WELL, GOOD MORNING, EVERYBODY.
WELCOME TO THE SENATE COMMITTEE
ON REVENUE AND TAX TAXATION.
WE'LL CALL THE MEETING TO ORDER.
WE. IT'S AN UNUSUAL DAY HERE AT
THE CAPITOL. TO THE EXTENT THAT
WE DO HAVE MULTIPLE COMMITTEES
MEETING, THE SENATE BUDGET
COMMITTEE TYPICALLY DOESN'T MEET
ON THIS DAY, BUT THEY ARE
MEETING THIS MORNING. AND WE
KNOW THAT THE SENATE EDUCATION
COMMITTEE IS ALSO MEETING. SO I
WANT TO INVITE AUTHORS WHO ARE
CAN HEAR MY VOICE AND STAFF TO
INVITE THEIR MEMBERS IF THEY'RE
NOT ON THOSE COMMITTEES AND
OBLIGATED TO COME ON DOWN TO OUR
COMMITTEE HEARING ROOM SO WE CAN
HAVE THEIR BILLS PRESENTED. AND
WE HAVE FIVE BILLS ON CONSENT
TODAY. SO GOOD NEWS FOR THOSE
AUTHORS, THOSE ARE ITEM ONE, SB
974 BY SENATOR GROVE, ITEM
THREE, SB 1102 BY SENATOR NGUYEN
. SB. ITEM FIVE SB 1172, ALSO BY
SENATOR GROVE. ITEM 12, SB 1499,
AND ITEM 13 SB 1501 BY ME,
SENATOR GLAZER. THOSE ARE TWO,
RECOMMENDED ON CONSENT, AND
WE'LL TAKE UP OUR CONSENT FILE,
WHEN WE HAVE A QUORUM. SO WE'RE
NOT GOING TO HAVE ENOUGH MEMBERS
TO ESTABLISH A QUORUM HERE YET,
BUT WE WILL BEGIN AS A AS A
COMMITTEE OF THE WHOLE THAT OUR
MINORITY MEMBER STAFF HAS
INDICATED. THAT'S OKAY TO DO
THAT. I WANTED TO THANK SENATOR
BRADFORD FOR BEING HERE THIS
MORNING, AND I WOULD LIKE TO
OFFER YOU THE OPPORTUNITY TO
PRESENT YOUR BILL. FIRST, WE'LL
MEET AS A COMMITTEE OF THE
WHOLE. NOW THIS IS, FILE ITEM
TEN, SB 1059. SENATOR BRADFORD,
THANK YOU VERY MUCH FOR YOUR
WORK IN THIS AREA. AND YOU THE
FLOOR IS YOURS. THANK YOU, MR.
CHAIR, SB 1059 IS A
STRAIGHTFORWARD MEASURE THAT
WILL ASSIST LEGAL CANNABIS
INDUSTRY BY ALLEVIATING SOME OF
THE TREMENDOUS TAX BURDENS
PLACED ON THIS INDUSTRY HIGH
TAXES, EXCESSIVE REGULATORY
HURDLES, AND THE VARIOUS
CHALLENGES THAT CANNABIS
BUSINESSES MUST FACE HAVE DONE
LITTLE TO HELP THE LEGAL
CANNABIS MARKET CONCEDE THE WAY
VOTERS HAD INTENDED THROUGH PROP
64. THIS BILL DOES TWO THINGS.
SPECIFICALLY, IT PROHIBITS A
LOCAL JURISDICTION FROM
INCLUDING THE STATE'S EXCISE TAX
AND SALES TAX, FROM THE
DEFINITION OF GROSS RECEIPTS FOR
THE PURPOSE OF LOCAL CANNABIS
TAXES. THIS WOULD ELIMINATE
LOCAL GOVERNMENTS COLLECTION OF
A TAX ON TAX. NO OTHER INDUSTRY
HAS. THIS TAX IS TAXING THE
TAXES AND ULTIMATELY INCREASING
PURCHASE PRICES PUSHES CONSUMERS
AWAY FROM THE LEGAL RETAILERS,
AND ONLY WORSENS AND CONTINUES
THE STRUGGLES FOR THE CANNABIS
RETAILERS. SECONDLY, THIS BILL
WOULD ELIMINATE THE AUTHORITY OF
THE CDTFA TO IMPOSE A 50%
PENALTY ON CANNABIS LICENSEES
DELINQUENT FOR DELINQUENT TAXES.
