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Committee HearingAssembly

Assembly Revenue And Taxation Committee

June 15, 2026 · Revenue And Taxation · 5,628 words · 16 speakers · 83 segments

Chairman Mike Gipsonassemblymember

Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. I want to say good afternoon and welcome to the hearing on the Assembly Committee on Revenue and Taxation. We will be calling. It's order. We'll be acting as a subcommittee. I want to go over a few housekeeping items. Before we take up bills on the agenda, I want to address a few housekeeping items. First, I would like to remind advocates who submit the position letter one week prior to the hearing in order for your organization position to reflect on in the bill analysis. Also, I want to remind everyone that our committee has a suspense file, and the details about the process is spelled out on the committee's rules posted on the website. In summary, bills with a revenue impact of more than $150,000 will not be eligible for a vote immediately after the presentation. Instead, it will refer to our suspense file. According, accordingly, three of the bills on today's agenda are suspense candidates. And they are as follows. File item 1, SB 881. File item number 2, SB 1406. File item number 4, SB 1249. All other items will be voted on today, including the two committee bills are proposed for consent. The proposed consent items are file item number 6, SB 1436, file item number 7, SB 1437. With that being said, we don't have a quorum, so we will again act as a subcommittee. We see our first, we see Senator McNerney here, would you please come and have a seat? That's file item number one, SB 881 And Senator, you have your two witnesses here I want to remind your witnesses You have two minutes each to make your presentation And Senator, welcome And you may begin when you are ready, sir

Chair Gibsonchair

Thank you, Chairman Gibson Distinguished members of the committee I'm here to present SB 881 The Farmers, the Food Bank, Tax Credit This is a feel-good bill Rising grocery prices have made it harder for families to afford basic nutrition. Today, one in five California families experiences food insecurity. Food banks are a critical lifeline for struggling families, providing staples to millions of Californians. HR1 cuts to CalFresh have placed additional demands on food banks. At the same time, California is the nation's leading agriculture producer, growing half of all the vegetables and three-quarters of the nuts and fruits. The California agricultural sector is so productive that there is a surplus of products. SB 881 ensures that surplus agriculture products aren't wasted and instead help feed Californians in need. Specifically, S-881 extends the Farmer to Food Bank tax credit through 2032. It extends the Emergency Food for Families voluntary tax contribution through 2033. This is a win-win. Here to testify is Josh Wright of the California Food Banks and Louis Brown representing several agricultural organizations. Josh?

Josh Wrightwitness

Good afternoon, Chair and members. The California Association of Food Banks represents 43 food banks that partner with over 6,000 organizations across the state with the mission of ending hunger in California. SB881 extends the sunset on two important programs, the Donated Fruit and Vegetables Tax Credit and the Emergency Food for Families Voluntary Tax Contribution Fund. The Donated Fruit or Vegetables Credit, often called the Farmer to Food Bank Credit, gives farmers a 15% tax credit for donating California-grown food to food banks. This credit helps farmers cover the cost of donating food that might otherwise have gone unharvested, which prevents unnecessary food waste, in turn reducing the formation of greenhouse gases like methane that fuel climate change. It also ensures that high-quality food, including fresh fruit, vegetables, and nuts, reach Californians who need it most. SB 881 also extends the Emergency Food for Families Voluntary Tax Contribution Fund, which allows Californians to donate a portion of their tax rebate to food banks. Californians typically donate a little bit less than half a million dollars a year to our food banks through this fund And in times of crisis like the COVID pandemic these donations have greatly increased Our network is currently serving a record-breaking 6 million Californians per month. And brand new data from the Urban Institute shows that a shocking one in four Californians were food insecure in 2025. This is before the full implementation of H.R.1, which caused hundreds of thousands of Californians to lose food assistance starting this year. More Californians than ever are turning to our food banks for assistance, and this bill will help us meet the increased need of our communities. SB 81 supports farmers, reduces food waste, fights climate change, and helps Californians get food in need. And it's for these reasons that CAFB is proud to co-sponsor SB 881 along with Californians Against Waste. We are your aye vote.

Chairman Mike Gipsonassemblymember

Thank you very much. Next witness.

