penny counts and those who want to use cash and those who also want to maintain an honest ledger, who want to make sure that what every penny matters, if they're on the margins of margins of cost for profits, this will affect them very negatively if more of those transactions go to the negative and they have to round it off.

I wanna also say that in 2029, we will have a new president, which will be very joyful to many of you, I understand. But that new president may understand the value of the divisible money supply and may start striking pennies again. So we do not think it's honest.

I really don't wanna go to a cashless society and I know this bill doesn't do this, but it is pointing us in that way by removing one form of divisible money. So with that, we ask you to vote no. Thank you.

Thank you. Are there any members of the public that wish to voice opposition to this measure? Seeing none, I will see if members of the committee have comments. Seeing none. Well, I wanna thank the the member for your presentation.

It used to be that you'd say, can I have a penny? I'll give you a penny for your thoughts, but now it would be more like a nickel. But even that doesn't seem like much. Penny production does seem to be ending, and I don't think that's gonna be overturned, which means the state law has to make an adjustment. This bill clarifies how the rounding based cash based transaction takes place.

It's basically, we'll just clarify the process, and I wanna make sure for the, committee record, is the, is the author accepting the committee amendments?

Yes. There's a number there. I was accepting them all. Thank you.

Alright. I will be supporting your bill today. Assemblymember, would you like to close?

I appreciate your consideration. You know, at one point, we had a half penny. At one point, we had a penny. I think, you know, the value of the penny, of course, has decreased over time. Even if somebody did decide that they wanted to order them into start to reproduce it, it cost more than 4¢, for a 1¢, valuation.

So it would not make sense, to be able to come back. And of course, this bill would not implement until 07/01/2027, I think, with the committee's amendments as well. So I know it'll help merchants and customers alike because everything is gonna wash out over time. You, of course, can still use your pennies. They are legal tender.

We just know that over time and over totality, I think, all the currency out there will continue to, decline, in stock, and so we wanna be able to respond to that and update our codes. With that, I respectfully request your aye vote. Thank you.

Do we have a motion?

So moved.

Moved by Senator Grayson. Please call the roll.

Motion is do pass as amended to the committee on appropriation. [Roll Call]. 2-0?

2-0.

Thank you. Thank you.

Now, can we move forward? Is there one more?

Yes. One more, hopefully, brief one, and we're shifting over to affordable housing, with AB 2089. I wanna thank you for the opportunity to be able to present this bill and for a lot of the staff's thoughtful engagement. AB 2089 supports affordable housing access by promoting an efficient annual filing process for the Property Tax Welfare Exemption.

The welfare exemption improves project feasibility for eligible affordable housing developers, supporting long term affordability and financial stability for low income Californians. Now after the initial welfare exemption is granted for a given property, the annual filing process includes a time intensive process of collecting tenant signatures to recertify their income.

By requiring all, by requiring that all necessary forms are released by November 15 each year, the bill would ensure adequate time to complete recertification before the February 15 deadline. To modernize the filing process and reduce administrative strain, this bill would authorize the county assessor to collect verified electronic signatures. And as a witness in support, I have Tiyesha Watts from the California Housing Partnership.

Good morning, Chair and Members. My name is Tiyesha Watts with the California Housing Partnership. The partnership is a private nonprofit created by the legislature and the governor in 1988 with the mission of increasing the supply of affordable and sustainable homes through technical assistance and policy leadership. We are proud to co-sponsor AB 2089 alongside our partners at Enterprise and the California Coalition for Affordable Housing.

This bill makes three targeted common sense fixes to the welfare exemption that together protect affordable housing, reduce administrative burden, and preserve housing stability for working families across California. First, the bill extends a critical but expiring protection for non profit affordable housing developments that receive low income housing tax credits.

Under current law, if long term tenants and income rises modestly above the lower income threshold, up to a 140% of the area of medium income, their unit can still count toward the property's welfare exemption. Without this provision, that protection expires after the 2027-2028 fiscal year.