THESE LICENSEES ALREADY FACE
SEVERAL EXISTING PENALTIES, ONE
EXAMPLE IS A 10% FEE FOR FAILING
TO FILE A RETURN OR FILING LATE.
A 25% PENALTY FOR FRAUD OR
INTENT TO EVADE REGULATIONS, AND
A $500 PENALTY FOR FAILING TO
FURNISH A RETURN OR REPORT. THIS
50% PENALTY IS PUNITIVE, CREATES
A SIGNIFICANT HARDSHIP FOR
LICENSEES WHO ARE ALREADY
STRUGGLING WITH THE VARIOUS
CHANGES, TO CANNABIS TAX LAWS
AND HAS NOT BEEN SUCCESSFUL IN
INCREASING COMPLIANCE. SB 1059
WOULD PROVIDE MUCH NEEDED RELIEF
TO THIS INDUSTRY BY ENSURING
THAT TAXES ARE CALCULATED ON THE
ACTUAL GOODS BEING SOLD AND
ELIMINATING EXCESSIVE PENALTIES,
AND I RESPECTFULLY ASK FOR AYE
VOTE AND A DAY HERE, AS AN
EXPERT WITNESS, IS AMY JENKINS.
TO TESTIFY. THANK YOU, SENATOR
BRADFORD. AND BEFORE WE GO TO
MISS JENKINS, LET ME JUST
MENTION, FOR THOSE WHO ARE NEW
TO OUR COMMITTEE, THAT WE ALLOW
TWO WITNESSES IN FAVOR AND TWO
AGAINST, TWO MINUTES EACH TO
KIND OF GET US GOING. AND THEN
FOR THOSE WHO WANT TO INDICATE
SUPPORT OR OPPOSITION, WE DO Ã
ME TO OPPORTUNITY AT THE AT THE
END OF THAT SO THAT WE CAN HEAR
FROM THEM BEFORE BRINGING THE
MATTER BACK TO THE COMMITTEE FOR
DISCUSSION. SO WITH THAT, MISS
JENKINS, THE FLOOR IS YOURS.
THANK YOU, MR. CHAIR, PLEASURE
TO BE HERE TODAY. MY NAME IS AMY
JENKINS, AND I'M HERE ON BEHALF
OF THE CALIFORNIA CANNABIS
INDUSTRY ASSOCIATION AND THE
HUNDREDS OF CANNABIS OPERATORS
WE PROUDLY REPRESENT IN STRONG
SUPPORT OF SB 1059. THIS IS A
CRUCIAL PIECE OF LEGISLATION
THAT ADDRESSES THE STATE'S TAX
FRAMEWORK FOR LEGAL CANNABIS
BUSINESSES. I WILL SKIP SOME OF
MY REMARKS SINCE THE SENATOR
COVERED IT. I THINK WHAT I'LL
SAY IS, IS JUST BLUNTLY, THE
INDUSTRY IS WHAT WE WOULD
CONSIDER IN A STATE OF CRISIS.