Louis Brownwitness

Mr. Chairman, members of the committee, Louis Brown here today on behalf of a large number of agricultural organizations, including the American Pistachio Growers, the California Avocado Commission, the California Rice Commission, the California Walnut Commission, the California Fresh Fruit Association, California Citrus Mutual. All of these organizations represent farmers throughout the state of California who have the great honor of growing some of the finest fruits and vegetables and nuts and rice in the world. And yet there are people in the state of California who don't have access to them. And the tax credit that is made available through the existing program provides that opportunity. There's still cost borne by farmers when they're dealing with unmarketable or surplus foods. And this tax credit helps alleviate that cost, allowing them to partner with local food banks and donate that food for the good of those communities. Extending this tax break through 2032 seems to be the right thing to do in light of current costs, the economy, and uncertainties that are facing our communities around the state of California. For those reasons, we ask for an aye vote and your favorable consideration when the bill comes off suspense. Thank you, sir.

Chairman Mike Gipsonassemblymember

Thank you very much for your testimony. Anyone in the room wishing to add on as in support of 881 should please name your organization, and this is in support.

Lizzy Guansonaother

Good afternoon, Lizzy Guansona here on behalf of the City and County of San Francisco, Stop Waste and the Office of Cat Taylor in support. Thank you.

Melissa Kosachukother

Good afternoon, Chair and members. Apologies for the late ad. Melissa Kosachuk with Western Growers in support. Thank you.

Chairman Mike Gipsonassemblymember

Thank you.

Will Breger here to support on behalf of two climate groups, 350 Humboldt and Climate Action California. Thank you.

Chairman Mike Gipsonassemblymember

Thank you.

Kayla Robinsonother

Good afternoon, Kayla Robinson with Californians Against Waste, a proud co-sponsor and here in support. I also want to register support for California Food and Farming Network, Second Harvest of Silicon Valley, Elevated by Grace, Farm to People, Next Gen, The Farm League Project, Dr. Bronner's, Families Advocating for Chemical and Technology Safety, Lutheran Office of Public Policy, and San Francisco Bay Physicians for Social Responsibility.

Chairman Mike Gipsonassemblymember

Thank you. Thank you.

Josh Wrightwitness

David Knight on behalf of the California Community Action Partnership Association in support.

Chairman Mike Gipsonassemblymember

Thank you. Thank you very much. Primary witness in opposition to this measure, would you please come forward? Do you have the same right? Seeing none, anyone in the room wishing to register opposition to this measure, you have the same right. Also, seeing and hearing none, I want to bring it to the committee. Any members have any questions for this author? No? I have one question for the author. Would you please, what is the biggest challenge facing farmers in your district?

Chair Gibsonchair

Well I think one of the biggest is a market in the wine grapes at the moment There not much market for them right now I think another issue that they do concern is some of the pesticide regulation, specifically regarding almond production. I think those are the two big ones that come to mind.

Chairman Mike Gipsonassemblymember

Okay. Great. And what motivated you to carry this piece of legislation? What was the impetus?

Chair Gibsonchair

Well, I mean, there's food and there's hunger, and I just don't want to see people go hungry when there's no need for it. We can distribute the food through a system that benefits both sides. So it's kind of a no-brainer to me, Chairman.

Chairman Mike Gipsonassemblymember

Thank you very much. And you may close if you wish.

Chair Gibsonchair

Well, I respectfully ask for an aye vote.

Chairman Mike Gipsonassemblymember

Thank you very much. This bill will be referred to our suspense files. I want to thank your witnesses for coming. I thank the author for bringing this measure before us. Thank you very much. We also have file item number, file item number two, SB 1406. And Senator, the floor is yours, and your witness has two minutes.

Chair Gibsonchair

Well, I thank the chairman for allowing me to do both of these in a row so I don't have to come and go.

Chairman Mike Gipsonassemblymember

Appreciate that. Absolutely.