AB 2089 extends it one year to get the legislature and affordable housing advocates time to pursue a comprehensive unified solution. This matters because without the extension, non profit developers could face a sudden loss of their property exemption on units occupied by stable, rent paying long term tenants whose incomes rose only modestly.

Their practical result would be would be financial pressure on non profits to evict those tenants, the very outcome affordable housing is designed to prevent. Second, the bill modernizes an outdated administrative requirement by allowing county assessors to accept electronic signatures on welfare exemption forms, including annual tenant income verification.

Today, many counties still require physical ink signatures, creating unnecessary delays and administrative costs for nonprofit housing developers managing hundreds of units. This is a simple overdue fix. Third, the bill requires counties to release annual tenant income recertification forms by November 15 each year.

Currently, there is no deadline, and late releases leave housing providers scrambling to meet compliance deadlines through no fault of their own. This fix protects both housing providers and counties. Taken together, these three provisions protect housing stability, reduce bureaucratic burden, and keep California's welfare exemption working as the legislature intended. Thank you, and I am happy to answer any questions.

Thank the witness and the author. Are there any lead witnesses in opposition? I'm sorry. In support. Are there any members of the public wishing to offer their support?

Good morning. Graciela Castillo-Krings here on behalf of the California Housing Consortium and Enterprise Community Partners. Thank you so much for carrying the bill.

Purva Bhattacharjee with Housing California in support.

Good morning. Jenna Abbott with the California Council for Affordable Housing, proud co-sponsor of the bill and strongly in support.

Now anybody, any lead witnesses in opposition? Any members of the public wish to voice their opposition? Seeing none. I will ask Members of the Committee for their comments. Seeing none. Assembly Member Ward, thank you again for good work here. I thank witnesses. Ayesha?

Tiyesha.

Thank you. You're a strong, been a strong advocate for affordable housing. That's really important, especially these days. The bill does make three good changes that were identified by the witness, and I will be supporting your bill. Assembly Member, do you have a closing statements?

I appreciate your time this morning. Just respectfully request your aye vote.

I appreciate your patience as well. Do we have a motion? Moved by Senator Grayson. Please call the roll.

Motion is do pass to the Committee on Appropriations. [Roll Call]

The vote is 2, the vote is 2-0. The bill is on call. We now, we now have Assembly Member Haney, author, please approach the bench. Make your case, and we'll make judgment.

Alright. So this is AB 1265, Historic Building Tax Relief. I wanna thank the committee staff and you, Mr. Chair, and I will be accepting the committee amendments today. AB 1265 is the Historic Building Acts Relief Act, which will help incentivize the conversion of unused and vacant historic buildings into housing and mixed use development by providing much needed financial relief.

Across California, there are thousands of historic buildings that should be preserved or converted into housing, but these projects are often extremely costly.

They require skilled labor and custom materials, which can discourage development and leave buildings vacant and neighborhoods blighted. California has already recognized the value of preservation and conversion work through the California Historic Tax Credit, which provides a retroactive credit to completed projects that keep historic buildings alive and usable. However, that credit is set to expire at the end of the this year. Additionally, the credits were awarded on a first come first served basis, meaning tax credits were given to qualified applicants that simply submitted their applications first.

AB 1265 extends the sunset date of the historic tax credit by five years, and also prioritizes projects that preserve existing affordable housing, or convert historic buildings into housing, which ensures that the communities most impacted by vacancy and disinvestments see the greatest benefit.

By making these projects financially feasible, AB 1265 will help deliver more housing and economic opportunity for unused buildings statewide, while preserving the historic character that makes our neighborhoods unique. With me in support today is Cindy Heitzman, executive director of the California Preservation Foundation, and Jonah Hendrickson with Alameda Point redevelopors.

Thank you, Assemblyman Haney, Chairman McNerney, committee members. Thank you for the opportunity to testify today. I want to also thank the committee consultant for thoughtful work on this bill. My name is Cindy Heitzman. I'm the executive director at the California Preservation Foundation, cosponsor of the, bill along with the American Institutes of Architects California.

