April 6, 2026 · Revenue And Taxation · 14,864 words · 6 speakers · 41 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. I want to say good afternoon and welcome to the hearing of the Assembly Committee on Revenue Taxation. We will be operating as a subcommittee. I want to go over a few ground rules. I want to hope that everyone has had a great spring recess. First, I would like to remind advocates that the deadline for your position letter is one week prior to the hearing. Please submit support or opposition letters to the legislative porthole. It's on the website. Also want to remind everyone that the committee has a suspense file. Surprise. You will find that information on our website for the rules will be again will be posted there. In summary, bills will with a revenue impact of more than one hundred fifty thousand will not be eligible for a vote immediately after the presentation. Instead, we'll be referred to that suspense file. Accordingly, no bills on today's agenda will be eligible for a vote. So all bills today will be eligible for the suspense file. So we do not have a quorum as of yet. So we will hold off on that. Establishing a quorum until one is reached. So we'll be acting as a subcommittee. And so we will ask our first presenter. We noticed that we have Assemblymember Nguyen here, so we will proceed with Assembly Bill 1606. Ms. Nguyen, you may approach and please have a seat. Your witnesses are present. We will remind the witnesses you have two minutes each.
And Ms. Nguyen, you may present when ready.
Thank you Mr Chair and members I proud to present 1606 an important bill that supports small businesses that are dealing with cleanup costs they didn create
And May is—
If you can bring the microphone a little closer to you.
May is Small Business Month, so what a perfect time to present this bill. This bill creates a five-year tax credit from 2027 to 2032 of up to $20,000 per year to help cover costs tied to illegal dumping, encampments, and abandoned property. These are real costs. Business owners are spending thousands of dollars just to keep their properties clean, safe, and open. Some of these expenses can be deducted today, but that doesn't go very far when the costs keep coming back. This bill provides more direct relief. The credit is targeted. It covers cleanup costs like waste removal, sanitation, and repairs from damages. It does not cover ongoing maintenance, wages, or permanent upgrades. It is also capped and time-limited. This builds on work we introduced last year with updates to make sure it is more focused and more workable. Mr. Chair and members, we are committed to continuing to work with the committee on any amendments needed to strengthen the bill and make sure it works as intended. At the end of the day, this is about helping businesses deal with costs they should not be carrying on their own. With me is Audrey here on behalf of California Business Property Association.
Thank you very much. You have two minutes.
Thank you. Good afternoon, Mr. Chair and members. Audrey Ritajek from Crew Strategies on behalf of the California Business Properties Association, and we're the proud sponsors of AB1606. We thank you to the committee for your continued work on this issue, and we appreciate the points raised in the analysis and look forward to continuing to work through them as the bill moves forward. Recent court decisions have led to increased enforcement in public spaces, which has pushed encampments and illegal dumping into private commercial properties. As a result, businesses, particularly small businesses and small mom-and-pop property owners, are now routinely forced to cover their costs of cleanup, including waste removal, property damage, and ongoing security. These are reoccurring costs that many simply cannot absorb. AB 1606 provides a five-year tax credit covering 100% of those cleanup expenses, and it's a targeted practical solution that helps keep properties safe, supports small operators, and stabilizes commercial corridors. So we respectfully ask for your aye vote. Thank you.
Thank you very much. Any witnesses in the room wishing to speak in support of Assembly Bill 1606, please line up your name, your organization, and this is support only.
Amber Madison, California Apartment Association, in support.
Thank you.
Megan Shumway from Arden Arcade, in support.
Thank you. Hearing and seeing no one else wishing to lodge their support for assembly bill 1606. Any primary opposition to 1606 in the room, we invite you to come up. Hearing and seeing none. I want to bring it back to the committee. Any questions from committee members? Hearing and seeing none. Ms. Wynne, you may close if you wish.
Thank you, Mr. Chair and members. I really hope that we can continue to help small businesses during this time of Small Business Month. As legislators, we need to do everything we can to assist them, especially now during these times. And when the time is appropriate, I hope that we can get this out and get this out. Move this forward. Thank you, Mr. Chair. Thank you, members.
Madam. Okay. Thank you very much. This bill is a suspense candidate, and thank you very much for appearing. We will move to file item number 2, AB 1611, Haney. I don't see Mr. Haney. File item number three, Mr. Tangipah, AB 1714. We will move to file item number 6, AB 1971. Mr. Bennett, we understand Mr. Bennett is not here. Mr. Lee will be presenting on his behalf. Welcome. Do you have any witnesses, Mr. Lee?
I do not think so.
Okay, you may proceed when ready.
All right, so I will be presenting for Assemblymember Steve Bennett. This is AB 1971. California is at a tipping point. 14 of the 20 most destructive fires occurred within the last 10 years. And last year's historic LA fires have shown us that property resilience is no longer optional but is necessary. AB 1971 directs the border equalization to clarify that home hardening retrofits are not accessible upgrades, meaning they won't result in higher property tax. Comprehensive home hardening, which includes insulation of ember-resistant siding, multi-pane windows, and a fireproof roof, and more can cost upwards of $100,000. This clarity for the Department incentivizes Californians to take real steps to protect their home without fear. Their property tax will increase. Respectfully ask for aye vote on behalf of Assemblymember Steve Bennett.
Thank you very much. And you said you have no witnesses in support. Okay. Anyone in the room wishing to speak in support of Assembly Bill 1971, would you please line up? Need your name, organization, and this is support for Assembly Bill 1971.
Amber Madison, California Apartment Association, in support.
Thank you. Vanessa Chavez with the California Building Industry Association, in support. Thank you.
Megan Shumway, Sacramento 350, in support.
Thank you very much. Seeing no one else wishing to speak in support of 1971. Any primary opposition to this measure? I'm sorry. Or any opposition to this measure in the room? Hearing and seeing none, bring it back to the committee. Any members wishing to speak? Mr. Lee, you may close on behalf of Mr. Bennett.
Mr. Bennett. I respectfully ask your aye vote when the time comes. Thank you very much. This
item will be referred to our suspense file. Thank you very much. Mr. Chair,
I do have a bill later in the file if I can present that one as well.
My own bill. You yourself? Yeah.
It's, um...
Are you presenting on behalf of someone else? No, no. I have a bill that's for myself as well.
If you don't have any other authors. It's AB 2394.
You may present on your own bill AB 2394.
All right. Thank you, Mr. Chair and colleagues. I understand that this bill is going to the committee suspense file for consideration at your April 27th hearing. However I want to elaborate on this bill This is a bill idea I had when I was a staffer over 10 years ago When the idea that people have owned and lived in their homes for decades may be ready to downsize and move closer to their grandchildren or children but they are reluctant to do so because of the capital gains tax that they would owe The analysis points out a number of valid concerns with the bill in print, and I will be submitting amendments while the bill is in suspense to address those concerns. The amendments would do the following. Lower the homeowner age to 55 to be consistent with the Prop 19 property tax transfer law. Require the owner to have lived in the home for at least two years of the prior five years. Require the home to be sold to a natural person. And we would keep the minimum 20 years of ownership and the five-year sunset. We will also be adding Section 41 reporting language to have the number of homes sold using the exclusion and the property tax assessment increases for the affected properties. The analysis notes that people sell their homes for all sorts of reasons, and it is unclear how the tax benefit in this bill would really impact that. It's a fair point. However, I look at it this way, that for homes that have already been locked off the market for decades because people have raised their family but are ready to move on to their next phase of life, the bill provides an incentive for them to sell their home to the next owners who can raise and start new families. To me, the estimated revenue loss is worth the benefit of opening up these locked-up homes to new owners and families. In short, this bill is about incentivizing older homeowners who perhaps need to move on, trade downwards or downsize so that new families can move in. This is especially true in my district where we have population declines leading to school closures because there are not enough new families where it doesn't make financial sense for them to sell a home at $1.8 million to buy a home at $2 million right now. So this is about alleviating working class families, trying to create more liquidity in the market, and try to also reset some of the property taxation clocks on some of the very old properties. I will respectfully ask your aye vote at the appropriate time in the next committee. Thank you very much.
Do you have any witnesses?
No witnesses.