Chair Gibsonchair

I'm here today to present SB 1406, which will close the so-called Montana tax loophole. SB 1406 is a piece of legislation that will increase state revenues by up to $20 million a year without raising taxes. It also won't cost the state a dime to implement, plus it will help restore some fairness to our tax system. Sounds pretty good, huh? Some of you may have heard of the Montana tax loophole. It's been in the news recently. It's a scheme to avoid paying California taxes and license fees when you buy expensive cars in some other states, and RVs and other equipment like that in other states. It works like this. A wealthy California residence creates a phony shell company to buy exotic luxury cars like Ferraris and Porsches in Montana to avoid paying California sales taxes and fees. The scheme cost California about $20 million a year in lost revenue. California's Attorney General's Office recently completed a criminal investigation of Californians who exploited the Montana loophole to buy $20 million worth of expensive cars in Montana to avoid paying nearly $2 million in California taxes. The investigation took years to finish because these cases are difficult for tax collectors and law enforcement to investigate. That's because the shell companies used in these schemes have no assets, and they hide the identities of the owners behind these shell companies. SB 1406 will strengthen California law by making it easier to go after the people behind these tax avoidance schemes. SB 1406 received bipartisan support in the Senate and has no registered opposition. Now I'll return it over to my witness.

Chairman Mike Gipsonassemblymember

Thank you very much and welcome.

Josh Wrightwitness

Mr. Chairman and members, Terry Brennan, I'm half of SEIU California. I don have a whole lot to add to the Senator presentation other than make sure we recognize these are not normal people These are not they not registering minivans and Teslas up there These are half a million dollar cars, five hundred thousand dollars and above giant vehicles that are very costly. They also happen to avoid their smog registration by registering it in Montana as well. It's a small amount. It's just closure of a tax loophole we need to make sure happens. So for that reason, SEIU is in support.

Chairman Mike Gipsonassemblymember

Thank you very much. Anyone in the room wishing to register their support for this measure, 1406, please come to the microphone, your name, your organization, and this is support.

Louis Brownwitness

Michelle Warshaw, California Teachers Association, in support.

Chairman Mike Gipsonassemblymember

Thank you. Seeing anyone willing to, were you coming to? Okay. Anyone in opposition, primary opposition, please come and have a seat at the table. We're not in opposition. Yes. And welcome, and you have two minutes. You may start when ready.

Matty Hyattother

Get my notes up. All right. Good morning, Chair and members. My name is Matty Hyatt with the Capital Business Alliance. We respectfully oppose the new shell company rule in SB 1406 unless amended. I apologize. We submitted a late letter just today. We understand the policy goal. California should be able to pursue true sham entities created solely to avoid vehicle vessel aircraft use tax. But the new shell company language goes too far, and we feel that it risks placing legitimate California small businesses in jeopardy. Many small businesses are single-member LLCs, family entities, holding companies, consultants, and investment entities. They may not have W-2 employees. They may not have a traditional out-of-state office. They may use a registered agent or a home office. Those facts alone should not become evidence that the business is a sham. The most troubling part is personal liability. The bill could expose members, partners, managers, officers, or beneficial owners to tax penalties and interest based on an entity's alleged shell status. This is a major piercing of limited liability protections, especially for passive or minority owners who may have no direct knowledge or control of the purchase. We're not asking the legislature to protect tax evasion. We are asking for precision. Please amend the bill to require actual participation, control, or knowing benefit before personal liability imposes. Protect passive and minority owners and clarify the lack of W-2 employees or a physical office is by itself not enough to prove shell company status. For these reasons, we respectfully oppose the new shell company rule unless amended. Thank you very much.

Chairman Mike Gipsonassemblymember

Anyone in the room wishing to speak in opposition? Name, organization, and this is opposition. From the audience, hearing and seeing none, bring it back to the committee. Any members wishing to? Okay. Senator, you may close if you wish.

Chair Gibsonchair

Well, again, I thank the committee for hearing this bill, and I respectfully ask for an aye vote.

Chairman Mike Gipsonassemblymember

Thank you very much. Again, we don't have a quorum as of yet, and as soon as we have a quorum, an established quorum, we'll be taking this matter up. And this is a suspense candidate. So thank you very much. We don't see Mrs. Cervantes. Okay. So we will go. Let me see. We will move with Senator Gonzalez, SB 1349. Item number five, item number five. Thank you very much. Thank you. And welcome. And your witness, I want to remind your witness, you have two minutes.