RECENT DATA FROM THE CDTFA
PAINTS A CONCERNING PICTURE,
REFLECTS THAT CANNABIS EXCISE
TAX COLLECTIONS HAS DECLINED BY
OVER 300 MILLION, OR 20, SINCE
2021. ADDITIONALLY, THE OVERALL
DEBT CARRIED BY LEGAL OPERATORS
IS ESTIMATED TO BE AS HIGH AS
600 MILLION, WITH THE INDUSTRY'S
TAX BALANCE NEARLY 287 MILLION
AND GROWING. IN FACT, THE
CANNABIS INDUSTRY QUITE
FREQUENTLY IS SHOWING UP ON THE
TOP 500 SALES AND USE TAX
DELINQUENCIES, WHICH IS POSTED
ON THE CDTFA WEBSITE. WHY DO I
SAY THIS? THE PRIMARY GOAL OF
PROPOSITION 64, WHICH IS
REFERENCED IN ITS INTENTS AND
PURPOSES SECTION FIRST AND NO
LESS THAN FIVE TIMES IN TOTAL,
IS REALLY CHARGED WITH TRYING TO
GET RID OF THE ILLICIT MARKET
AND MORE SPECIFICALLY, ESTABLISH
A TAXATION FRAMEWORK THAT
UNDERMINES ILLICIT SALES, DETERS
ILLEGAL PRODUCTION AND
DISTRIBUTION, PREVENTS UNLAWFUL
DIVERSION THÀNH, AND ALSO FUNDS
CRITICAL PROGRAMS IMPORTANT TO
THE STATE. SB 1059 REPRESENTS A
PROACTIVE STEP TOWARDS
ADDRESSING VOTER INTENT BY
PROMOTING FAIR TAXATION IN
ENSURING A COMPETITIVE MARKET
AND ALIGNING WITH THE OBJECTIVES
OUTLINED IN PROP 64. FOR THESE
REASONS, CTIA PROUDLY SUPPORTS
THIS BILL AND ENCOURAGES YOUR
AYE VOTE TODAY. THANK YOU. THANK
YOU, MISS JENKINS, IS THERE
ANOTHER PRIMARY WITNESS IN
FAVOR? I DON'T THINK SO. SO
WE'RE GOING TO INVITE ANYONE
HERE IN THE HEARING ROOM THAT
WOULD LIKE TO COME TO THE
MICROPHONE AND DO A ME TOO, IN
SUPPORT OF, OF THIS LEGISLATION.
HI, MR. CHAIR AND MEMBERS, TALIA
D'AMATO, ON BEHALF OF CALIFORNIA
NORML, WE REPRESENT CONSUMERS
AND WE ARE IN SUPPORT. THANK
YOU. GREAT. THANK YOU. ANYONE
ELSE HERE IN THE HEARING ROOM?
OKAY. WE'LL GO TO OPPOSITION.
ANYONE HERE IN OPPOSITION THAT
WANTS TO COME FORWARD? I DO NOT
SEE ANYONE OR THAT SOMEONE
STANDING IN THE BACK. NO. OKAY,
SO WE'LL BRING THE MATTER BACK
TO THE COMMITTEE FOR DISCUSSION
AND QUESTIONS, SENATOR BRADFORD,
FIRST, LET ME JUST THANK AND
APPLAUD YOU FOR YOUR LEADERSHIP
TRYING TO MAKE THIS LEGAL MARKET
WORK. I KNOW THAT'S YOUR
COMMITMENT, AND YOU'VE WORKED
HARD ON IT FOR A NUMBER OF
YEARS. AND I ALSO KNOW THAT
YOU'VE BEEN, I DON'T KNOW IF
SHOEHORNED IS THE RIGHT WORD,
BUT YOU'RE WORKING UNDER THE
LIMITATION OF A PROPOSITION
THAT'S NOT SO EASY TO CHANGE.
AND I KNOW THAT YOU'RE PROPOSING
IN YOUR BILL A NUMBER OF REFORMS
THAT ARE GOOD, THAT DON'T
INTERFERE WITH 64. AND THEN
THERE'S A, THERE'S ONE THAT
DOES. AND I WANTED TO GIVE YOU A
CHANCE TO ADDRESS THAT OR YOUR
WITNESS TO ADDRESS IT. WELL, AND
I UNDERSTAND YOUR CONCERNS. MR.
CHAIRMAN. AND MY RESPONSE TO
THAT IS THAT, YES, IT WAS PASSED
BY THE VOTERS, BUT AS WE KNOW BY
ABOUT MANY PROPOSITIONS, THEY'RE
LOADED WITH A LOT OF STUFF THAT
THE VOTERS ARE NOT AWARE OF. AND
I ASSURE YOU, IF THIS HAD BEEN
HIGHLIGHTED, THIS TAX ON TAX,
I'M PRETTY SURE THE AVERAGE
VOTER AND CONSUMER WOULD HAVE
SAID NO TO THAT. BUT IT WAS
BAKED INTO THAT. AND MANY TIMES
THAT'S WHAT WE GET WITH
PROPOSITIONS. YOU KNOW, A LOT OF
THE UNKNOWNS. AND THIS IS ONE OF
THE UNKNOWNS, BECAUSE I THINK A
RATIONAL MIND WOULD HAVE SAID
THIS MAKES ABSOLUTELY NO SENSE.