At its core, this bill is about preserving California's historic places, giving them new life as housing, businesses, and community assets, but it's also about economic development. Across this state, vacant and underutilized historic buildings can meet some of California's most pressing needs, but financing gaps often stand in the way. And that's where the historic tax credits come in. 38 states have historic tax credit programs. They stimulate economic

development and are proven fiscal multipliers. According to the National Trust for Historic Preservation, state's historic tax credit programs typically generate a dollar and 20¢or more in tax revenue for every dollar of credit awarded. They leverage private investment, create jobs, produce housing, expand local tax revenues, and revitalize downtowns, all while preserving the historic buildings that tell California story and define its character.

The amendments to AB 1265 make a good bill better by prioritizing housing, economic development, geographic diversity, and access for smaller projects while addressing a per project cap to broaden benefits statewide. And for these reasons, we respectfully ask for your support of AB 1265.

Started with good morning, but I guess we can still do that. It's slow getting there. My name is Jonah Henderson, and I'm a real estate developer. I'm also one of the recipients of the California State Historic Historic Tax Credit, and I'm here to support the passage of AB 1265. Please have a look at your, presentation while you listen.

Over the last decade, I've had the exciting opportunity to help redefine the future of Alameda Point. The former naval air station in Alameda closed in 1996 through the redevelopment of one building at the heart of it all. Building 8, now the Storehouse Lofts, at the center of the former Naval Air Station, is an exemplary historic adaptive reuse project, enabling economic revitalization of the former naval base and the preservation of California's history, and was financed in part by the federal and the California historic tax credit programs.

Over nearly a decade, our redevelopment transformed 270,000 square feet of abandoned naval office warehouse into 200 lofts rented as businesses and residences. The tax credits helped facilitate hundreds of jobs during the redevelopment phase, including during the pandemic.

And the project now provides hundreds of residential housing units and space to run just as many businesses. The property enjoys a 99% occupancy rate and we interpret that to mean that the lofts provide real and meaningful value to our occupants.

Today, business activity from all stripes of entrepreneurs, from artists to architects to attorneys, dining establishments, combined with ongoing city, property, sales, tax, provide an economic engine in a former economic desert, creating a precedent for future redevelopment and preservation in the surrounding historic neighborhoods, and proving the substantial and long lasting impact and the value of the California historic tax credit. Thank you.

I wanna thank the witnesses. Do we have any members of the public that wish to off offer their support?

Good morning, Mr. Chair and members. Adam Quinones, California advocates on behalf of the American Institute of Architects California in support. Thank you.

Good morning, Mr. Chair. Karen Lang. I'll have the San Francisco board of supervisors in support.

Thank you.

Thank you.

Good morning. Isha Iyer on behalf of the city of Bakersfield in support.

Thank you. Seeing no other, members of the public that wish to offer support, are there any lead witnesses in opposition? Seeing none, are there any members of the public that wish to voice opposition?

My apologies, Mr. Chair, member Steven Stenzler with Brownstein on behalf of the Housing Action Coalition in support. Okay.

I think we've got most of the members of the public wrapped up here. And now I will see if a member of the committee wish to make an opinion.

Thank you, Mr. Chair. I just wanna commend the author on this. This is exactly where we need to go and the direction we need to head to produce the results that we need for California, desperately, desperately need, especially in housing. So excellent work. Thank you very much.

Well, I thank my colleague, and I wanna thank Assemblymember Haney for this. This is important in my mind as well because we see these, sort of abandoned properties. And if we can turn these into economic, powerhouses, that's that's an incredible achievement. We've seen some success here in Alameda, in the city of Alameda. Very good.

I really appreciate that. I've been there myself. I've enjoyed some of the, venues that they have there. So it's really pretty impressive.

I meant to invite everyone, that is interested in taking a tour to reach out to me. I'd be happy to host you and let you see firsthand what it looks and feels like.

So not only are we preserving historic property, but we're actually providing housing, which is also very important, and economic growth. So it's kind of a win win. I see people shaking their heads yes, so I like that. And I heard that you would be accepting all the committee amendments. With that, I will be supporting your bill.

