August 26, 2026 · Local Gov · 3,154 words · 7 speakers · 81 segments
Thank you. Thank you. the public in person and we are holding our committee meetings here in the O Street building. I ask all members of the committee to be present in room 2200 so we can establish our quorum and begin our hearing. We are hearing today SB 226 by Senator Cabaldon and SB 594, Senator Padilla, on a referral pursuant to Senate Rule 29.10d. These bills were significantly amended in the assembly so the Senate Rules Committee returned the bill to committee to hear those changes. Before we hear our presentation we'd like to have a quorum but we see we don't have a quorum yet so we will start as a subcommittee. With that I want to welcome Assemblymember Senator Cabaldon.
Good morning, and you may proceed. Good morning. Thank you, Madam Chair and members, for the opportunity to present SB 226, which was substantially amended in the Assembly. SB 226 makes a straightforward, small, but actually quite consequential change to the existing infrastructure revitalization financing districts. As this committee is well aware, there are millions of different kinds of what seems like millions of different kinds of tax increment financing districts. Infrastructure revitalization districts are not well known, but they can provide an important alternative in very specific situations. SB 226 simply clarifies that commercial uses which are currently authorized in the law does include entertainment and sports facilities, which are by their nature commercial. Infrastructure revitalization financing districts allow local communities to fund major infrastructure and development proposals using the new tax revenue that's generated solely because of the project that is built. So, importantly, they do not divert money from the general fund or for other revenue purposes in a community. And, in fact, because they simply deal with the increment, they increase overall economic development and taxing capacity in the communities in which they sit. When a community is putting together an infrastructure revitalization project for hundreds of millions or billions of dollars, that kind of investment requires certainty for it to occur. That's why SB 226 is before you not that it makes a substantive change in the law But to make it absolutely clear so that there's no uncertainty from future litigation that maybe commercial isn't entertainment Which it is in every other context SB 226 seeks to solve this it's not pure that in this case It's not a theoretical exercise SB 226 was was amended in the in the in the assembly Because we have a lot a live project the city of Sacramento of West Sacramento is is taking the lead for California's proposal for the next expansion team for Major League Baseball. Major League Baseball has announced that they intended to consider two new expansion teams, one in the West and one in the East, and the principal California proposal is from the Sacramento region, which, as I know the chair is aware, is currently home to the Sacramento A's as well as the Sacramento Rivercats AAA team. And the City of West Sacramento through the use of this infrastructure revitalization district instrument as well as others Is in a position to be highly competitive With private sector partners in the region in the battle with other states to bring that expansion team to California So by solidifying that legal foundation for the projects It would allow us to move forward both locally but statewide with our expansion proposal and bring economic benefits to the local community but also to the region and to the state of California as a whole. With me in support of the bill is the city manager of the city of West Sacramento, former president of the California Association of Local Economic Development and probably one of the state's number one whiz kids. He's worked for the city for a long time in the domain of infrastructure finance and tax increment financing, Erin Laurel.
Good morning.
You will have a couple of minutes.
Good morning. Good morning. I will keep it actually very brief. Good morning, Madam Chair and members of the committee. Thank you for that introduction, Senator McBaldon. Always too generous. He did a great job of summarizing the bill and its purpose and importance to our city and really to the broader context of economic development in California for these types of projects. Our city, as you know, has been involved in developing this proposal. It's extremely important to our financing plan and in our discussions with our private sector partners to have this clarification. So it's a minor change to the existing law, but a very important one going forward for projects like this as we try to bring a Major League Baseball team back to California. So with that, I'm here to answer any questions you have and urge your aye vote. Thank you.
Thank you. Thank you very much. Anyone else Is that it for your principal witnesses Yes Okay So anyone here in support of SB 226 please come forward Good morning Ross Buckley on behalf of the City of Sacramento in support
Thank you.
Anyone else in support? Seeing none. Anyone in opposition? Okay. Seeing none. To the dais, any questions or comments from our members? Senator Trump?
Yeah. Thank you for the introduction. introduction and looks sounds like it's a necessary measure but can you explain once again what the specific major amendments took place at this assembly yes thank you senator so the
the assembly amendments remove the prior version of contents of the bill and instead insert this this amendment to clarify what existing law so existing law says that a local jurisdiction may an infrastructure revitalization district in order to make investments in infrastructure and in projects that are a long list of what qualifies. One item on that list are commercial and industrial facilities and that commercial facilities do include sports and entertainment. That's what what they are but the the language simply adds including sports and entertainment facilities so that it's absolutely clear that there's not a legal ambiguity that would result in litigation and in part because you know this will be a competition with other with other other states and other places and we want to minimize the likelihood of mischief that would then potentially threaten the entire financing for the project if and when somebody investor comes along and we don't need this public funding through this IRFD and we'll invest our own money and then what happens? If the investor, so this will not by itself fund the whole Major League Baseball project. This is one component of many, as I know in your own city as mayor, you've done many projects like this as well. So there will be any professional sports franchise does require many and many large private sector investors, and that will be the case for this project as well. These are private sector enterprises. But the infrastructure associated with them and some of the core elements of the project typically do involve public sector investment because they generate substantial economic activity beyond the project itself. And so this will allow for the certainty both for two kinds of investors. One is the investors that are purchasing the infrastructure revitalization district bonds, that they know that when they purchase those bonds, the bonds themselves will be protected from potential litigation in this particular area. And then second, for the private sector investors in the project or in the team itself, that they will know that if they commit to making their investments of hundreds of millions or billion dollars, that this component of the infrastructure financing will also be secure.