Anyone in the room wishing to speak in support of AB 2394, would you please line up your name, your organization, and this is support. Good afternoon. Amy Garrett with California Association of Realtors. Very much looking forward to supporting this bill once amended as is proposed today and thanking the author for early and ongoing discussion on the bill. Thank you very much. Anyone else wishing to speak in support of 2394? Hearing none. Any primary opposition? Please have a seat. And you have two minutes. Hi, Danny Kando-Kaiser on behalf of the California Tax Reform Association. I'll just be very brief. Sorry if you can hear me over the noise. We will look at the amendments. We just were seeing those today. We still think that there are many benefits to tax, to homeowners, and may still be opposed, but for now remain opposed. Thank you. Thank you very much. Anyone in the room wishing to speak in opposition to 2394, would you please step to the microphone, your name, organization, and this is opposition. Hearing and seeing none, bring it back to the dais. Mr. Lee, you may close.
We're stuck to ask your item when the time comes, and a bill to try to increase liquidity, incentivize families to have more homeownership opportunities. Thank you.
Thank you very much. This item is a suspense file candidate. Thank you very much, Mr. Lee. Give us one moment So we will go back to file item number two, AB 1611. Mr. Haney. And do you have any witnesses? I believe that I do. Okay. Here we go. You may proceed when ready. Thank you. Thank you, Mr. Chair and members. This bill addresses an issue that I know that you have considered and been hearing a lot about, which is how we make sure that California residents, prospective homeowners actually have a shot to be able to compete to purchase and own a home in our state. Right now, we have folks who are out-of-state Wall Street landlords who are competing directly with regular California families who simply want to realize that dream of homeownership. We are subsidizing these folks and actually underwriting their ability to outbid and push out prospective California homeowners. Nearly half of Californians currently do not own a home. We have the second lowest rate of homeownership of any state in the country, and investor homeownership is an increasing part of what is making it harder for California families and residents to be able to purchase a home. In recent years, Wall Street landlords have rapidly expanded their share of the single-family housing market and used mechanisms like the one this bill will address through like-kind exchanges. These exchanges allow investors to sell one investment property, buy another within 180 days, and defer paying taxes on their profits, making it easier to keep expanding the total net worth of their portfolio. Today, about one in five homes in California is owned by an investor. So large corporation hedge funds can move quickly with cash-only offers, outbidding working families and first-time buyers, shutting them out of homeownership and the opportunity to build equity. Families who once owned homes in many neighborhoods across California or had the opportunity to now find themselves priced out by investors who are being underwritten to do so by policy here in the state of California. This bill will end the current tax break of capital gains on sale of single-family houses for corporations that own more than 50 single-family homes. and the goal is simple, to stop subsidizing the biggest portfolio builders and reduce the incentives that help them keep buying homes that could have gone to California families. With me to testify in support of the bill is Lenny Goldberg with the California Tax Reform Association and Kevin Stein with Rise Economy. Lenny Goldberg, California Tax Reform Association. Excuse me for a moment. I'm going to thank you very much. You can hold that thought for one moment. We're going to establish a quorum. Mr. Ruff, if you could please call the roll to establish a quorum. Yep, sir. Present. Gibson here. Sanchez? Here. Sanchez here. Carrillo? DeMaio? Here. DeMaio here. McKenna? Quirk Silva? Michelle Rodriguez? Yes. Michelle Rodriguez here. You have a quorum. Thank you very much. A quorum has been established. You may proceed, sir. Thank you. Lenny Goldberg, California Tax Reform Association. Many of these houses are held by real estate investment trusts, and they turn over and never pay the tax on the capital gain. They are able to continually buy new sell houses and buy houses without ever paying any tax. Like exchanges apply to much commercial property They also apply to single homes owned by large corporate investors and hedge funds It's very complicated methods of taxation, but the fact is that they never pay tax. They'll never pay tax on these gains, and this bill keeps those big corporations from having an upper hand over ordinary single-family homeowners. Thank you very much. Next witness, two minutes, please. Thank you, Mr. Chair, members of the committee. My name is Kevin Stein. On behalf of Rise Economy, a proud sponsor of the bill, I am pleased to speak in support of AB 1611. AB 1611 will achieve three important goals. It will give families a fighting chance to attain home ownership, intergenerational wealth, and stability. The bill will also close a costly tax loophole that unduly favors large Wall Street investors and that comes at the expense of an already strained state budget. And the bill will also discourage some harmful profit-seeking by large investors that are too quick to take advantage of the stress, as we are seeing right now in the aftermath of the L.A. fires. The opposition cites investors as having played a beneficial role during the foreclosure crisis, But we believe the seeds of the current crisis were planted by investors at that time of great devastation to millions of California families. During the Great Recession, nonprofit housing counseling agencies testified that countless families who were qualified for homeownership and able to purchase available and affordable homes in their neighborhoods were unable to do so as they lost out to all cash investors buying foreclosed properties. The opposition also says this bill creates a penalty, but the bill merely evens the playing field by subjecting big investors to the same taxes that most Californians already pay. Also, this bill does not restrict any property sales or the ability of property owners to sell to tenant occupants or first-time homebuyers, for that matter. AB 1611 is a common-sense approach to a real-world problem. For these reasons, we respectfully request your aye vote. Thank you. Thank you very much. Anyone in the room wishing to speak in support of AB 1611, would you please line up your name, your organization, and this is support only. Thank you, Mr. Chair. Renee Bayardo representing Rise Economy, a sponsor as well as SCIU California, who supports. Thank you. Good afternoon, Mr. Chair. Yvonne Fernandez with the California Labor Fed in support. Thank you. Good afternoon, Chair and members. Mari Lopez with the California Nurses Association in support. Thank you. Good afternoon, Chair and members. Conor Gussman on behalf of engineers and scientists of California in support. Thank you. Good afternoon, Chair and members. Ritza Martinez on behalf of PowerCA Action in strong support. Thank you. Good afternoon. Carlos Lopez, California School Employees Association in support. Thank you. Good afternoon, Eric Paredes with the California Faculty Association in support. Thanks. Thank you. Michelle Warshaw, California Teachers Association in support. Thank you. Good afternoon, Mr. Chair and members. Janice O'Malley with AFSCME California in support. Thank you. Hi, David Pollock on behalf of 50 is Enough in support. Thank you. Thank you. Calling on any primary witness in opposition to AB 1611, primary witness in opposition, would you please have a seat at the table? We have two chairs there. Good afternoon, Mr. Chairman. Two minutes. Two minutes. Thank you. Jim Lights on behalf of the National Rental Home Council, which represents the large national owners of single-family rental homes. The provisions of this bill will largely apply only to large owners. The four companies in California that have owned real estate here have been net sellers of homes in California for almost a decade. And we provided that information to some of the stakeholders here. And because this bill creates a taxable event on selling a home, it actually creates a disincentive for the industry to continue selling in California because you may be able to realize a gain and not have a tax bill if you sell in another jurisdiction if California were to eliminate the 1031 exchange provisions just for this class of taxpayers. So based on that, we are opposed. Thank you. Thank you very much. Next witness, two minutes.
Ember Madison from the California Apartment Association. I will keep my remarks brief as the committee analysis hit the nail on the head.
Put the microphone closer to you. Thank you. Sorry, Mr. Chairman.
I will keep my remarks brief as the committee analysis hit the nail on the head. As far as our opposition is concerned, the author stated premise for the bill is that it is needed to stop large real estate companies from buying homes that could have otherwise gone to California families. But as the analysis aptly points out, less than 1% of homes in the year 2023 were purchased by large real estate companies. So it seems like the data does not simply support the purpose of the bill. So for that reason, we respectfully request a no vote at the appropriate time. Thank you very much.