Melissa Kosachukother

each and welcome Ms. Senator Gonzalez. You may begin when ready. Thank you, Mr. Chair and members. I want to begin by accepting the committee amendments and thanking the committee staff for their excellent work. Thank you very much. I'm here today to present SB 1349, which will direct the legislative analyst office to do a review of our state's greatest tax expenditures. As we all know, California spends approximately $94 billion annually through over 100 different tax expenditures. Unfortunately, many of these programs, we have very little insight to whether they're actually working, and even any data as whether it is working for the average Californian. And since 2014, every new tax credit is required to define its goals and metrics to determine if it met those goals. While the Department of Finance tracks the cost of those programs, tax credits created before 2014 do not adhere to those standards. And in the face of a structural budget deficit, as we've been talking about this week, of course, cuts and impacts to our most vulnerable residents in California, we need to make sure every taxpayer dollar is accounted for. Testifying in support of the bill today, I have Michelle Warshaw on behalf of the California Teachers Association and Danny Kando-Kaiser on behalf of the California Tax Reform Association. I respectfully ask for an aye vote.

Chairman Mike Gipsonassemblymember

Thank you very much. Welcome. You may proceed. Two minutes. Thank you.

Louis Brownwitness

Thank you. Good afternoon, Chair and members. Michelle Warshaw, legislative advocate with the California Teachers Association and a proud co-sponsor of SB 1349. In 2526, the Department of Finance reports that there were about $94 billion lost in estimated general fund revenue due to existing tax expenditures. These are dollars that would have otherwise gone to the general fund, which we know approximately 40% goes to schools with the Prop 98 minimum guarantee. It's important to note that once tax credits are passed by a simple majority by the legislature, it takes two-thirds vote to repeal them. SB 1349 directs the LAO to analyze the cost and benefits of existing tax expenditures as well as make recommendations to the legislature. Tax expenditures before 2014 were not required to include performance measurement standards. That means these tax credits, which amount to billions of dollars, do not have the level of accountability needed to know whether or not they're meeting their intended purpose and goals. Stepping back and putting this in perspective for the larger California budget, California faces a structural deficit, and the legislative budget plan proposes to underfund schools by $3.9 billion. For every $1 billion reduction to education funding statewide, there could be up to 9,600 fewer educators for our schools. The legislature needs to look up all options to stabilize the budget and prevent cuts in the future. SB 1349 is one of those options. CTA urges your aye.

Chairman Mike Gipsonassemblymember

Thank you. Thank you very much. Next witness.

Danny Kando-Kaiserother

Good afternoon. Danny Kando-Kaiser on behalf of the California Community Land Trust, as well as the California Tax Reform Association, enthusiastically supporting SB 1349. The Land Trust Network is comprised of 27 community land trusts who support the growth of permanently affordable community-controlled land and housing. and the California Tax Reform Association is a nonprofit association of labor public health education and public interest groups which advocates for fair taxes in the healthy public sector California tax system from Prop 13 to Prop 26 is one-sided in the favor of loopholes and tax breaks, and it takes a majority vote to enact a tax break, as my colleague said, and two-thirds vote to remove them. One of the few cases where major loopholes were removed was with enterprise zones. after an in-depth analysis by the California Public Policy Institute showed how these loopholes had been abused and manipulated with no public benefit. The manufacturer's investment tax credit also was abolished after it was shown it did not create the jobs that were promised by the statute. So to remove an unwarranted tax break, whether that is an exclusion, an exemption, or a credit, takes real analytical firepower. our power. And that's what we're asking to happen with SB 1349, which would evaluate some of these billion-dollar tax breaks. If California examines every line item in the budget every year, the least we can do is examine the huge revenue outflow occurring yearly in our tax system. This bill will provide the much-needed evaluation Californians deserve, and we'll show whether these tax breaks are being used correctly and whether they're making a difference, and we urge your aye vote.

Chairman Mike Gipsonassemblymember

Thank you. Thank you very much. Anyone in the room wishes to speak in support of 1349ers, please line up, name, organization, and this is support.

Josh Wrightwitness

Mr. Chairman and members, Terry Brennan, on behalf of SCAU California, representing 750,000 taxpayers in support of this bill.

Chairman Mike Gipsonassemblymember

Thank you very much. Thank you.

Louis Brownwitness

Jessica Hay with AFSCME California, proud co-sponsor of this bill.

Chairman Mike Gipsonassemblymember

Thank you.

Kayla Robinsonother

Sasha Orwitz, Los Angeles Unified School District, in support.

Chairman Mike Gipsonassemblymember

Thank you.

Claire Sullivanwitness

Claire Sullivan, on behalf of the City of Thousand Oaks, in strong support.

