August 27, 2026 · Revenue And Taxation · 2,284 words · 11 speakers · 49 segments
Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. I want to say good afternoon and welcome to the hearing on the Assembly Committee on Revenue and Taxation. I have my little gavel, but okay. Okay. Pursuant to Assembly Rules 77.2, we are hearing bills that are substantially have been amended by the Senate. We have three items before us on our agenda today. Those bills are as follows. File item number one, AB 672, Colosa. File item number two, AB 760, Ta. File item number three, AB 1519 by Gibson. Madam Secretary, I think we have... Oh, I guess I can do it now. Ms. McKenna is not with. She's absent today. So filling in for Ms. McKenna will be Mr. Mark Gonzalez. And we want to say thank you very much for being here and welcome. Thank you. With that, Madam Secretary, please call the roll to establish a quorum. Gibson?
Here.
Gibson, here. Sanchez? Carrillo?
Here.
Carrillo, here. DeMaio? Mark, oh, McKenna. Mark McKenna? I mean, Mark Gonzalez.
Mark Gonzalez here.
Quirk Silva. Michelle Rodriguez.
Michelle Rodriguez here.
We have a quorum. Mr. DeMaio here. A quorum have been established. With that being said, our first item before us, again, is file item number one, AB672 by Ms. Colosa. Please have a seat at the desk. And your witnesses are free to join you.
I want to let your primary witnesses know you have two minutes each for your testimony And Ms Colosi you may begin when ready Thank you Thank you so much Mr Chair and members AB 672 is a simple straightforward bill that extends a much tax exemption to assist in the making or refurbishing of low housing Habitat for Humanity benefits from a similar exemption that supports the construction of affordable homeownership. and the exemption in AB 672 provides similar support for community land trust projects, both rental and homeownership, that cannot be supported by the traditional tax exemption. The existing statute provides that if a community land trust granted this exemption, must repay the exempted taxes if the property was not developed or rehabilitated, or if the development or rehabilitation is not in the course of construction within five years. As such, the county only forgoes property taxes when the CLT delivers on the promise of creating new affordable housing or preserving existing affordable housing. The cost to counties varies directly in proportion to the benefit provided. Since the introduction of this exemption, CLTs have been able to build or refurbish 101 units of low-income housing, only costing the state less than $400,000 over the last five years in tax exemptions. While the total number of units supported are modest, the tax savings have a significant impact on the viability of CLT projects given the overall limited financing available to support these CLT projects. Recent conversations show that both CLTs and assessors need continued education to understand the availability and use of this exemption And the more it's used, the easier it'll be to use in the future. And hopefully this impact will grow. With that, I'm going to introduce our witness, Danny Kaiser, who represents Community Land Trust. Thank you very much.
Thank you, Assemblymember. Hello, Chair and members. Danny Kato-Kaiser on behalf of the California Community Land Trust Network, the sponsors of AB672, which will extend the sunset of a successful existing policy which supports CLTs to provide much-needed affordable housing. CLTs are community-controlled nonprofit organizations that steward land to provide permanently affordable housing and community facilities, housing thousands of low-income Californians. Today, there are 50 emerging and established CLTs in California in all regions of the state. CLTs put affordable home ownership and rental opportunities in reach of low and moderate income households. While other forms of affordable housing place income restrictions on their properties, which expire after some period of time, CLTs keep properties permanently affordable. AB 672 will extend the sense of an existing policy that exempts CLTs from property taxes, which while those properties are undergoing or pending construction or rehabilitation for up to five years before they become habitable as affordable homes. This is the only pathway available to CLTs constructing or rehabilitating new affordable homeownership units, and it's essential to our ability to expand homeownership opportunities. This policy was initially passed in 2019 under Senator Bell, and it was extended in 2022 with Assemblymember Petrie Norris. Both of those bills faced no opposition and had bipartisan support. Since the original law went into effect in 2020, the policy has proven to be an invaluable tool, as Assemblymember Colosa stated. Without legislative action, this policy will sunset on January 1st of this coming year, increasing housing costs and making some projects financially infeasible. We ask for your aye vote.