Anyone in the room wishing to express opposition to 1611, Would you please step to the microphone your name, organization, and opposition? Mr. Chair, I would ask you to tell us on behalf of California's Business Roundtable in opposition. Thank you. Amy Garrett with California Association of Realtors in opposition to the bill as drafted, but thanking the author and staff for remaining in discussion with us to try to find a path forward for greater homeownership opportunities. Thank you. Vanessa Chavez with the California Building Industry Association in opposition. Thank you. Thank you. Hearing and seeing no one else wishing to speak, I want to bring it back to the committee. Any members on the dais wishing to ask any questions of this witness or their witnesses, or the witnesses here? I have one question to the author. What specific impact are you hoping to achieve with this bill, Mr. Haney? We're hoping to make it possible for more California residents to be able to purchase a home. When you are trying to get a home, it's hard enough because we don't have as many as we should. We need to build a lot more homes and address the scarcity that we have. But the homes that are available should be made available for Californians, for people who want to realize that dream of first-time homeownership. And right now, if you, one, have to compete with these large investment firms for those homes, and two, your own state is underwriting with tax benefits their ability to provide cash-only offers and outbid Californians I think that something that doesn serve what should be our goal here which is more Californian families being able to realize their dream of homeownership We investing in it in all sorts of other ways with first time home buying assistance And yet we're doing that with one hand. On the other hand, we're giving our own residents tax payer dollars in the pockets of large firms, helping them outbid Californians. I think that's bad public policy. And this is not going to solve the entire challenge. As you heard, it's a small percentage of overall homes that are sold, but it's growing. And in a state as large as ours, it's tens of thousands of homes. And so it's something that we can do to provide more opportunity for homeownership for Californians. Thank you very much, Mr. Haney, for that response to my question. And at this time, you may close if you wish. I appreciate the comments and the question and the continued dialogue with opposition. And certainly, I think we, as we work together on so many things, share the goal of more opportunities for housing for Californians and homeownership for Californians. And I will continue the dialogue moving forward. And I hope at the appropriate time we can move this bill forward. Thank you again, Mr. Chair. And thank you very much. This bill will be referred to our suspense file. Thank you, witnesses on both sides for appearing before this committee. Thank you very much. Thank you. formally referring these bills to the suspense file. Starting off with file item number one, AB 1606, went to the suspense file. File item number two. Oh, in that order. Okay, file item number six, AB 1971, Bennett presented by Lee to the suspense file. Okay. File item 10, AB 2394, Lee to the suspense file. We did that. Now we can move to file item 3. File item 3. Now we'll be hearing file item number 3, AB 1714 by Mr. Tangipa. And you may proceed when ready. Any witnesses? All right. Okay. We've got a few bills, so I think a couple of our witnesses may be behind a little bit. Okay. So I can just get started. You may proceed when ready. Your witnesses will catch up with you. Perfect. Well, thank you, Mr. Chair and members, and thank you to the committee staff who prepared the analysis for us and for their work on this. One thing prior to really getting into the bill, I just wanted to make one thing clear when I speak about CalHafa and to let everybody know what CalHafa actually is. It provides financing and down payment assistance to low to moderate income first-time homebuyers in California. Some of the key requirements include a minimum credit score of 660 to 680 meeting specific county income limits taking a home buyer education course and occupying the property as a primary residence So when I speaking about CalHafa today and some of the credits on this bill, I want you to think about who this is going to specifically help. My experience prior to coming here is I was a realtor, and my business was specifically focusing on helping first-time homebuyers break generational poverty through home ownership. I grew up in low-income housing. I targeted areas like North Highlands and the Central Valley because we could afford here. Most of my friends and other people and other colleagues that I have worked with qualify for CalHFA, trying to break generational poverty simply through asset ownership. So AB 1714 creates a targeted personal income tax credit for sellers who complete repairs that are required to a first-time buyer using CalHafa assistance. This bill is not about cosmetic upgrades, optional remodeling, or rewarding ordinary home improvements. It is narrowly focused on repairs tied that create artificial scarcity for first-time homebuyers. But a lot of people think when they see this bill is that it's just a credit to sellers, But really, it's a negotiation tool to help people who are the most disadvantaged qualify and have a foot in the door. As a realtor who's helped so many qualify for this program, we were losing negotiations time and time again. Because when a seller has multiple options to go with, they chose the easiest one for them. And when people are qualified for a Cal Half-Aloan, you have to have requirements on certain repairs that need to happen. So the sellers would not even give us a chance. When that happens, the buyer loses the home, not because they were unqualified, but because a required repair became the barrier to closing. AB 1714 helps keep those transactions together by offering a limited tax credit equal to 40% of the qualified repair expenses capped at $25,000 per taxable year. This bill only applies to repairs that are required as a condition of financing. It excludes cosmetic repairs, renovations, landscapes, and aesthetic upgrades. It also includes a five-year sunset and contains reporting language so the legislature can evaluate whether it is working. This bill is about preserving access to homeownership for first-time buyers who are already doing the right thing, working with approved financing, going through the escrow process, and trying to purchase a home they can afford. If a seller is more willing to complete those required repairs and keep the transaction alive, that benefits the buyer. In the most concrete way possible, the sale closes and the buyer, somebody who qualifies for one of the lowest income protection loans out there, the buyer gets to benefit from this type of repair. Lastly, I just want to quickly add that we have been working with the realtors on their concerns, and I look forward to continuing working with them. Thank you very much. Do you have any witnesses speaking in support? I see a familiar face coming to speak in support. Do you wish to? Okay. So you have no primary witnesses? I think they missing Anyone in the room wishing to speak in support of 1714 please come to the microphones state your name your position and this is support Thank you. My name is David Ball. I'm representing the SFB Alliance, and I am in support. We are in support. Thank you. Thank you very much. Good afternoon. Danielle Bautista authorized on behalf of United Way of Fresno and Madera counties to share their support for AB 1714. Thank you. Thank you very much. Thank you. Thank you. Mr. Chair and members, Coby Bazzotti with the California Association of Realtors. We have concerns with the bill as it is in print because it has language addressing as a condition of closing or part of the transaction. We have worked with the author and his staff and we would like to say thank you very much for working amendments out with us to take them while the bill is on suspense. And as soon as we see them print, we'll remove our concerns. Thank you. Okay. Thank you very much. Anyone in the room, primary opposition to this bill, would you please come and take a seat so we won't get confused so we know exactly who's doing what? Thank you very much. Good afternoon. Can you hear me? Okay. Good afternoon. Danny Kando-Kaiser on behalf of the California Tax Reform Association, nonprofit organization of labor, public health, education, and public interest groups. which advocates for fair taxes in the healthy public sector. We must respectfully oppose the bill. We doubt whether the tax benefits proposed in the bill will provide real relief or improvement in first-time homebuyers programs in this state. And it could have the disadvantage to those homebuyers by obligating the buyer rather than the seller to make unnecessary repairs, which is usually part of a negotiated process. These homeowners will have limited tax liability, which for working families with children is very low by design. The DFA is a direct program of assistance, which is much more appropriate for funding for homebuyers' needs, including necessary repairs, more so than a tax credit. Thank you. We ask for a no vote. Thank you very much. Anyone in the room wishing to express your opposition to this measure, would you please come to the microphone, name, your organization in opposition? Hearing and seeing none, I want to bring it back to the committee. Any members wishing to provide any comments to Mr. Tangipaw? Hearing and seeing none, Mr. Tangipaw, you may close if you wish. Well, again, thank you, Mr. Chair. And as an individual who's done over $20 million in sales, helping those who are in the most disadvantage, I know exactly who this would apply to. And this would give those who I started off by saying a minimum credit score of 660, a home buying course, a specific first-time home buyer who qualifies for CalHFA, the most disadvantaged loans that somebody can get to purchase a home. This would give them the upper hand in negotiations when it comes to speaking to these sellers and give us the ability to really sell them to help break generational poverty. That is what this bill is. It specifically is applied to Cal Haffa. And in my personal experience, I have seen plenty of first-time homebuyers lose out on great homes simply due to the required repairs. And AB 1714 is a simple way to get rid of the artificial scarcity in the home market for first-time homebuyers. And I respectfully ask for your aye vote. Thank you. Thank you very much. This bill is referred to our suspense file, and thank you very much for appearing with your bill. Next, Assembly Bill, file item number four, AB 2427. You may proceed when ready. Any witnesses? Yes. Okay. No. Thank you. And as I go through this bill today, I want all of you to think about this. Farmers today are asked to grow more food for more people in the history of the world with the least amount of land and the least amount of resources ever available to them. This industry generates more than $59 billion to annual farm production and supports over $100 billion in total economic activity when you include processing, transportation, and