Chairman Mike Gipsonassemblymember

Thank you. Thank you. Good afternoon, Chair and members.

Kat Brackmanwitness

Kat Brackman with the California School Employees Association, in support.

Chairman Mike Gipsonassemblymember

Thanks. Thank you. Primary opposition to this measure, please come forward. Hearing and seeing no one walk. Primary opposition?

California School Boards Associationwitness

California School Boards Association in support.

Chairman Mike Gipsonassemblymember

Okay, in support. Sounds good. Primary opposition to this measure? Seeing none. Anyone in the room wishing to register opposition to 1349? Seeing none, I want to bring it back to the committee.

I'd just like to move the bill with appropriate time when we reach quorum.

Chairman Mike Gipsonassemblymember

Thank you very much. At the appropriate time, we have someone moving the bill. Thank you very much, Mr. Carrillo. So with that, thank you very much, Senator, for bringing this bill before us. We haven't established a quorum at the present time, but we will be once my colleagues get here, calling our colleagues, please come to revenue and taxation so we can finish the business.

Melissa Kosachukother

You may close. I just wanted to say thank you, Mr. Chair, and your team as well as Assemblymember. I respectfully ask for an aye vote.

Chairman Mike Gipsonassemblymember

Thank you very much. We'll be taking this matter as soon as we reach a quorum. Thank you both to your witnesses. Thank you very much. And this item will be a vote item. Can we have the sergeant of Arms call the absent members So we looks like we have a quorum. Madam Secretary, would you please call the roll to establish a quorum? Gibson. Here. Gibson here. Sanchez. Carrillo? Carrillo here. DeMaio? McKinner? Here. McKinner here. Quirk Silva? Michelle Rodriguez. Michelle Rodriguez. We have a quorum. Okay. So we have a quorum. Quorum is present. So we just heard file item number one, SB 881, McNerney. We're going to move that item to the suspense file. We heard file item number two, SB 1406, McNerney. We will move that item to our suspense file as well. So we just heard the author of, we heard file item number five, SB 1349, Gonzalez. It was moved by Mr. Carrillo. That was the motion. Is there a second? Second. It's been moved by McKenna. and it will... The motion is due pass as amended to the Assembly on Appropriation. Madam Secretary, please call the roll. The motion is due pass as amended to Appropriations. Gibson? Aye. Gibson, aye. Sanchez? Carrillo? Aye. Carrillo, aye. DeMaio? McKinner? Aye. McKinner, aye. Griff Silver? Michelle Rodriguez? Yes, that bill has passed. That bill is out. We'll keep the roll over for absence members. And we're still waiting for two more additional authors. We have two items on consent. We have SB 1436. Also well file item number six SB 1436 File item number seven SB 1437 Madam Secretary please call the row but oh I sorry Okay Let me just go back I was getting ahead of myself So starting all over for file item number six SB 14 1336 with the motion do pass to the appropriation and file item number 7 SB 1437 with the motion do pass to the assembly floor. It's been moved by Mr. Rodriguez and seconded by Mr. Carrillo. Madam Secretary please call the roll. On the consent calendar. Gibson? Aye. Gibson aye. Sanchez? Carrillo? Aye. Carrillo aye. Demayo? McKinner McKinner I Quirk Silva Michelle Rodriguez Michelle right the consent calendar is the sink the sink calendar has passed we'll keep the role open for absent members and so we're still waiting for authors on from the Senate Richardson and Cervantes yes Yes. Thank you. Thank you. So we open the row for absent members. Madam Secretary, please open the row for consent calendar. DeMaio, Cork-Silva. Cork-Silva, aye. And we have... Item number 5, 1349, that bill has passed. What did you say? Item number 5, SB 1349. Why don't you wait for Mr. Pena? No, let's get her now. Okay. I know, but we can still get her. Okay, so what is it? Item number five 1349 that bill is out on the absentees to mile Kirk Silva Motion was do pass as amended to appropriations 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. Senator, you may approach and have a seat, and you may begin when ready. If you have your witnesses, we welcome them to please have a seat with you. And they have two minutes to present. Thank you very much. Well, thank you. Good afternoon. I'm sorry. We're on file item number four. Let me see. Follow-out number 4, SB 1249, Richardson. So please begin when ready. Thank you.