Assemblymember, would you like to close?

Yes. Thank you thank you so much, Mr. Chair, and and I could not agree more to to win win, and we're gonna have to make sure that over time that this is funded and really appreciate, the witnesses here. And I wanna give a special shout out, Cindy Heitzman, who's here, executive director of the California preservation foundation, who has been prioritizing this and in so many ways, been such a visionary leader leader there, recently announced her retirement.

So I wanna, say she's, she has not stopped, and I'm sure she will not stop, but it is it's really an honor to have her here and to be able to work with her on this issue and with that respectfully ask for your eye vote.

Thank you. Do we have a motion? I do. Senator Grayson moves the bill. Would you call the roll?

Motion is do passed as amended to the committee on appropriation. [Roll Call] 2-0.

The vote is 2-0. The bill is now a call. Thank the author. And the author, you might wanna stay here and present another bill. You're welcome to do that.

For sure. Thank you, Mr. Chair and members. I'm proud to present AB 1633, which will impose a 50% gross receipts tax on corporations operating for profit private detention facilities in California. We've got, close to 7,000 people in our state who are currently being detained in for profit, private immigration detention facilities. There are seven of those facilities in our state, and they have a long and well documented record of dangerous conditions, including inadequate medical care, health and safety violations, and inhumane living conditions.

Despite prior efforts to increase oversight and accountability, serious concerns continue. Following inspections of a newly opened private detention facility in Kern County, the attorney general reported dangerous living conditions and a lack of medical, adequate medical care including insufficient medical staff, hygiene products, and inadequate food and water. At the same time, these private companies operating in our state continue to generate billions of dollars through government contracts, while Californians and immigrant families bear the human and community cost of this private detention.

AB 1633 is rooted in a simple principle, California should not reward private corporations for profiting from detention with such conditions. This bill does not regulate federal immigrant policy, and said it takes California's long standing taxing authority to assess business activity taking place in our state.

We already apply industry specific taxes and fees where sectors create significant public costs, including in health care, tobacco, and oil extraction. AB 1633 follows that same principle of accountability and revenue generated by this bill where we reinvested into the due process for all fund to provide immigration related services and support communities impacted by detention enforcement actions. AB 1633 is about accountability, protecting California communities, and ensuring our laws do not reward private profiteering from detention.

Here with me to testify are, Bruno Huizar, supervising policy manager at the California Immigrant Policy Center, and Kimberly Wu, community organizer for services, immigrant rights, and education network.

Good morning, Chair, members, and staff. My name is Bruno Huizar with the California Immigrant Policy Center. We are a proud cosponsor of AB 1633 because it holds private detention companies accountable for profit custody. Private companies are generating hundreds of millions in annual revenue right here in California, from detaining Californians and separating California families. Each year, for profit private detention facilities detain tens of thousands of Californians in inhumane conditions with little to no accountability, threatening the health, safety, and constitutional rights of Californians.

Last month, the California Department of Justice released their annual report after inspecting conducting inspections of seven private detention facilities. And the Attorney General reported dangerous conditions. This is a quote, Inadequate medical care, delay in medical treatment, overcrowding, unsafe food and water, lack of hygiene, and unsafe food and water. Tragically, six people have died in California's private detention facilities since September, causing irreparable harm to the people and state of California.

The tax that AB 63 proposes is an accountability mechanism that the state of California has the authority to impose on private companies that subject Californians to inhumane conditions, medical neglect, and even death.

AB 1633, by Assemblymember Haney, makes it clear, no company in California should profit off of mass attention and mass family separation. California must hold private companies accountable for profiteering off of Californians in custody, and stand up for the health, safety, and well-being of all residents and families in California. With over a 116 immigrant justice community organizations, faith based, and civil rights organizations supporting this bill across the state, we respectfully request your aye vote. Thank you.

Good morning. I'm Kimberly Wu, and I'm community organizer for Services Immigrant Rights and Education Network, also known as SIREN. We serve our immigrant and refugee communities in the Bay Area and Central Valley, and we are a proud cosponsor for AB 1633, which would impose a 50% tax on corporations operating private immigration detention centers.