That clears my question, and when time comes, I would love to make a motion.
Okay. Senator Choi makes a motion. Establish a quorum first. Okay. We want to establish a quorum. Senators Durazo?
Here.
Durazo here.
Choi?
Here.
Choi here.
Araguin? Ashby?
Cervantes?
Here.
Servantes here. Laird? Laird here. Cigarto?
Okay, we've established a quorum. Just one question. I think I know the answer. But this bill would not limit it to a particular project right now. And for how long would this be available to you?
Just to clarify. That's correct. It would not be for a specific project. The IRFD tool is available across the state of California now. It would not limit the duration of the use of that tool. I will say that once you establish one of these districts, you have 40 years to collect the increment on it. So that's the only limitation.
Okay. Okay, great. All right. If there are no questions, we don't mind the competition in L.A. It's good for us. So wish you all the luck. Wish you all the luck. So with that, we have a motion by Senator Choi. We'll call the roll. I'm sorry. Closing remarks.
Simply ask for an aye vote. Thank you very much, Madam Chair.
Okay, go ahead. The motion is that the Assembly amendments be concurred in. Senators DeRazzo?
Aye.
DeRazzo, aye.
Choi? Aye.
Choi, aye.
Aregine? Ashby? Cervantes? Aye.
Cervantes, aye.
Laird? Aye.
Laird, aye.
Saygarto?
4-0. Okay. Thank you. Thank you. Bill is on call. Thank you very much. Thank you for your testimony. Next, we have... Do we have... We have one more bill. SB 594. Any sense? Thank you. Thank you. Thank you Thank you. We will convene in a few minutes on recess now.
Good morning, Madam Chair, members.
Okay. We will now hear from Senator Padilla on SB 594. You may proceed.
Thank you, Madam Chair, members. Thank you for your patience. Pleased to present. this bill would allow federally recognized Indian tribes to receive the same information from short-term rental facilitators currently provided to city and county governments. You know, under current law, local and county governments can enact ordinances that require such disclosures to provide key information such as addresses, zip codes, market dynamics, short-term rental properties that exist in their markets and jurisdiction. It's used by city and county governments to help facilitate the collection of their transient and occupancy taxes. However, short-term rental properties are not only located within jurisdictions of city and county governments at some smaller scale, they also exist on tribal lands. Tribes have the authority, as you know, to enact and administer TOT on their properties, but current law excludes them from receiving the same information in short-term rental facilities that is provided to city and county governments, specifically alignment and enforcement. They cannot access or compel the production of such information in state court, and that is the distinction. That is why we have the need for a state statute. Without access to this information, these governments have a more difficult time administering. Of course, as you well know, these revenues are really important for essential tribal services, including safety, environmental protection, fire, and emergency response. It extends existing law that I know the chair is familiar with, ensuring that tribal governments have the same powers that cities and counties have under Short-Term Rental Facilitator Act of 2025. Here with me today is Nick Brokaw, partner in Sacramento
advocates. Thank you very much. Welcome. Good morning. You have two minutes, please.
Good morning, Madam Chair and members. Thank you very much. Nick Brokaw here with Sacramento advocates on behalf of the Agua Caliente Band of Cahuilla Indians. Of course, we want to begin by thanking the Senator for bringing this bill forward as he notes it's fundamentally about parity and fairness. Under the leadership of Madam Chair, of course, current law allows California city and county governments to receive limited information, such as the address of a property from short-term rental facilitators. This information is vital for city and county governments to impose and administer transient occupancy taxes on those short-term rental properties located within their jurisdiction. Of course, as the Senator just noted, short-term rental properties aren't just located in the jurisdictions of city and county governments. They also can be located on tribal land. And while federally recognized tribes do have the right to administer and enact these taxes on lodging facilities located on tribal lands, state law currently excludes tribes from receiving the same information from short-term rental facilitators that can be provided to city and county governments. As a result, it's much more difficult for tribes to receive the information they need to administer these taxes for these properties. And, of course, these taxes generate revenue that's vital for essential government services. including public safety, fire and emergency response, infrastructure, environmental protection, and tourism management. These services benefit the reservation community, consisting of both tribal and non-tribal members, as well as visitors to the state of California. SB 594 would only apply to federally recognized tribes located in California, and only when the tribe imposes a transient occupancy tax. It does not expand regulatory authority or alter jurisdictional boundaries. It simply recognizes tribal governments for purposes of administering a tax function that's the equivalent to that of city and county governments. As the bill promotes parity, fairness, revenue, integrity, and advances California's policy of cooperative intergovernment relations, on behalf of Agua Caliente, I respectfully ask for your support today. Thank you.