Thank you, Mr. Chairman and members of this committee. In California, there are 151,000 adults between the ages of 86 to 90. My mom is one of them. She's 88. As Medicare costs have risen by 10% and inflation has increased by 3.3%, while Social Security benefits have only increased by 2.8%, seniors are experiencing economic instability and declining standard of living. Recent federal legislation recognized such financial hardships and implemented a temporary $6,000 senior tax deduction to reduce economic burdens. California should and must take that same similar action to support our senior population. In 2022 alone, 39.3% of Californians aging at the age of 85 and higher or younger live below the 200% federal poverty level. Many elderly individuals relying on fixed or semi-fixed incomes spend a disproportionate share of their income on health care, housing, food, and expenses and are prone to rapid inflation. SB 1249 would help alleviate such economic challenges by easing the tax burden on those least able to absorb these growing costs. This bill would provide senior taxpayers ages 86 to 90 with a $3,000 tax deduction until taxable year 2032. By providing targeted relief, SB 1249 aims to improve the financial stability and independence of older adults amid rising cost of living pressures. With me here to testify is Amber King with The Leading Age California.

Chairman Mike Gipsonassemblymember

Thank you very much. You may begin when ready. Thank you, Mr. Chair and members.

Amber Kingwitness

Amber King with Leading Age California representing nonprofit providers of care, services, and housing for older adults here in support of SB 1249. SB 1249 addresses a growing challenge of financial strain facing older Californians late in retirement Many older adults are facing rising costs for housing health care and daily necessities These pressures make it increasingly difficult to remain financially stable and age with dignity. California's older adult population is growing rapidly. The number of individuals age 90 and older is expected to grow by nearly 140% in the coming years. As this population grows, so does the need for policies that help them remain secure and supported. SB 1249 is a modest step by expanding tax deductions for specified elderly seniors. This targeted relief can help ease financial pressure, improve stability, and support independence for some of the state's most vulnerable and older adults. For these reasons, Leading Age California is strongly in support of this legislation and urge your aye vote. Thank you.

Chairman Mike Gipsonassemblymember

Thank you very much. Anyone in the room wishing to speak in support of this measure 1249, please come forward. Hearing and seeing none. Anyone primary opposition to this measure? Hearing and seeing none. Anyone in the room wishing to speak in opposition? Bring it back to the committee. Ms. McKenna.

Senator, thank you for doing this bill. You're doing the Lord's work here. My parents are in their 80s, and they do struggle. I'm so glad that they live with me now because that set income. My parents retired 15 years ago, 18 years ago, and their money is not going the same way that it did back then. And so thank you for doing the Lord's work. And I would actually like to be a co-author on this bill. Thank you.

Chairman Mike Gipsonassemblymember

Thank you. Wonderful. Thank you very much, Senator. Thank you very much for bringing this bill before us, and you may close.

As a good Senator, I respectfully ask for your aye vote.

Chairman Mike Gipsonassemblymember

Thank you. This item will be referred to our suspense file, so we'll take it up at a later date. Thank you. Thank you for your time. Thank you very much. Have a very good day. Next, we see Senator Sivantes here. We have file item number 3, SB 1151. Senator, welcome. Do you have any witnesses?

Not today.

Chairman Mike Gipsonassemblymember

Okay, you may begin when ready.

Thank you so much, Mr. Chair and committee members, for allowing me to present Senate Bill 1151 today, which is grounded in a simple principle. Infant formulas should be clearly recognized as a food product under California law. This bill will codify the existing sales tax exemption for infant formula and ensure that parents, caregivers, and families continue to receive tax relief when purchasing essential nutrition for their infants. By explicitly including infant formula within the definition of food products, SB 1151 removes uncertainty and protects families from potential future interpretations that could increase costs for those who depend on these products. Current law exempts food products from sales and use tax and includes categories such as milk products and vegetable products. However, infant formula has evolved significantly over the years. Not all formulas are milk-based. Many are made from soy, plant-derived proteins, amino acid formulas, and other specialized ingredients. While some of these products may arguably fall within existing statutory categories, the law does not expressly state that infant formula itself is included. Today, many infants rely on specialized formulas because of medical conditions, severe allergies, metabolic disorder lactose intolerance prematurity or other nutritional needs Some of these products are prescribed by physicians and are essential to an infant health and development Families should not be left wondering whether these medically necessity products qualify for tax exemption based on verifying interpretations of the outdated statutory language. Although the California Department of Tax and Fee Administration has historically treated infant formula as exempt, that treatment is based largely on regulatory interpretation rather than clear statutory direction. Future administrations or legal challenges could create uncertainty where none should exist. Parents should be able to rely on the law itself, not assumptions about how regulations may be interpreted over time. This bill provides that clarity. It recognizes infant formula as an essential nutritional product and ensures that families continue tax treatment, regardless of the type of formula their child requires. Especially at a time when families continue to face rising costs, this bill helps protect access to something that's so vital and necessary in a child's health and development, their survival, their growth. My children were premature. My triplets were premature and also required a very specific type of formula as they developed. With that, I respectfully ask for an aye vote on SB 1151.