BUT, MISS JENKINS, IF YOU HAVE
ANYTHING ELSE TO ADD TO, THAT
SURE JUST WOULD ECHO MY PRIOR
COMMENTS ABOUT INTENT AND
PURPOSE. THEY SHARE MICROPHONES
ON THERE. SORRY. GO AHEAD. YEAH,
JUST JUST WOULD ECHO MY PRIOR
COMMENTS ABOUT INTENT AND
PURPOSE. WE'VE UNFORTUNATELY HAD
TO MAKE A LOT OF MODIFICATIONS
TO PROP 64. SO WHAT I WOULD
MAINTAIN, MAINTAIN, MR.
CHAIRMAN, IS WE'RE NOT
FULFILLING THE INTENT AND
PURPOSE. THE ILLICIT MARKET IS
STRONGER THAN EVER, OUR REVENUES
ARE CANNABIS TAX REVENUES ARE
DECLINING, OUR LICENSEES ARE
DISAPPEARING AND GOING AWAY. AND
SO IF WE REALLY WANT TO ACHIEVE
THE OBJECTIVES THAT THE VOTERS
OUTLINED VERY SPECIFICALLY, WE
NEED TO REDUCE THE BURDENS ON
THE LEGAL INDUSTRY SO THAT IT
CAN SURVIVE AND THRIVE IN
CALIFORNIA. THANK YOU. YEAH. I,
EVERYTHING YOU SAY MAKES SENSE
TO ME. AND OF COURSE, THE
DILEMMA IS THAT THE EXPLICIT
WORDS IN THE PROPOSITION THAT
THIS WOULD THIS WOULD REVERSE
FOR THOSE WHO ARE OUT THERE
LISTENING, THAT ARE THINKING
ABOUT DOING A BALLOT MEASURE, WE
DON'T WANT TO INTERFERE WITH THE
PEOPLE'S RIGHT TO DECIDE THESE
ISSUES, IN SOME CASES, THEY PUT
PROVISIONS IN THERE THAT SAYS
THE LEGISLATURE CAN AMEND IF IT
ADVANCES THE PURPOSE AT A HIGH
THRESHOLD, SOMETIMES 3/5 OF THE
LEGISLATURE, SOME REAL HIGH VOTE
THRESHOLD. AND THIS IS ONE OF
THOSE OPPORTUNITIES WHERE IF
THEY HAD DONE THAT, THAT WE
WOULD BE PERFECTLY IN LINE WITH,
THE GOALS OF THE MEASURE, BUT
BECAUSE WE HAVEN'T, THAT CREATES
THE DILEMMA THAT'S BEFORE US
TODAY. ALL RIGHT. WITH THAT, ANY
CLOSING COMMENTS YOU WANT TO
MAKE AS STATED, I THINK IF WE
WANT PROPOSITION 64 TO LIVE UP
TO ITS PROMISE OF HAVING A
THRIVING LEGAL MARKET, WE HAVE
TO REDUCE THE TAXES ON
CONSUMERS, AS WE'VE CLEARLY
SEEN, THE RETAIL MARKET IS
GROWING IN THE LAST SEVEN YEARS,
NOT, THE LEGAL MARKET. AND IT'S
EXORBITANT PRICES. YOU'RE PAYING
ALMOST 40% MORE FOR AT A LEGAL
DISPENSARY THAN YOU DO FROM THE
LEGAL ONES. AND THAT'S WHAT'S
POPPING UP JUST DOWN THE STREET
FROM HERE. A LEGAL DISPENSARY
HAS HAD ITS DOORS SHUT SINCE THE
BEGINNING OF THE YEAR, BECAUSE
THEY NO LONGER CAN AFFORD TO
OPERATE. SO IF WE WANT THIS
MARKET TO SUCCEED, SUCCEED. I
SHOULD SAY WE NEED TO HELP THEM,
JUST AS WE'VE DONE WITH THE
CULTIVATORS BY ELIMINATING THAT
TAX. WE'RE JUST SAYING, LET'S
REDUCE THIS TAX OR ELIMINATE IT
ALTOGETHER. SO THANK YOU. THANK
YOU, SENATOR BRADFORD. THANK YOU
AGAIN FOR YOUR LEADERSHIP IN
THIS AREA. WHEN WE HAVE A
QUORUM, WE'LL ENTERTAIN A MOTION
ON YOUR MEASURE. THANK YOU FOR
THE PRESENTATION TODAY. I SEE WE
HAVE ANOTHER AUTHOR HERE,
SENATOR CIERTO, I WANT TO INVITE
YOU UP. THIS IS ITEM NUMBER TWO.