related sectors. It also supports more than 400,000 jobs statewide, many of them in rural communities where agriculture is the backbone, spine, hands, feet, eyes, and ears of our local economy. But despite its importance, agriculture is under growing pressure. Farmers are facing rising input costs, labor shortages, water uncertainty, regulatory challenges, and increasing competition from other states and countries that are actively investing in their agricultural sectors. AB 2427 is a practical, targeted response. It creates a tax credit for qualified agricultural producers to help offset the cost of labor, equipment, infrastructure, and production. It is designed to help keep California agriculture competitive at a time when investment decisions are increasingly shaped by cost and policy. We have seen that targeted tax incentives can play a role in retaining key industries in California. The legislature has recognized that in other sectors, such as Hollywood, agriculture deserves the same consideration because we are already seeing production and investment shift to other states and countries. If the legislature felt that urgency to provide tax relief to a $30 billion industry in California, it only makes sense to see the critical need to a $100 billion industry. An industry that once gone will create even greater budget and economic issues. Some of you have probably seen this bill before. It looks very similar to one that last year was supported, the film tax credit. But this was reshaped as the farm tax credit because our farmers and food deserve the same type of protections. At its core, AB 2427 is about stability, keeping farmland in production, keeping people employed, and supporting the rural communities that depend on agriculture. Today, I have Amber with the Sacramento County Farm Bureau to testify and support. Thank you very much. You have two minutes. Okay. My name is Amber McDowell. I'm the executive director of the Sacramento County Farm Bureau. Our Farm Bureau supports this bill that establishes an agriculture tax credit program for farmers California farmers and ranchers are facing unprecedented costs driven by labor mandates regulatory compliance, implementing climate smart practices and energy costs. Specifically for one of my diversified crop farmers, 40 percent of his budget goes to labor, five percent just to fertilizer, five just for diesel, and four percent for electricity. In the Cal Poly study, evolving costs for regulatory compliance in the produce industry, the rising costs of regulation to California farmers has increased 1,366% since 2006. Unfortunately, the market prices that California farmers receive have remained relatively the same for the last several decades. In these tight margins, if there is any, it does not allow farmers to invest in newer, efficient, or green technology that could help cut operating costs. The legislature has committed similar investments to other industries like entertainment, and it has the opportunity to provide the same level of support to California's vital agriculture sector, which directly impacts our local and regional communities. As markets continue to stay flat and costs continue to rise, farms were permanently closed, therefore leaving California to rely on their food source coming from outside the state, sending money to other countries for that food, and the loss of revenue that agriculture currently brings into California by exporting food to other countries. Because the entertainment industry is mobile, it can come and go as economic opportunities change. But when a farm closes and that land is converted into something else, that land and that food source is lost forever. Farmland cannot be created later. California needs to start protecting the agricultural land that's left that we have now because it's all we have to continue to supply our growing population and our economy. California agriculture is one of the state's largest industries, providing jobs and essential food to millions of Californians, the nation, and the world. It's essential for our economic stability, in-state food security, and progress towards the state's environmental goals. Thank you very much for your comments. Next, we'll go to those in the audience. Anyone wishing to speak in support, would you please step to the microphone, your name, your organization. This is support. Good afternoon, Chair Members. Peter Ancel, California Farm Bureau, in support. Thank you very much. David Bologus of the Alliance, in support. Thank you very much. Seeing and hearing no one else wishing to speak in support. any primary opposition to 24-27. Would you please come up and have a seat at the table? Hello, Danny Kando-Kaiser again on behalf of the California Tax Reform Association. As the analysis indicates, we think it's unclear why the state would provide such a large tax reduction for normal operations of agriculture. We do respectfully oppose the bill. We recognize that farms in the state are struggling. But again, this bill looks like it would mostly be usable by farms that are already turning a profit. Those farms who are suffering can roll over their losses or pay no taxes and then roll over their losses into future profits. And we ask for a no vote. Thank you. Thank you very much Anyone in the room wishing to speak in opposition name please have to microphone your name organization and this is opposition to 2427 Hearing and seeing none I want to bring it back to the dais Any members Ms DeMaio Your what group again California Tax The California Tax Reform Association, which is formed of the state's labor groups. Oh, okay. The tax raisers. Gotcha. I never saw you come before this committee to oppose the Hollywood tax credits last year. You were silent. Is it because labor benefited from that? So within the California Tax Reform Association are a wide variety of labor groups, and the consensus is not 100% on the Hollywood tax credit. I anticipated that you might ask the question, and again, CTA is composed of teachers, administrators, service workers. Labor unions. Yeah, so again, just sort of repeating myself that the consensus was not 100% on that. Right. So, again, I always have to ask the question about an organization's true motive and whether they're consistent. Doesn't sound like there's tax reform in your organization. It sounds like you oppose this because farm workers and farmers writ large may maybe not be a paying member of your coalition. Is that why? No, no, I certainly wouldn't say that. I think that, again, California Tax Reform Association has always pushed for progressive. How many farmers are part of your organization? Um, I actually wouldn't, I don't know. No, I mean, I could, I could look perhaps the firefighters, perhaps members of their family, nurses. Oh, that sounds like a stretch. Okay. So I, again, I always look at opposition and I want to understand their background, where they're coming from so that I can weigh the credibility of their statements. And I find them not to be a credible opposition witness. For the author, what was the value of the Hollywood tax credit? And let me start with yours. What is the value of your tax credit annually? It's actually pretty close to a merit match to the Hollywood tax credit, $750 million. So $750 million. The ag industry capped at $1 million per individual. And how many jobs are in the agricultural sector in the state of California? Over 400,000. Yeah. Yeah. There's only 100,000 jobs, if you broadly defined it, in the entertainment industry in California. So we're talking about a fourfold job support versus last year's tax credit. So if this committee saw fit to advance that priority, my hope is that the committee will also see fit to support a fourfold job multiplier for our ag sector. And I hope that when we get this back to the committee off of the suspense file that it will enjoy our support. Thank you. Thank you very much. Any other additional questions? I have a question for the author. How exactly will this help small businesses struggling to make a profit? So right now, farmers, their margins on their businesses is actually smaller than it was during the Great Depression. And a lot of it is because of the additional burdens, regulatory compliance, and fees that they have to deal with here in California. So just like what it did for the Hollywood tax credit, when we talked about this was real relief for the local people there, this is real relief for all the farmers that provide all of the jobs in our districts. If you'd like to visit a place in my district or actually just outside of my district, We have many small towns like Kerman Fireball Mendota up here in the Sacramento regional and area where this type of relief will ensure that those jobs stay here as our farms on the national scale and here locally are really collapsing. Okay. Thank you very much, Mr. Tangipah, and you may close if you wish. Thank you, Mr. Chair. And all I can say is that agriculture is worth protecting and investing in. And last year, a very dapper-looking, intelligent, probably has the greatest bow tie in the legislature, spoke on SB 132 and talked about how it was real relief for California and said it makes a meaningful investment into films, tax credits, because they support real California jobs. This bill is a mirror match that has a fourfold effect on farmers because we cannot pick up farmland, but they can pick up films and move out of the state. If this industry right now is collapsing, we need to provide the relief before it's too late. And that's exactly why I ask for your aye vote on this bill. Thank you very much, Mr. Chang-Epa, for presenting this bill. This bill will be referred to our suspense file. Thank your witness for appearing before this committee. Thank you very much. Thank you. I think you have one more bill before this committee. File item number 5, AB 2533. You may present, and if you have witnesses, they can approach. And have a seat at the table, and you may commence when ready. Sorry, they don't make these desks high enough, and I keep banging my knees. Yeah. But again, thank you, Mr. Chair and members, for my last bill today. I would like to thank everyone for their time and patience this afternoon. AB 2533 addresses a simple problem under current law. When an employer helps cover the cost of a gym membership or fitness benefit, that support can be treated as taxable income to an employee. This bill corrects that by allowing a deduction for a qualified employer-provided fitness benefit. This measure is about removing a tax penalty on prevention and wellness. If we want healthier communities and healthier workers, we should not be taxing a modest benefit that helps people stay active. AB 2533 is also narrowly tailored. It applies only to a uniform fitness benefit provided to all full-time employees. It does not apply to country clubs, golf clubs, travel, meals, lodging, or enhanced benefits for highly compensated employees. This bill is designed to support ordinary working Californians whose employers want to invest in their health, but may not have the resources to build or maintain an on-site gym. Current law already favors employers who can provide an on-site fitness facility tax-free. AB 2533 helps level that playing field for everyone else. I also want to