I have loved ones who sought permanent residency for over twenty years, and when they got to their final interview, ICE agents handcuffed their hands and feet and forcefully shipped them to separate detention centers in California. Words cannot describe the pain of seeing your elder relative who immigrated to this country to build a better life for your family, to break down crying behind a glass screen window where it's impossible to hug them and hold their hand.

There are not enough words to comfort your loved one who are stripped from their personal belongings, their clothes, their medical needs, and their freedom. No one deserves to experience the pain, suffering, and loneliness that my loved ones felt every day in that prison. Private companies like Geo Group and Co Civic profit from caging people like my relatives who had never spent a single night apart in their decades long marriage until they were detained, fiances weeks away from their wedding, and young children separated from their mother.

I know these stories because they were in the room with me, waiting hours for a chance of a one hour visit for their loved ones. Private detention facilities hold thousands of people across California in inhumane conditions, like severe medical neglect, filthy water, rotting food and abuse, and poor access to legal representation.

The CEO of CoreCivic, one of the largest for profit pension corporations, reported $7,500,000 in annual compensation and more since then and noted that the recent rise in immigration sweeps was, quote, unquote, truly one of the most exciting periods in my career with the company. This is who California is in bed with, private for profit companies who find it exciting to make millions from the suffering of our loved ones.

We respectfully urge your aye vote on AB 1633 to hold these corporations accountable and prioritize the safety and dignity of all Californians. Thank you.

I thank the witnesses. Are there any members of the public that wish to voice their support? Please oppose the microphone, your name, your affiliation.

Good morning. Carlos Lopez with the California School Employees Association in support.

Good morning. Christian Diaz on behalf of the State Superintendent of Public Instruction, Tony Thurman, San Bernardino Community Service Center, the South Asian Network, the Southeast Asia's Resource Action Center, the Street Level Health Project, the Thai Community Development Center, the California LGBTQ Health and Human Services Network, the Fund for Santa Barbara, the Trans Latina Coalition, the Uncommon Law, and the Working Partnerships USA. Thank you.

Good morning. I'm Joanne Abigail Garcia on behalf of NexGen California in support.

Good morning, Mr. Chair, Senator Grayson, Camden Sai with the California Immigrant Policy Center, here in support, also Indivisible California State Strong, Indivisible East Bay Area, Indivisible Euclid, Indivisible Fair Oaks Carmichael, Indivisible Palo Alto Plus, Inland Coalition for Immigrant Justice, Interfaith Movement for Human Integrity, Jewish Family and Children's Services East Bay, Justice to Jobs Coalition, Kern Welcoming, Extending Solidarity to Immigrants, La Defensea, and LA Voice. Thank you.

Good morning. Shamim Sher with the California Immigrant Policy Center, also registering support for AAPIs for Civic Empowerment, Access Reproductive Justice, Alliance for a Better Community, Asian Americans Advancing Justice Southern California, the Black LGBTQIA plus Migrant Project, BlueTurn, Indivisible, Buenavacino, the California Dignity Detention Coalition, the California Food and Farming Network, California Immigrant Youth Justice Alliance, as well as the Council on American Islamic Relations, East Bay Sanctuary Covenant, Empowering Marginalized Asian Communities, Ensuring Opportunity Contra Costa, Episcopal Diocese of San Joaquin, Freedom for Immigrants, Future Leaders of America, Healthy Contra Costa, Immigrant Justice and Action Coalition, Immigrant Legal Resource Center, Imperial Valley Equity Justice, and Indivisible Alta Pasadena.

Anaelli Martin, registering support for California Immigration Project, California National Organization For Women, California Partnership to End Domestic Violence, California Work and Family Coalition, California United for a Responsible Budget, Canal Alliance, Central Valley Immigration Integration Collaborative, CHISPA, Communities United for Restorative Youth Justice, Courage California Direct Policy Alliance, Latino Health Access, Legal Aid At Work, Community Advocacy Network, Community Organizing Project, New Light Wellness, NorCal Resist, Orange County Equality Coalition, Orange County Rapid Response Network, Parent Voices California, Filipino Workers Center Southern California, and Public Council.