Thank you very much. Any other principal witness?
I have no others.
Okay. Anyone else here in support of SB 594? Okay. Is there anyone in opposition to SB 594? I see none. Bring him back to the dais.
I would move the bill.
Senator Laird moves the bill. Any questions? Senator Choi, questions, comments?
Yeah, I would support that. That sounds like that's a necessary measure. But as you stated, the Indian tribal government has their sovereign right to enact their taxation regulations and the power to collect DOT taxes. And now this bill, as I hear, is that local government, non-tribal government, needs to collect the data of TOT located within the tribal land. And if that is the case, my understanding is that the non-tribal government nearby would not have any power to collect the tax from the tribal land. Can you clarify what I'm misunderstanding?
Sure. So Vice Chairman the way this works we talking about short rental facilitator properties that are located only on tribal land
Yeah.
So in the case of Agua Caliente, we have 34,000 acres of land. Our reservation runs through a couple different cities, but we're talking about properties located exclusively on tribal land. So this would provide the tribe the right and the ability to ascertain that information that they need to collect and ultimately levy that tax. So it doesn't infringe upon any abilities of another local government in a similar or nearby jurisdiction to do the same.
Here, policy analysis opposition position states that federally recognized tribes possess inherent sovereign authority to tax and regulate activities within their jurisdiction, including the authority to impose transient occupancy taxes. This bill will nevertheless place the state legislature in the unusual position of establishing procedures governing how tribal governments obtain information and enforce tax-related requirements against short-term rental facilities. facilities. That's what it says.
Yes. So I think a couple different points here. So tribes have the ability to assess and levy a transient occupancy tax. This bill doesn't change that, doesn't impact that. Tribes have the ability to pass a local ordinance just as a local city or county government possesses that same right to do that. The issue is that a tribal government right now can't always track down the information they need to collect and ultimately assess that tax. So a city or local—
I mean, that's their business, isn't it? The tribe? If they are able or unable, why do we have to bother?
Madam Chair, maybe I can help. Yeah, and I could add an answer to that, too, as well, but you go ahead and answer that.
Madam Chair, thank you.
Excuse the interruption to my witness. Senator DePribe, perhaps there is no registered opposition on this bill.
I think the point of this bill does not deal with the ability of tribal governments to assess, which they have in their sovereign power. This is about their ability to operationally collect the data they need to formulate those TOTs when they seek to implement them. And the absence of that data makes that very hard. The reason we need a state statute and we need a bill here is we need to be able to align that parallel to the tribal government's function and to their ability to compel the production of that, if it becomes necessary, in a state court. And in order for them to do that in a state court, they need state legislation. So that is the distinction. This bill has nothing to do with the tribal government's sovereign powers to assess or formulate that as sovereign to the tribal governments. This is about the ability of them to compel the production and functionally be able to access that information in an operational way, sort of an unintended consequence, and we're trying to address that in this bill.
Okay, thank you.
Thank you, Madam Chair. Thank you. Any other questions or comments?
Aye.
Senator Laird made the motion. You can proceed. Oh, I'm sorry. Closing remarks.
Respectfully ask for an aye vote. Thank you.
The motion is the assembly amendments be concurred in. Senators Durazo?
Aye.
Durazo, aye.
Choi?
Aye. Choi, aye. Aragin, Ashby, Cervantes
Cervantes, aye. Laird Laird, aye. Sayarta
4-0
Thank you, Madam Chair, members
The bill will remain on call Thank you very much for being here
Thanks
Recess Local Government Committee will go on recess To vote. File item number one, SB226. The motion is that the assembly amendments be concurred in. Senators Adayin, Ashby, Sayarto?
Aye.
Sayarto, aye. Five-zero? The bill remains on call. Thank you. File item number 2, SB 594. The motion is that the assembly amendments be concurred in. Senators Aragín, Ashby, Sayarto?
Aye.
Sayarto, aye. 5-0. Thank you. The bill remains on call. We will be on recess. We are reconvening local government committee and opening the roll to first SB 226. This is file item number one, SB 226. The motion is that the assembly amendments be concurred in. Senators Aragin?
Aye.
Ashby? Aragin, aye. 6-0? 6-0. The bill is out. File item number 2, SB 594. The motion is that the assembly amendments be concurred in. Senators Aragon?
Aye.
Aragon, aye. Ashby? 6-0. Bill is out. And we're done. Thank you, Senator. Thank you to all the individuals who participated in public testimony today. If you were not able to testify, please submit your comments or suggestions in writing. to Senate Local Gov Committee or visit our website. Your suggestions and comments are very important to us. Thank you to everyone for your patience and cooperation. We've concluded the agenda. Senate Local Gov Committee is adjourned.