address a few of the committee's concerns directly. First, this is not a duplicative tax benefit. Employers may already deduct compensation generally, but employees can still be taxed on receiving this benefit. AB 2533 addresses the employee side tax treatment. Second, while no policy can guarantee that every single employee will use a gym membership, this bill, is about improving access and lowering barriers to healthy behavior. The state should not be taxing a benefit that makes wellness more affordable. And finally, I understand the committee's concerns regarding implementation details, including a sunset and conformity issues. I am committed to continuing to work with the committee on those items as the bill moves forward. Members, AB 2533 is a targeted step that supports prevention, workforce, wellness, and affordability. I respectfully ask for your aye vote. And with me today is Andrew Mock, who's here to testify in support. No, I'll also do Bob's. And we're missing one, and he will also do Bob Rogers. Thank you. Thank you very much. You have two minutes. Thank you, Mr. Chairman and members of the committee. My name is Dr. Andrew Mock. I'm a primary care physician, quadruple board certified in family preventive lifestyle and obesity medicine. I am the medical director for Hope Memorial Hospital in Southern California, where I prescribe exercise every single day in my practice for chronic disease prevention, treatment, and reversal. I also serve as a national education lead on the physical activity prescription, working with the American College of Lifestyle Medicine on the Lifestyle Medicine residency curriculum. that will go to 400 residency and fellowship programs nationwide this year, training our future generation of physicians on physical activity assessment, prescription, and referral. As part of that work, I also work with national advocacy groups, serving on the board of the Physical Activity Alliance, the Medical Fitness Association, and working within the American Medical Association as a delegate to the American College of Lifestyle Medicine. And just to prove that we are the tip of the spear that is working to make physical activity assessment, prescription, and referral a standard in health care as part of the It's Time to Move initiative, I also practice what I prescribe. I'm five-time California's strongest man. Just defended my title two weeks ago, so you know that this is something near and dear to my heart. But we have a broken health care system. We pay for medications. We pay for surgeries. When it comes to physical activity and lifestyle medicine, we often leave patients with the bill. And this is despite very strong evidence that this is one of the most effective interventions that we have, both from an efficacy standpoint as well as a positive return on investment. Physical activity is a first-line treatment for all major chronic health conditions. high blood pressure, diabetes, obesity, mental health. It reduces cancer risk. It improves cancer survivorship. This time, it is time we give it the respect that it deserves because the evidence is clear. Cardio-respiratory fitness, strength, and power are the strongest predictors of long-term health that we have, up there with blood pressure and healthful body weight and control of blood sugars. But the real barrier comes with access, equitable access. Those with the least have the least access to this powerful intervention. If you can afford to pay for your own exercise, you get much better health care in our state. I want to give you one quick example. Two years ago. Can you finish your thought You two minutes Yes Just finish your thought Very powerful story One of my patients came in difficulty climbing up 10 flights of stairs We started her in a community exercise program that costs per month Four years after that, four months after that, she was able to go to 1,000-step speech with her church group and climbed those stairs without assistance. Thank you. Thank you very much. Anyone in the room wishing to speak in support of AB 2333, please come to the microphone, your name, your organization, and this is support. David Bulldog, SFV Alliance. I apologize for keep on coming back, but I'm a sucker for great tax credits and deductions in support. Thank you. Thank you very much. Stephen Stanzer with Brown Seen on behalf of the Health and Fitness Association and the California Fitness Alliance in support. Thank you. Thank you very much. Any primary opposition to this measure 2533, would you please come up to the table and have a seat? And you have two minutes. Thank you very much. Again, Danny Kander-Kaiser on behalf of the California Tax Reform Association, in respectful opposition. This legislation will complicate the state code since there are no provisions existing in federal law. Many employers already provide wellness and fitness benefits, which are deductible as a business expense. For those instances that qualifies medical expenses, they are non-taxable, while other benefits such as gym memberships are taxable to the employee. We request a no vote. Thank you. Thank you very much. Anyone in the room wishing to register their opposition to this measure, please come to the microphone. Hearing and seeing none, I'm going to bring it back to the dais. Any questions from my colleagues? I have one question for Mr. Tangipa. Do you intend to limit the deductions amounts to $600 to make it match the unemployment insurance tax exclusion and add a five-year sunset to this measure? Is that what's currently suggested as committee amendments? Yes. I would love to work with the committee on that and more than happy to get together and work with that. So, yes. Okay. Great. Great. Thank you. Thank you very much. And, you know, I just, you know, appreciate your witnesses' comments and your comment as well. You know, I work, it may not look like it, but I do go to the gym. And certainly we believe in physical fitness and, you know, working out and believe that if people do this, and it helps people calling in sick and things of that nature and just a healthy lifestyle makes people tend to, I believe, live a long life. And health is very, very important. And we believe in it. We certainly encourage it. So thank you very much for your comments. And you may close if you wish. Yeah, well, I appreciate those comments, Mr. Chair. And two, one of the things that I've learned here today is to make sure that when you're sitting next to California's strongest man, do not wear the same suit. Because one significantly looks better as he gets to work out a whole lot more often than I do. But there is something that we do live by. Health is wealth. And I think that a lot of people are seeing that. And we wanted to make sure that if some of the employers want to help people invest into their health, you know, we're not hurting them through a, and I wanted to try this again, duplicative tax. So we wanted to make sure that it's easier on them. And I respectfully ask for your aye vote as we really prioritize that health is wealth. Thank you. Thank you very much. This item will be referred to our suspense file. Thank your witness for coming and appearing before this committee Next up we have file item number 7 AB Mr Gonzalez We know you've been waiting patiently. You and your witnesses can approach and have a seat, and you may commence when ready. All right. with his radio announcing voice. Let's start. Good afternoon, Mr. Chair and members. I'm pleased to present AB 2192, a measure that makes a targeted and thoughtful adjustment to California's tax policy to better support our agricultural producers. while maintaining fiscal responsibility and protecting local government revenues. California agriculture is not just another industry. It is a cornerstone of our state's economy and a critical part of our national and global food supply. California farmers produce more than a third of the nation's vegetables and over two-thirds of the nation's fruits and nuts. The food grown in our state feeds families not only here at home, but across the United States and around the world. Ensuring that agriculture remains viable in California is not just an economic issue. It is a food security issue. Yet today, farmers are facing unprecedented financial pressure. Under current law, California provides a state-level sales and use tax exemption for farm equipment and machinery used to produce and harvest agricultural products. However, that exemption does not apply to local sales and use taxes, meaning that farmers still pay significant taxes on the very equipment they rely on to operate. AB 2192 addresses this inconsistency by extending the existing exemption to include local sales and use taxes. This change helps create a more consistent tax structure while reducing the cost burden associated with essential equipment purchases. And it shows that we stand with our agricultural community and want the industry to be viable here in California. Members, the importance of this relief cannot be overstated. California farmers today are operating under some of the highest production costs in the nations, which we just heard about. They face rising costs for labor, fuel, water, fertilizer, compliance with environmental regulations, and equipment modernization. In some regions, regulatory compliance costs alone have increased more than 1,300% since 2006, now consuming a significant share of total production costs and placing intense strain on already narrow profit margins. At the same time, many producers have seen little growth in the prices they receive for their crops. That imbalance, rapidly increasing costs combined with relatively flat revenues, is pushing some farmers out of my district, out of California, or out of business entirely. Others are forced to scale back operations, delay equipment upgrades, or pass higher costs along through increased food prices. And when farmers struggle the impacts extend far beyond the farm gate Reduced production capacity affects supply chains increases costs for families in our districts and weakens the resilience of our food systems Supporting farmers is not just about supporting one sector. It's about protecting the stability of our food supply and the affordability of food for California families. AB 2192 offers targeted relief where it matters most, on capital investments that are essential to agricultural productivity. Just as importantly, this bill takes a responsible and balanced fiscal approach. AB 2192 includes a $200 million general fund appropriation to reimburse cities and counties for their initial revenue losses associated with the expanded exemption. This ensures that local governments remain whole and that we provide support to agriculture without shifting the burden onto our local partners. I'm aware that this appropriation would only cover the first year of this exemption and look forward to working with both the cities and counties to address this. From a tax policy standpoint, this bill promotes consistency. Consistency in the state and consistency locally. Uniformity and fairness by aligning state and local treatment of agricultural equipment purchases. Members, California agriculture feeds our communities, mine and yours. It supports our economy and helps feed the world. But our farmers