Chairman Mike Gipsonassemblymember

Thank you very much. Any primary witnesses or anyone in support of this measure, please come forward. Hearing and seeing none. Any primary opposition in the room? Seeing none. Bring it back to the committee. Ms. Quirk-Silver.

Claire Sullivanwitness

Thank you to the author. I think you were speaking to me this weekend without knowing because I went to a market in Fullerton for just some basic chips and salsa and just happened to pass a display of infant formula, not even knowing this bill was coming up. And I kind of glanced at it and then I glanced again and was shocked to see the price of a can of this was powdered formula. I'm not even going to ask, but I've already done this like three times today. Ask people, how much do you think a can of powdered infant formula is? The moms are buying it, so that's why you don't know. No. But how much? Nope. It was $59. $59. Wow. And so this is not, it is related to pricing, but it's just shocking, and it's also very disturbing, considering we know that when people are on a tight budget, they may do things like water down formula. But this exemption, I think, is very appropriate. I support it and move it forward.

Chairman Mike Gipsonassemblymember

I just want to clarify, this would take all the formulas that are on available for consumers and give this tax exemption for all of them. Is that correct?

Chair Gibsonchair

Based off of the way the bill is written, correct.

Chairman Mike Gipsonassemblymember

Okay. Good. Any additional questions? It's been moved. It's been seconded by Ms. Rodriguez. Thank you very much. Well, thank you very much, Senator, for being here. We appreciate you being here and this measure, 1151. I want to give you an opportunity to close.

Chair Gibsonchair

I appreciate your time and patience of the committee and respectfully ask for an aye vote.

Chairman Mike Gipsonassemblymember

Thank you very much.

Chair Gibsonchair

It's been a pleasure.

Chairman Mike Gipsonassemblymember

Moved by Ms. Quirk-Silver. It's been seconded by Ms. Rodriguez. I will ask our committee secretary to please call the roll in this measure. Gibson? Aye. Gibson, aye. Sanchez? Carrillo? Aye. Carrillo, aye. DeMaio? Aye. DeMaio, aye. McKinner? Aye. McKinner, aye. Quirk-Silva? Aye. Quirk-Silva, aye. Michelle Rodriguez? Michelle Rodriguez, aye. And the motion is... That bill is passed. The motion is... Two passes amended to appropriations. Very good. That bill is out. Thank you.

Chair Gibsonchair

Thank you.

Chairman Mike Gipsonassemblymember

Now we can go back and pick up Mr. DeMaio.

Claire Sullivanwitness

Yeah.

Chairman Mike Gipsonassemblymember

Now we'll go back and for absent members. Mr. DeMaio, welcome.

Claire Sullivanwitness

Hi.

Chairman Mike Gipsonassemblymember

Madam Secretary, please call the roll. On the consent calendar, that has passed. I'm speaking to Mr. DeMaio.

Claire Sullivanwitness

We have you. Yes.

Chairman Mike Gipsonassemblymember

The consent calendar. DeMaio, aye. On the consent calendar. The consent calendar is out. Mr. DeMaio, on item number five, I believe it is, SB 1349, that bill has passed too. DeMaio, no. And that looks like it. He was here for some time. Let me do it one more time. I just want to make sure. I think I have you for everything. I just want to make sure. Because you came in with the Cervantes one yes OK Yes I have everything Yep Fantastic Okay. Okay. I think all the business before revenue and taxation committee has been completed. We stand at adjourn. Thank you. Thank you.

Source: Assembly Revenue And Taxation Committee · June 15, 2026 · Gavelin.ai