Thank you.

Kylie Lindelli on behalf of Asian Americans Advancing Justice in support.

Karen Lang on behalf of the San Francisco Board of Supervisors in support.

Greg Rapier, pastor of Westminster Presbyterian Church here with Sacramento Area Congregations Together in support.

Chef Hewitt with the California Community Foundation in support.

Linda Wheaton, volunteer with NorCal resist, SAC Act, and Indivisible in support.

Alicia Dean, Sacramento Area Congregations Together in support.

Morning, Mr. Chair, Ryan Sherman with the Riverside Sheriffs Association in support.

Eric Paredes with the California Faculty Association in support. Thank you.

I thank the witnesses. Are there any, lead witnesses in opposition? Seeing none, are there any members of the public that wish to voice their opposition? Seeing none, I will now turn to the committee. No comments?

City member, hi. Haney, thank you for bringing this forward. It's a matter of of of clear justice and and need in our community, and it will help defend California against the malice that we might be seeing coming from cal from Washington. I think the witnesses, the courts may well weigh on this someday, but for now, I'm gonna support this. And, would you like to close?

Yes. Absolutely. Thank you, Mr. Chair. And I wanna thank the witness in the many, many as you as you heard over a 100 organizations who've been in support and all of the folks who've directly experienced these facilities and been seen firsthand the the cruelty that is associated with them and and and the impact that it's had on their families and our communities. And, with that, I appreciate your your your words and, respectfully ask for your aye vote.

Appreciate that. Do we have a motion? So integration moves the bill. Please call the roll.

Motion is do passed to the committee on appropriation. [Roll Call] 2-0.

The vote is 2 to 0. The bill is on call. And, at this point, the Chair is gonna have to step out, for another committee. Is Mister Grayson gonna be able to take the role the Chair for a moment for the gavel? Alright.

The next author is RBK. Please come and present your bill.

Thank you. It's fun to see my senators here. District 16 is well represented on this committee. Thank you, Mister Chair. And Mister Chair, I wanna thank committee staff for their work and collaboration on this bill.

I'm proud to present AB 2084, which promotes continuity of services and prevents disruptions to California's nonprofit organizations. Recently, we've experienced a notable increase in federal scrutiny and rhetoric directed at our nonprofit organizations regarding their tax exempt status, creating a level of uncertainty that extends beyond established legal eligibility standards and raises serious concerns about stability and predictability. This creates risk for California based organizations that are otherwise fully compliant with federal and state law, but are caught up in shifting federal actions or narratives.

California nonprofits, as we all know, provide vital services to our community members, and they rely on their status as a tax exempt organization to remain operable. Under current law, when federal status is stripped, the California Franchise Tax Board is required to revoke our state tax exempt status.

Currently, the FTB does not have the authority to delay and review the action before nonprofits are hit with state revocation. This means the nonprofits providing essential services can lose state tax exempt status quickly through no fault of their own. This bill addresses that gap by giving the franchise tax board authority to use its discretion to maintain state income tax exempt status for 501c3 three organizations that sought original exemption through the streamlined 3500 a process.

If federal revocation occurs for reasons not related to lead legal eligibility for revocation, This ensures that California nonprofits are protected from federal actions that may be influenced by the federal political landscape. It is narrowly crafted and does not expand eligibility or reduce oversight.

It simply preserves status for organizations that are following the law. AB 2084 addresses a real and growing risk. It is necessary and timely to safeguard and ensure California retains control over its own standards and protects organization from consequences beyond their control. With me today in support is Jennifer Fearing, Sacramento advocate for the California Association of Nonprofits.

Two minutes, please.

Thank you, Mister Chair. Jennifer Fearing, Sacramento advocate for California Association of Nonprofits. It's a 10,000 member organization, statewide policy alliance. Cal Nonprofits is pleased to sponsor AB 2084 and grateful to the author for helping protect the stability of California's nonprofit sector. Since 2008, nonprofits can pursue state tax exempt status expeditiously by filing the FTB's 3,500 a form that relies on the Federal Government's 501c3 determination.