cannot continue to shoulder ever-increasing costs without thoughtful policy support. AB2192 is a practical, balanced step that helps reduce financial pressure on producers, protects local government revenues, and strengthens the long-term sustainability of California agriculture. Let's protect our California-grown food. And join me in protecting California agriculture. With me today is Peter Ansell from the California Farm Bureau. Peter? Good afternoon, Chair and members. Thank you very much. You have two minutes. Good afternoon, Chair and members. Peter Ansell representing the California Farm Bureau, a statewide organization of over 25,000 California farmers and ranchers. And as you've heard, California farmers and ranchers, producers face extremely high regulatory costs. Cal Poly, San Luis Obispo studies looking at lettuce and wine grape productions have noted that producers of all sizes are experiencing in the past 10 years or 20 years, 13 to 1700 percent increases. Importantly, that's about, it used to be about a 1.5 percent of production costs per acre. That's now up to about 12 and a half percent. So just to do business, fill out all the forms, fill out all the paperwork is 12 and a half percent of every dollar that it cost to grow something in the state, which is an astronomical increase that is having really negative unintended consequences on farmers and ranchers, as evidenced by 7,000 lost small farms and ranches since the last census that the USDA produced was completed. And as has also been talked, farmers and ranchers are price takers. They're not price makers. They grow under contracts that are predetermined the year prior to planting going in. so they don't get to choose what the price is going to be. It's grown under a contract. With that gap being unsustainable, we'll either continue to lose farms in the state and continue to see more consolidation at a time when And the state is asking farmers and ranchers to invest, invest in new electric equipment, invest in equipment that meets air quality standards, that meets water quality standards, that decreases water use, that lowers the inputs on fertilizer, pesticides, herbicides, that addresses the impact to labor from an increasing climate that's having heat index impacts. All of those are noble, laudable goals and important capital investments. They're also all extremely capital-intensive, costly capital investments for our members to make. AB 2192 provides targeted relief by providing a reduction in that cost of those equipment purchases. Providing that sales tax exemption in a fiscally responsible way and then reimbursing local governments is something that the state has been here before. We've done that under the Williamson Act, where local government was recognized for going property tax dollars in exchange for producers committing to grow food in California. AB 2192 follows a similar model where state revenues would backfill lost local revenues, just as it did with the Williamson Act. because each and every farm purchase supports rural economies and rural agribusinesses, and the state is looking to modernize the equipment that farmers and ranchers use, we hope that the state will also be willing to be a partner in those investments. If you can conclude your thought. With 2192. So I respectfully ask for an aye vote. Thank you very much. Anyone in the room wishing to speak in support of Assembly Bill 25-22? 25? I'm sorry? 2192. Oh, 2192. I'm on the wrong one. That's it. 2192. Would you please step to the microphone, your name, your organization, and support of Assembly Bill 2192? Hearing and seeing none. Primary opposition to this measure? Good afternoon. Again, Danny Kando-Kaiser on behalf of the California Tax Reform Association respectfully opposed farm machinery and equipment is already exempt from sales tax at the state level. The bill would require a $200 million appropriation with no evidence that the partial exemption is insufficient with regard to farm equipment purchases, and we do ask for a no vote. Thank you very much. Anyone in the room wishing to speak in opposition to 2192, please step to the microphone your name, your organization, and opposition. Hello, members and chair. My name is Julissa Cajacarbenas here on behalf of the California State Association of Counties and the League of California Cities in respectful opposition. Thank you. Thank you very much. I want to bring it back to the dais for any questions of this author. Anyone? Okay, great. Thank you very much. Ms. Gonzalez, you may close. Thank you, Mr. Chair. These are not easy decisions that have to be made, but the reality is we have to protect California agriculture. It begins in California, it ends in California, and the way we do that is by protecting them. So I respectfully ask, when appropriate, for an aye vote. Thank you very much. And this bill will be referred to our suspense file. I want to thank your witnesses for appearing before this committee. you have an additional bill file item number 82522 and you may proceed when ready Same voice Do you have witnesses Okay Yes Thank you very much. You may proceed. Thank you, Mr. Chair and members. I'm pleased to present AB 25, 22, a practical and compassionate measure that helps Californians afford the basic medications that they rely on every day. AB 2522 expands California's existing sales state sales tax exemption for prescription medications to also include over-the-counter items like ibuprofen, cold and flu medicine, allergy treatments, and other common medications families depend on to stay healthy and care for loved ones. Members, Californians are facing one of the highest costs of living in the nation. Our statewide sales tax rate is the highest in the country. And when combined with local taxes, it places a significant burden on working families. At the same time, the cost of living in California is nearly 47% higher than the national average. And millions of Californians live at or near the poverty level. For many Californians, these pressures show up in everyday choices like deciding whether to pick up medicine for a sick child. I'm sure we've all had to do that. Treat seasonal allergies or manage common illnesses at home. These are not luxury purchases. These are basic necessities that help people stay healthy, return to work, and keep their families functioning. Have you ever had a headache from an allergy day after day after day after day, and the only relief is having to go get something for that allergy medicine? This is what I'm talking about. This is the type of relief that we can provide. So today, prescription medications are exempt from sales tax because we recognize that medicine is not optional. It is essential. But over-the-counter medications, many of which treat the very same conditions, are still taxed. AB 2522 corrects this inconsistency and creates tax parity between prescription and over-the-counter medications, recognizing that both play a critical role in maintaining health and well-being. Members, this issue also has an important equity implications. Sales taxes are widely recognized as regressive, meaning they place a greater burden on those with fewer financial resources. In my district alone and throughout California, low-income families, seniors living on fixed incomes, and individuals managing chronic health conditions are often the ones who rely most heavily on the over-the-counter medications. When these everyday health products are taxed, the burden falls disproportionately on those least able to afford it. Over-the-counter medications also serve as an important and cost-effective first line of care. They give families the ability to treat mild to moderate conditions quickly and affordably without requiring a visit to the health care provider. This is not only this not only supports individuals health, but also helps reduce strain on our health care system by allowing people to manage routine illnesses safely and at home. The example I give is in my own home. You know that I have a son with special needs. He is nonverbal. it's a puzzle to try and fix issues because he can't tell you he's got a headache. We have to wait for these things to pop up So we have to do our first line care And sometimes that hyperprofen Sometimes it something very simple Instead of going to the emergency room and paying all that money and being in there for hours and hours and hours This gives me and it gives tons of California sons and daughters the opportunity to take care of it on the front line. We have the ability to do that and help. AB 2522 provides meaningful relief while maintaining responsible fiscal oversight. The exemption would remain in effect until January 1st, 2032, allowing the legislature to evaluate its effectiveness through measurable data and reporting requirements. This ensures transparency and gives us the ability to review the impact of the policy over time. At its core, this bill reflects a simple principle. Medicine should not be treated as a luxury. When a parent purchases fever medication for a child, when a senior buys medication to manage chronic pain, or when a worker picks up cold medicine to get back on the job, they are making responsible health decisions, not discretionary purchases. AB 2522 offers practical targeted relief to Californians at a time when many are struggling with rising costs. It promotes fairness in our tax system, supports public health, and helps ensure that access to basic medications remains within reach for all Californians. Members, I respectfully ask for your aye vote, when appropriate, on AB 2522. Thank you very much. Anyone in the room wish to speak in support of this measure 2522? Mr. Chair, members of the committee, Randy Pollack on behalf of Halion, which is a consumer health products company. Thank you. Thank you. Hearing and seeing no one else, any primary opposition to this measure? Hello, Danny Kando. Kaiser on behalf of the California Tax Reform Association in respectful opposition, a $300 million hit to the general fund that would impact local and state governments is something that we would oppose. We ask for a no vote. Thank you very much. Anyone in the room wishing to speak in opposition to this measure 25-22, would you please line up? Hearing and seeing no, I'm going to bring it back to the committee. Thank you very much. No one wishing to speak on the committee. According to the committee analysis, this bill would result in a savings roughly $25 per household. Is this relief sufficient to justify roughly $250 million cost savings to the state? What is your? Yeah, you know, you have to ask the question to the poorest people in our communities. What does $25 do for your pocketbook? What does $10 do? See, that's the difference between a meal, getting extra food. $25 to some folks might mean nothing. That's a couple Starbucks or a cigar. But for the people that absolutely need it every single day, $25 could be the lifeline. So we have to look at things from an empathetic perspective sometimes and things aren working in California and we need to be able to fix it and this is one way that we can do that Thank you very much You may close Thank you Respectfully ask for an iPhone Thank you very much. Again, this item is referred to our suspense file. Thank the author for appearing and all you have