Thank you. Thank you very much. Anyone in the room wishing to speak in support of this measure, please come to the microphone. Your name, organization, and this is support. Hearing and seeing no one are approaching. Primary opposition to this measure, you have the same right to come and speak. Okay, seeing no one. I want to bring it back to the dais. It's been moved and properly moved. It's been moved by Ms. Rodriguez, seconded by Mr. Gonzalez. Thank you very much. You may close, Ms. Conloza.
Thank you, Mr. Chair. Respectfully ask for your aye vote. Thank you.
Thank you very much. Madam Secretary, please call the roll. The motion is recommend concurrence in Senate amendments. Gibson?
Aye.
Gibson, aye. Sanchez? Carrillo?
Aye.
Carrillo, aye. DeMaio? Aye. DeMaio, aye. Mark Gonzalez?
Aye.
Mark Gonzalez, aye. Quirk Silva, Michelle Rodriguez.
Michelle Rodriguez, aye.
That's 5-0. That bill is out 5-0. Thank you very much. Next, we have file number 2, AB 760. Mr. Ta. How are you? Good to see you, former vice chair. You may be getting ready.
Thank you so much. Good morning, chair and members. As many of you know, last May, a few months ago, my district was nearly devastated by a chemical leak that forced more than 50,000 residents from their homes. AB 760 was amended in the Senate to provide a tax exclusion for settlement from this incident. California has provided this exclusion for declared emergencies in the past. I'd like to introduce my witness, Nicole Wardleman, with appreciation of Cassie, who represents our county board supervisor. Thank you very much.
To your witness, you have two minutes. You may begin ready.
Okie doke. Nicole Wardleman on behalf of the Orange County Board of Supervisors here in strong support of AB 760. On May 21st, a chemical incident at the GKN Aerospace Facility in Garden Grove created the threat of a catastrophic explosion and ultimately forced the evacuation of more than 50,000 Orange County residents. Families were displaced from their homes, businesses forced to close, and communities throughout Garden Grove, Stanton, Westminster, and surrounding areas were significantly disrupted. For many residents and businesses, the evacuation also resulted in very real financial losses, including temporary housing expenses, lost wages, transportation costs, business interruptions, and other costs associated with being forced from their homes and workplaces. AB 760 provides a straightforward and important form of relief. The bill ensures that settlement payments intended to compensate those affected by this emergency are not treated as taxable income by California. These settlements are intended to help residents and businesses recover their losses and restore some measure of financial stability following an extraordinary event. Taxing those payments would reduce the resources available for that recovery and undermine the basic purpose of the compensation. California has recognized this principle following other declared disasters by excluding qualifying settlement payments from taxable income AB 760 appropriately extends that same treatment to Orange County residents and businesses impacted by the Garden Grove chemical incidents The Orange County Board of Supervisors believes individuals receiving compensation for losses associated with this emergency should be able to retain the maximum practical benefit of those funds for their recovery. We thank Assemblymember Toff for bringing this measure and we would urge an aye vote. Thank you very much. Anyone in the room wishes to speak and
support you, please come to the microphone. Your name, organization, seeing none. Primary opposition hearing and seeing none on this measure. I'm going to bring it Back to the dais. It's been moved by Mr. DeMaio. It's been seconded by Ms. Sanchez. Madam Secretary. Oh, please forgive me. Mr. Ta, you have the right to close. So please go free to-
Yes, I would like to thank the chair and the committee staff. You are amazing. You worked with my office early on this bill and all the detail that really helped my bill. It's very strong. And so this is really important to me and everyone in my district, and I respectfully ask for the aye vote. Thank you very much.
It's already been properly moved and seconded. The motion is to recommend a concurrence in the Senate amendments. Madam Secretary, please call the roll. The motion is recommend concurrence in Senate amendments. Gibson?
Aye.
Gibson, aye. Sanchez? Aye. Sanchez, aye. Carrillo?