THIS IS SB 1086. SORRY. SENATOR
SECRETO, THE FLOOR IS YOURS,
THANK YOU VERY MUCH, HONORABLE
CHAIR. I'M HERE TO PRESENT SB
1086. CURRENTLY, CALIFORNIA
CONSUMERS ARE BEING TAXED ON
PAYING TAXES WHEN THEY BUY GAS,
THE SALES TAX IS APPLIED NOT
ONLY TO THE PRICE OF THE
GASOLINE ITSELF, WHICH IT SHOULD
BE. THAT'S HOW IT IS SUPPOSED TO
DO, BUT ALSO TO THE AMOUNT PAID
IN EXCISE TAX UNDER THE MOTOR
FUEL TAX LAW. MOTOR VEHICLE FUEL
TAX LAW, WHICH MEANS WE'RE
PAYING A TAX, WE CREATE A TAX
AND THEN WE TAX THAT TAX WITH
OUR SALES TAX. SO THIS ACTUALLY
AMOUNTS TO DOUBLE TAXATION WHEN
CONSUMERS PAY TAXES ON GASOLINE,
THEY EXPECT A CLEAR AND SIMPLE
SYSTEM BASED ON THE PRODUCT'S
PRICE. MY BILL SB 1086, WILL
RECTIFY THIS ISSUE BY EXCLUDING
THE MOTOR VEHICLE SALE OR MOTOR
VEHICLE FUEL TAX FROM THE
CALCULATION OF SALES TAX. THIS
WILL NOT IMPACT MOTOR VEHICLE
FUEL ACCOUNT OR PROJECTS
DEPENDENT ON THOSE FUNDS.
ACCORDING TO THE US ENERGY
INFORMATION AGENCY, CALIFORNIA
LEADS THE NATION IN GASOLINE TAX
RATES AT $0.68 A GALLON TO
CALIFORNIA. TAXPAYERS DESERVE
TRANSPARENCY IN PRODUCT PRICING,
NOT A CONFUSING SYSTEM THAT
IMPOSES DOUBLE TAXATION. SB 1086
WILL CONTINUE UPHOLDING THE
PRINCIPLES OF FAIRNESS AND
TRANSPARENCY BY REMOVING AN
UNNECESSARY COST ON CONSUMERS,
ESPECIALLY CALIFORNIA'S FAMILIES
, WITH ME TODAY, I HAVE SCOTT
KAUFMAN FROM THE HOWARD JARVIS
TAXPAYERS ASSOCIATION. HELLO,
MR. KAUFMAN, WELCOME TO MINUTES
OR YOURS. THANK YOU SIR, CURRENT
SALES AND USE TAX LAWS REQUIRE
RETAILERS TO PAY TAX ON VARIOUS
TRANSACTIONS. THE AMOUNT OF THE
TAX IS GENERALLY BASED ON THE
PRICE OF GOODS. HOWEVER WHEN IT
COMES TO GASOLINE, THE SALES TAX
IS APPLIED TO THE PRICE OF THE
PRODUCT IN ADDITION TO THE
AMOUNT PAID AND EXCISE TAX
PURSUANT TO THE MOTOR VEHICLE
FUEL TAX LAW, WHICH IS
ADMINISTERED BY THE CALIFORNIA
DEPARTMENT OF VÆ TAX AND FEE
ADMINISTRATION, THIS LAW IMPOSES
A TAX ON EACH GALLON OF MOTOR
VEHICLE FUEL THAT IS REMOVED
FROM A REFINERY OR TERMINAL. RAC
ENTERED IN THE STATE OR SOLD IN
THIS STATE. THE TAX RATE IS
SPECIFIED PER GALLON. TAXING A
TAX IS AN ACTION THAT RAISES
ETHICAL CONCERNS AND PUTS A
BURDEN ON CONSUMERS, CAUSING
PROBLEMS WITH FAIR TAXATION.