any witnesses. Thank you very much for being here. Thank you, Mr. Chair. File item number nine, AB 2389. Ms. Irwin. You and your witnesses may approach, and you may proceed when ready. Well, good afternoon, Mr. Chair and committee members. Today I'm presenting AB 2389, a bill to keep energy affordable for all Californians. AB 2389 extends an existing property tax exclusion for newly installed solar energy systems for five years. Without this exclusion, Californians who install solar energy will be penalized with increased property taxes. At a time when electricity prices are rising across California, this policy helps homeowners, business owners, and public institutions keep energy affordable while transitioning to clean energy. This is especially important now as federal rollbacks, including the expiration of the 30 percent credit, place greater pressure on state level government to maintain momentum. By extending this incentive, California continues to support cost savings and strengthen grid resilience. This is especially important for low and middle income Californians who make up over half of all solar users. While the bill is on suspense, I intend to add amendments to remove new construction projects which are already required to install solar energy. With me here to testify in support of the bill are Laura Dehan from Environmental California and Dave Rosenfeld from the Solar Rights Allowance. Thank you very much. You have two minutes each. Okay, great. Thank you, Chair and committee members and staff. My name is Laura Dehan. I'm the State Director for Environment California Statewide Environmental Advocacy Group. And we are very enthusiastic to sponsor AB 2389 by Assemblymember Irwin. California is a leader in solar and in battery storage. And we've really led the way by adopting policies that align with our clean energy goals. AB 2389 continues the common sense popular policy to exclude solar and storage that's been in place since voters approved a measure in 1980, Proposition 7, with more than 65% of the vote to encourage solar and storage adoption. And this bill, AB 2389, will protect homes, schools, small businesses and community buildings from a new solar or storage property tax. As we currently face a new energy crisis and an affordability crisis, we need more people to be adopting solar and storage. And the last thing we should be doing is penalizing everyday Californians from going solar. A new solar property tax would actually discourage people from doing solar and storage right when we need more. And if this bill doesn't pass, then come January 2027, Californians will be discouraged from investing in clean air and greater resilience. We're facing extreme heat waves right now. Again, wildfires, blackouts. And as these are becoming more frequent, energy storage with solar is more than peace of mind. For many, it's a lifeline. It will help by reducing peak demand, saving all Californians energy costs and reducing power outages as well as cutting pollution. So we urge your support in the committee. Thank you. Thank you very much. Next witness. Two minutes, please. Thank you, Mr. Chair and members of the committee. My name is Dave Rosenfeld. I'm the executive director of the Solar Rights Alliance. We're a nonprofit network of 150,000 solar users across California. We support AB 2389, which would ensure that California does not levy a new property tax on everyday people in the institutions that support them. A yes vote on AB 2389 is a simple way to keep the affordability crisis from getting worse. According to the Lawrence Berkeley National Lab, more than half of all rooftop solar users in California are middle and working class. About half are people of color. The largest group of rooftop solar users in California are households that make between $50,000 and $100,000 a year. These are everyday people. These are teachers, nurses, disabled veterans, seniors on fixed income. These are people who scrimped and saved to get solar. Sometimes they even dip into their retirement accounts. And the reason why people do that is because the alternative is worse, which is being a sitting duck to rising rates and a CPUC that continues to rubber stamp those rates. Rooftop solar users are also institutions that support everyday people, like schools, food banks, libraries, water, water treatment plants. And these entities will also be negatively impacted if AB 2389 is not passed. A new property tax on solar and batteries doesn't make sense because home solar doesn't increase costs for local governments, and rooftop solar and batteries actually decreases people's footprint on the electricity grid and reduces the prevalence of blackouts. And so, you know, not passing AB 2389, what effectively will happen is that we're going to increase the cost of both housing and energy on everyday people who are already struggling to make ends meet. And so we enthusiastically and respectfully urge an I vote. Thank you very much. Anyone in the room wishing to speak in support of this measure? 2389, would you please? Oh, wow, that's the whole room. Okay. Your name, organization, and this is support only. Kim Stone of Stone Advocacy on behalf of the California Solar and Storage Association. I've also been asked to register the support of Altadena Energy and Solar, Brighton Solar, White Pine Renewables, JKB Energy, Citadel Roofing and Solar, Altadena Energy, Solar Technologies, Calcom Energy, HES Renewables, Simply Solar, Sunlight and Power, Solar Gain West, Baker Home Energy, Local Government Sustainable Energy Coalition, James Irrigation District, Camarosa Water District, Linda County Water District, and the Natomas Central Mutual Water Company. Thank you. Any more? That's it. Okay. Thank you very much. There are more. I'm just going to give you an edited group. Thank you. Good afternoon, Mr. Chairman. Alberto Tirico, on behalf of Only Sudden, in support. Thank you. Mr. Chair and members, Ian Puddy with the School Energy Coalition, in support, and thank you very much. Thank you. Good afternoon. Alan Escarra working resident of Sacramento in support of AB 2389 Thank you Good afternoon My name is Lauren Deutsch and I stand in strong support of AB 2389 on behalf of Sierra Club California, Sacramento Climate Coalition, San Francisco Physicians for Social Responsibility, Peninsula Interfaith Climate Action, Alliance for Nurses for Healthy Environments, Recult Energy, Santa Clarita Valley Eco Alliance, and the U.S. Green Building Council. Thank you. Thank you. Good afternoon. My name is Kron Mason, speaking to support AB 2389 on behalf of Great Alternatives, Actera, Self-Help Enterprises, ActNow Bay Area, and San Diego 350. Thank you. I only have one. Keshav Kumar with Lighthouse Public Affairs on behalf of the City of Fresno, in support. Thank you. Chair members, Gile Dentist with FUMO and Strategies on behalf of a San Diego community power in support. Thank you. Teresa Lavoie, I live in Somerset, which is in El Dorado County, and I fully support AB 2389. Thank you. Thank you. Dean Walker, Sebastopol, California, homeowner and solar energy consultant in support. Thank you. Kim Craig with Arc Strategies on behalf of QSELS in support. Thank you. Jerry Levine from San Jose, and I support 2389. Thank you. Stan Lander from Nevada, California, homeowner and rooftop solar owner, and I'm in support of the bill. Thank you. Hello, I'm Kayo. Glad to meet you. Thank you for listening to us. I'm a solar homeowner that wouldn't have solar unless PG&E smart meters had burned down half my house and the insurance paid for my solar. So I'm very much in support of this because my taxes have gone up. Thank you. Thank you. Good afternoon. I'm Steve McNeese-Hurst. I live and retired in Dublin, California, and I support the bill. Thank you. Good afternoon. My name is Alfred Tetzner. I live in Pacifica, California. I urge you to please pass AB 2389. Thank you. Thank you. Good afternoon. I'm Kay Tetzner of Pacifica, California, and I please ask you to vote in support of this bill. Thank you. Thank you. Hello, my name is June Dansell from Solano County, and I support AB 2389. Thank you. Thank you. I'm Clay Newman. My family and I live here in Sacramento, and we appreciate the work you do keeping the government working. And we strongly support this bill. Thank you. Thank you. Matt Roman on behalf of the Town of Apple Valley here in support. Thank you. Paul Smith, I live in Oakland, and I'm here in support. Thank you. Lynn Griffith from Oakland, strongly support, 2389. Thank you. Barbara Dubois from Strawberry, in support. Thank you. Carl Wolfersberger of Mill Valley, California, here to support this bill. Thank you very much. Thank you. David Conrad, Oakland, California, in support of this bill. Thank you Donald Honda Sacramento I support AB 2389 Thank you Thank you Rocky Fernandez with the Center for Sustainable Energy in support Thank you. Mike Clemon, Brentwood, California. I have a solar home, and I'm here to represent over 3,000 of my solar customers in the residential market, and I'm in support of 2389. Thank you. Thank you. My name is Heather McLeod from Oakland, California, and I support 2389. Thank you. Thank you. My name is Kathy Schiffer. I'm from Elk Grove, California, and I'm here in support of AB 2389. Thank you. Hello, my name is Mick McGinnis. I'm a property owner with a solar array installed in Placer County, and so I support the bill. Thank you. Scott Kaufman, Howard Jarvis Taxpayer Association in support. Thank you. Any primary witness in opposition to this measure 2389? Hearing and seeing none. Anyone in the room wishing to register opposition to this measure? You have the same right. Seeing and hearing none, bring it back to the committee. Any committee members wishing to have any comments or questions of the author? Yes, Ms. Rodriguez. I just want to thank the author for bringing this bill forward. It's a good step in addressing affordability, so thank you. Yes. And yes, Ms. Sanchez. I also want to thank the author for advocating for affordability. I'd like to be considered for a co-author. Thank you. And I want to make sure on record, you did say that you would accept the amendments. Yes. Thank you very much for that. Ms. Irwin and former chair of this committee, thank you very much. Appreciate your service. And you may close if you wish. Thank you very much, Chair. As Speaker Riva said in his inaugural speech on affordability, we must elevate California's working and middle classes by enacting practical measures, measures that will lift the economic burden that they face, and AB 2389 does exactly that by promoting affordable energy for Californians all throughout the state. With that being said, I respectfully ask for you to move this bill off suspense at the appropriate time. Thank you very much. Thank you very much. He quoted our speaker. Thank you. This bill will be referred to our suspense file, and thank you very much to your witnesses for appearing and testifying. Thank you. Next up, we have file item number 11, AB 2444, Ms. Rodriguez. We're almost done. And you may commence when ready. Thank you, Mr. Chairman and members of the committee. Before turning to the substance of the bill, I want to state for the record that I sincerely appreciate the thoughtful work of the committee that has brought