Aye.
Carrillo, aye. DeMaio? DeMaio, aye. Mark Gonzalez?
Aye.
Mark Gonzalez, aye. Quirk Silva? Michelle Rodriguez?
Michelle Rodriguez, aye.
That is 6-0. That bill is out 6-0. Thank you very much. We have our last and final bill, and I will be presenting, and I'll turn the gavel over to Vice Chair Sanchez. Thank you. She's got it. She's got it. Assemblymember, please begin when you're ready.
Thank you very much. Thank you very much, Vice Chair Sanchez, for taking the gavel. While I present Assembly Bill 1519, While the tax administration can be complicated, the concept of the statute of limitations is simple. For many years, no statute of limitations exists on the collections of an income or franchise tax delinquents at the state level. However, beginning in 2006, a statute of limitations on the FTB collections actions went into effect. Despite the 20-year statute of limitations being codified in statute, the clock is reset any time the FTB imposes a fee or penalties or interest. This undercuts the whole point of having a statute of limitations. Assembly Bill 1519 provides that once the underlying tax liability becomes due and payable, the limitations period begins to run. And subsequently, the fees and charges do not restart the clock. Putting it simple this bill would create an actual 20 statute of limitations not one that the FTB can extend however or whenever a new fees or penalties are imposed This bill will not result in any significant revenue loss to the state because these amounts are not actually collectible in this particular case. I want to say thank you for your consideration and urge support on AB 1519. Here with me to provide supporting testimonies of well-capable individuals representing the California Society of Enrolled Agents. They will both self-introduce. Madam Chair.
Your witnesses may proceed.
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 this solution to provide certainty to taxpayers while continuing to allow an extended window for FTB to collect. There's just two things I want to make note of. The definition of tax in the bill relates only to specifically the sections in the bill and does not affect the definition of tax elsewhere. And then also of note, the IRS has allowed 10 years to collect tax liabilities, where California affords the FTB 20 years to collect. So we think this is a reasonable bill, and we ask for your aye vote. Thank you.
Good afternoon, Madam Chair. Missy Johnson, on behalf of the California Society for Certified Public Accountants, AB 1519 addresses ambiguity in current law that creates challenges for current tax practitioners, helping taxpayers resolve their liabilities and moving them into compliance. It's that simple, and that's why we're happy to support. Thank you.
Is there anyone additional? Okay. Are there any additional people in the room that would like to express opposition? Questions or comments from the committee? Okay. Chair Gibson, would you like to close?
Yes. I respectfully ask when I vote. Thank you very much.
Perfect. Motion by Rodriguez, second by Carrillo. The motion is to recommend concurrence in Senate amendments. Gibson?
Aye.
Gibson, aye. Sanchez? Aye. Sanchez, aye. Carrillo?
Aye.
Carrillo, aye. DeMaio? Thank you. DeMaio, aye. Mark Gonzalez, aye. Quirk Silva, Michelle Rodriguez.
Michelle Rodriguez, aye.
That vote is 6-0. Bill's out. Thank you, ladies. Yes, I know. Maybe. What? The vote is 6-0. That bill is out. And then we're going to go back and catch you. What do you mean? We're going to, Madam Secretary, please open the row for absent members. And on AB. Okay, 672, please. Sanchez. Sanchez, aye. Cork-Silva. Okay. Unless you want to wait for Ms. Cork-Silva. Thank you Thank you. Thank you. We'll keep the roll over for five more minutes for absent members. Thank you. Thank you. Thank you Please open the roll for the absent members Item number one, AB 672, Colosa. Quirk-Silva? Aye. Quirk-Silva, aye. Item number two, AB 760, Ta. Quirk Silva. Quirk Silva, aye. Item number three, AB 1519, Gibson. Quirk Silva. Aye. Quirk Silva, aye. Thank you very much, Ms. Quirk Silva. So that completes all the items. That's before the Revenue Taxation Committee. We stand adjourned. Thank you. Thank you.