Almost a quarter of California's nonprofits have utilized this process. This reliance on the federal approval creates an efficiency, but also precarity. If the Federal Government revokes a nonprofit's, tax exempt status even for political reasons, the FTB is required to automatically revoke their state status as well. The FTB currently lacks that authority to delay or evaluate the merits of the actions for nonprofits that use the streamline process.

Since federal threats began emerging in early 2025, Cal Nonprofits has continued to urge all 3,500 A nonprofits to initiate the longer form process to get independent validation from the state of their tax exempt status.

And we are only here requesting this change in law because of specific and unprecedented federal threats and executive orders targeting nonprofits for their speech or mission driven work rather than any actual wrongdoing. Indeed, in just in May of this year, the OMB issued an alarming directive singling out 49 nonprofits under the pretense of fraud prevention, and these were mostly organizations serving immigrants or providing legal aid.

With their take tax exempt status in jeopardy, a nonprofit can find its grants and payments frozen, face new tax liabilities, and possibly have to reduce essential services to vulnerable people. This is a common sense solution giving the FTB discretion to evaluate the appropriateness of state tax status and if a federal rotation was due, not to a non filing fraud or misconduct issue. It does not lower the bar for tax exemption.

It simply gives nonprofits time to demonstrate their ongoing eligibility to the state. We think it's important that the state protect our our right to safeguard nonprofits our residents rely on every day, and I'll just add this bill aligns with the state sovereignty goals, and protections of AB 1318 from last year, which the governor assigned to ensure California nonprofits remain eligible for state support based on state level standing and not federal status alone. We thank the assemblywoman for her leadership and urge your aye vote.

Right to the second. Very good. Any members of the public that would like to add on, in support, your name, affiliation, and position, please.

Angela Pontes on behalf of Planned Parenthood affiliates of California in support.

Jennifer Tannehill with Aaron Reed and Associates on behalf of the California Society of Enrolled Agents in support.

Very good. Any others in support? Seeing none, I don't believe we have lead witnesses in opposition. Anybody in the public or in the room in opposition? Seeing none move, I'll bring it back to committee.

I have no questions. I do wanna make a comment. Thank you very much for bringing this bill forward. Assembly member, Bauer-Kahan, PEI should not affect an organization's tax exempt status under California law in any way whatsoever. So this bill says that California must evaluate nonprofits on their actual compliance record.

So thank you very much for that. And when we get well, would you like to close?

Respectfully ask for your aye vote. Thank you, Senator.

Awesome. Close. When we get to a place where we can get a motion and take a vote, we will. Thank you so very much for your presentation.

Assembly Member Elhawary, you are here today with AB 2403. And is that right?

Yes, sir.

You can present when you're ready. Glad to have you here.

Thank you so much. Good morning, Mr. Chair and Members. I'm proud to present AB 2403, a bill focused on keeping commercial production jobs here in California for our workers, our businesses, and our local economies. California has long been a hub for commercial production. We have the crews, the infrastructure, and the talent that built this industry.

But we are losing that work. Over the past decade, California's share of nationally aired commercials has dropped from about 50% to 25%. In LA alone, production has declined by 35% in just five years. That decline has real consequences. It means fewer jobs for skilled workers, fewer opportunities for people trying to get their foot in the door, and less investment in our local communities. Commercial production is highly mobile.

And right now, other states are actively competing for this work and winning because they are offered targeted incentives. At the same time, California remains one of the only major production states without a dedicated commercial production tax credit. This bill is supported by labor organizations representing the very workers who power this industry every day. It protects good paying, middle class jobs and the workers who depend on them.

Our labor partners know that when productions leave, careers leave with it. AB 2403 is about closing that gap. It creates a target incentive to keep commercials and their production here so we can retain jobs, support our workforce, and ensure this industry continues to grow in the state that built it. These jobs also create real pathways, including for individuals looking to enter or reenter the workforce and build stable careers.