this measure to current form. After AB 2444 takes two meaningful and forward looking steps to confront the college affordability crisis facing families across California First AB 2444 aligns California tax law with recent federal changes allowing eligible rollovers from qualified tuition plans into Roth IRAs, ensuring families are not penalized for planning ahead and adapting to life's uncertainties. Second, AB 2444 establishes a new state income tax deduction for contributions to scholars share 529 accounts, empowering families to invest early and consistently in their children's futures. Members, we know that access to higher education remains one of the most powerful pathways to upward mobility, economic independence, and the fulfillment of the American promise. At its core, the bill's about strengthening that promise, giving families the tools to plan, to save, and to believe that opportunity is within reach for the next generation. It's our responsibility to stand with working families, to expand access to opportunity, and to ensure that doors to higher education remain open, not just for some, but for all. With me to testify is Cassandra DiVendero, the Executive Director of Scholar Share 529, and Stanley Zito from the Treasurer's Office, here to answer technical questions. Thank you very much. You have two minutes. Thank you. Good afternoon, Chair and members of the committee. I'm Cassandra DiBenedetto, Executive Director of the Scholar Share Investment Board, which administers the state's 529 program housed within the state treasurer's office. Scholar Share 529 was created to help families save in tax-advantaged way for higher education. Unfortunately, however, state law has not kept up with our ability to help families in the way that federal law has. This bill does two key things. It incentivized families to save through California's own 529 plan by offering a limited tax deduction on contribution and aligned state law with federal law to permit unused 529 funds to roll over into a Roth IRA for retirement savings. This bill is about supporting economic mobility. ScholarShare 529 has found in the last few years a significant decrease in household income amongst family savings through our plan. This includes a 19% decrease in household income in the last six years for family savings for a newborn child. A tax deduction is a critical motivator to support low-income and middle-class families in this process. In addition, a tax deduction would bring California in alignment with most states who offer a tax incentive. We are one of only four who do not. strengthen California's commitment to financial literacy education by encouraging savings through the plan, and provide a unique benefit to families who participate in our separate CalKids program, which offers a scholarship to newborns and low-income students. Those participants are encouraged to save through their own in the ScholarShare 529. Additionally, this provision in AB 2444, allowing funds to roll over into a Roth IRA, is critically important in supporting families on their lifelong financial journey. While not everyone may pursue college, everyone will need to retire. We should not penalize our low- and middle-income families for savings, but work to ensure they stay saving. AB 2444 strengthens California's commitment to financial security and its critical policy measure to support families in their personal savings. For these reasons, we thank the author's office for bringing this measure forward and ask for continued support. Thank you very much. Next witness, two minutes. Thank you very much. Anyone in the room wishing to speak in support of Assembly Bill 2444, please line up to the microphone and speak. Hearing and seeing no one moving. Okay. Primary witnesses. Opposition, please come forward. And you have two minutes. Thank you. Good afternoon, Mr. Chair and members. Joanne Betancourt on behalf of SIFMA, the Securities Industry and Financial Markets Association. SIFMA is a national trade association made up of broker-dealers, investment banks, and asset managers. SIFMA has an opposed unless amended position on the bill today. We completely agree with the goal of the bill to advise people to save early and often for education. However, we believe that AB 2444 should apply to all qualified financial, qualified tuition plans, not just the state-sponsored plan. There are many reasons why people would select a particular 529 plan. One is the plan's past performance. The other is the investor's risk tolerance. One is fees that are charged. And most importantly, the ability to work with a trusted advisor. Giving the state's plan preferential tax treatment over all qualified 529 plans really limits investors' choice because it makes the driving factor to where the deduction is versus what plan might be best suitable for the saver's overall needs. We believe that incentivizing people to save early and often for all qualified 529 plans is a better public policy for people to invest in whatever investment they see fit. There are currently nine states that offer a deduction for both private and state-sponsored plans, so we think this is doable. And so for these reasons, we respectfully oppose the bill unless it's amended. Thank you. Thank you very much. Anyone in the room wishing to speak in opposition to Assembly Bill 2444, please come forward. Hearing and seeing none I want to bring it back to the dais Any members Hearing and seeing none Ms Rodriguez you may close I disrespectly ask for aye vote when it appropriate Thank you. Thank you very much. This bill will be referred to our suspense file. Thank you very much to witnesses for appearing. Thank you. Our last final bill for this evening, and as she's moving, our vice chair is moving swiftly to take a seat. and that is file number 12AB1550. We'll invite her witness to join us, join her at the table. Yes. And you may start when ready. Thank you, Mr. Chair and members. I appreciate the opportunity to present AB1550. This bill is simple. If you're working harder, you should be able to keep more of what you've earned. Right now, federal law recognizes that tips in overtime aren't extra. They're essential income for a lot of working people, and California should do the same. AB 1550 allows workers to deduct qualified tips in overtime from their state income taxes, putting real money back into the pockets of the people who've earned it. For many families, that extra shift or those tips aren't a bonus. They are how they cover rent, groceries, childcare, and gas. We shouldn't be taxing people more because they are working harder. This bill is about fairness. It's about affordability, and it's about respecting the effort of working Californians who are doing everything right and still struggling to keep up. With me today is Scott Kaufman from the Howard Jarvis Taxpayers Association. Yes. Thank you very much. You have two minutes. Thank you to the chair, members, and the assemblywoman for giving me the opportunity to speak. Again, for the record, I'm Scott Kaufman, the legislative director for the Howard Jarvis Taxpayers Association. And I'm here today in support of AB 1550, which would allow Californians to deduct qualified tips and overtime compensation from state income tax. These deductions are available even if a taxpayer takes the standard deduction, ensuring accessibility for working families who typically do not itemize. This measure would align California law with federal tax provisions and in turn simplify the tax filing process. Californians currently must navigate different federal and state rules for the same income. AB 1550 would help reduce that complexity and confusion for taxpayers. More importantly workers keeping more of their earnings means spending more money in their communities Simulating local economies means supporting small businesses Hard work should not be penalized by further taxes Again the Howard Jarvis Taxpayers Association in proud support of AB 1550 and urge your yes vote at the appropriate time Thank you Thank you very much. Anyone in the room wishing to speak in support of AB 1550, please come to the microphone, your name, your organization, and this support. Good afternoon, Chair and members. Jennifer Tannehill with Aaron Reed and Associates on behalf of the California Society of Enrolled Agents. In support of SB 1550, the enrolled agents support conformity measures that benefit the taxpayer and streamline filings. So we thank you for bringing this measure forward. Thank you very much. Next. Hi, David Ball, I guess, is the Alliance, also an IBEW member, which we are affiliate of the AFL-CIO. and I can attest that most of our members do support this legislation. Thank you. Thank you very much. Primary witness in opposition to this measure, please. Any primary witness in opposition? Hearing and seeing none. Anyone in the room wishing to speak in opposition to AB 1550? Come to the microphone. Hearing and seeing none. I want to bring it back to the dais. Yes, Mr. Carillo. No, no, Carillo. I'm sorry. I was looking at something else. Go right ahead, please. Mr. Carillo. Thank you, Mr. Chair. I do have a statement that I wanted to make, but rather than making that statement, I want to ask a question, and that question is, do any taxpayer would benefit from this measure, those that have an ET number, ITIN? because, as you know, they did obtain that number so they could report their income taxes. But I don't know for sure if in your measure does any taxpayer benefit, and I would ask that anybody that pays their taxes, those that report their taxes, not with a Social Security number but with an ET number, would they qualify for this measure? Sure. So we are looking at that with the Legislative Council to clarify. but currently the bill's intent fully is just to align with the federal law as it's written now. Well, that's the question, because if it's going to align with federal laws, as we know, the current administration is not very friendly to those that look like me, because we do come here to work. There was a process at a time when an ET number was assigned for those that wanted to comply with the law In California they were assigned an ET number and I believe that they also used it to do their federal income taxes If the measure is that it's only to comply with federal law, I would ask that we consider, if you would consider, making sure that those that pay taxes, whether it being through a social security number or a legally assigned ET number, that they also benefit from your proposal, again, because they do pay taxes as well, just like I did. That's my concern, and I just wanted to ask if that's something that you would consider. Happy to consider, especially as a minority myself, I understand what you're saying, and happy to consider that. Thank you. Thank you, Mr. Chair. Thank you very much. Appreciate your question, and you may close if you wish. Thank you so much. I respectfully ask for an aye when appropriate. Thank you very much. And this item is a suspense item candidate. Thank your witness for appearing as well. Thank you. Let me just check. I think we have checked all the boxes and we have completed all the business as before the revenue and taxation committee and this committee stands at adjourn thank you Thank you. Thank you.