With me today is David Michael González, vice president of labor relations and external affairs, associations of, with the Association of Independent Commercial Producers, and Rudy Reyes, set lighting technician and restorative justice director at the Restorative Academic Mentorship Program.

Great. You have two minutes each.

Thank you. I'm David Michael González with the Association of Independent Commercial Producers, representing over 300 companies that specialize in the production and post production of TV commercials for advertisers and ad agencies. AICP is proud to sponsor and support AB 2403.

Commercials are short, fast moving, and highly mobile productions. Because of that speed and flexibility, commercial production is uniquely sensitive to costs and logistics. Today, 29 states include commercials in their filming incentive programs. But California does not. As a result, work that was once routinely produced in California is going to other states and even out of the country.

When that happens, California loses jobs for crew members, opportunities for small businesses, customers for equipment vendors, post production facilities, transportation providers, and local communities that support production. AB 2403 addresses the gap in California's film incentive framework with a targeted and measured solution.

It establishes a standalone commercial production credit with a limited annual allocation and requires productions to incur at least 75% of filming costs in California to qualify. Credits would be allocated after production occurs, helping to ensure that incentives remain tied to real economic activity and verified in state spending.

As California implements expanded film and TV tax credit program, commercial work remains an important bridge between larger productions for the workforce, vendors, and other stakeholders that support our industry. California remains the best place in the world to make content.

But without a competitive framework, we're pricing ourselves out of an important segment of the film industry we once dominated. AB 2403 will help stabilize employment for skilled workers. It will support small businesses that depend on production activity, and it will ensure that California remains a leader across the full spectrum of production. We respectfully ask for your aye vote on AB 2403.

Thank you so much. Next witness, two minutes.

Mr. Chair, Members of the Committee, thank you. My name is Rudy Reyes. I'm a member of Local 728 Set Lighting Technicians Union in Hollywood, and I also serve as a restorative justice director for the Restorative Academic Mentorship Program, RAMP, in Los Angeles, and I'm a member of the Anti Recidivism Coalition also in Los Angeles.

Every day I work with young people who are fighting for a second chance, and I stand before you today to talk about an opportunity that connects economic policy with public safety, workforce development, and human potential. I'm here today representing the thousands of skilled workers who rely on commercial production to make a living.

California has long been the global leader in film and television production. Through legislation like AB 1138, this body made a powerful statement that we are committed to keeping production and jobs that come with it here at home. But there is a gap in that vision. Commercial production, advertising, branded content, short form media is quietly leaving California at a rapid pace.

These are high frequency, fast moving productions that generate consistent jobs for crew members, electricians, grips, drivers, caterers, stylists, and countless entry level positions. Yet unlike film and television, they often do not qualify for meaningful tax incentives. I remember a time when I would do two to three Super Bowl commercials per year.

Then in 2024 and 2025, I did no Super Bowl commercials. As a result, they go elsewhere to states and countries that offer even modest financial advantages. California's share of commercial production has dropped from about 50% to 25% over the last decade. In Los Angeles alone, production is down roughly 35 to 40% in recent years.

It is about thousands of jobs that could be filled by Californians, especially young people trying to enter their workforce, being exported out of state. Through RAMP, we work with justice impacted youth who are ready to work, ready to learn, and ready to contribute. What they need is access. Commercial production is uniquely positioned to provide that access. It offers shorter project cycles, more frequent hiring opportunities, and entry level positions. I respectfully ask for an aye vote on this.

Thank you so very much. Great testimony on that. Any members of the public that would like to add on in support? Your name, affiliation, and position, please.

Good morning, Mr. Chair and Members. Missy Johnson on behalf of the Directors Guild of America as well as the Entertainment Union Coalition in support.

Good morning, Chair and Members. Connor Gusman on behalf of SAG-AFTRA and Teamsters California in support. Thank you.

Good morning. Adam Keigwin on behalf of California LULAC and the National Action Network in support.

Good afternoon. Esteban Núñez on behalf of the Anti Recidivism Coalition creating opportunities and programs in support. Thank you.