NOWHERE ELSE IN OUR SOCIETY DO
WE ALLOW SUCH A PRACTICE. WHEN
CONSUMERS PAY TAXES ON GASOLINE,
THEY EXPECT CLEAR AND SIMPLE
SYSTEM BASED ON THE PRODUCT'S
PRICE. HOWEVER, ADDING AN EXTRA
TAX ON TOP OF AN EXCISE TAX
UNDERMINES TRUST AND DISTORTS
THE DEMOCRATIC PROCESS. TAXATION
SHOULD BE CLEAR AND ACCOUNTABLE
WHEN VOTERS OR OFFICIALS APPROVE
AN EXCISE TAX, THEY EXPECT A
CLEAR DECISION ON THE SPECIFIC
TAX, ELIMINATING THE TAXATION OF
A TAX UPHOLDS FAIRNESS,
TRANSPARENCY AND TRUST WHILE
REMOVING AN UNNECESSARY BURDEN
AND RESTORING THE INTEGRITY OF
OUR TAX SYSTEM. I ASK FOR YOUR
AYE VOTE. THANK YOU. THANK YOU
SIR. ANY OTHER WITNESSES IN
FAVOR WANT TO COME UP TO THE MIC
AND DO A. ME TOO. ANYONE HERE IN
THE HEARING ROOM? ALL RIGHT.
SEEING NONE. WE'LL GO TO
WITNESSES IN OPPOSITION. ANYONE
HERE TO TESTIFY IN OPPOSITION TO
THIS MEASURE? ANYONE HERE TO
REGISTER THEIR OPPOSITION?
PLEASE COME UP TO THE MICROPHONE
AND SO INDICATE AT. ALL RIGHT.
WE'LL BRING THE MATTER BACK TO
THE COMMITTEE FOR DISCUSSION AND
QUESTIONS. MEMBERS. DISCUSSION
OR QUESTIONS? SENATOR CIERTO, I
KNOW YOUR INTENTIONS ARE GOOD
HERE TO AVOID THE WHAT YOU WOULD
CALL DOUBLE TAXATION, BUT THERE
IS A GENERAL FUND COST TO DOING
THAT THAT, THAT DO AFFECT, A LOT
OF STATE SERVICES, INCLUDING
ROAD AND HIGHWAY MAINTENANCE. DO
YOU HAVE ANY THOUGHTS ABOUT
WHERE THE MAKEUP WILL BE IF WE
DO ELIMINATE THIS? THIS ADDED
TAX? YEAH. HAVING COME OUT OF,
BUDGET COMMITTEE RIGHT NOW,
RIGHT NOW, WE DON'T HAVE ANY
IDEA WHERE THE MONEY FOR
ANYTHING IS GOING TO BE COMING
FROM RIGHT NOW, BUT WHAT THIS
MEASURE IS REALLY AIMED AT IS,
RESTORING SOME FAITH IN OUR
GOVERNMENT. AND THE WAY WE DO
OUR BUSINESS, WHEN WE'RE DOUBLE
TAXATION PEOPLE. IS THAT A NEW
WORD? I JUST MADE UP, WHEN WE
DOUBLE TAX PEOPLE LIKE THAT,
THEY THEY DISCOVER IT
EVENTUALLY, AND IT ADDS TO THE
DISTRUST THAT PEOPLE HAVE IN
GOVERNMENT. AND AND OUR
TRANSPARENCY. AND WHAT WE'RE
ASKING THEM TO DO, WHICH IS, TO
PAY SOME TAXES SO THAT WE CAN
PROVIDE SERVICES. BUT THEN WHEN
THEY SEE WASTEFUL, WASTEFUL
THINGS BEING DONE WITH THEIR
TAXES AND THEN THEY SEE THIS, IT
IT CREATES, LESS TRUST IN THE
GOVERNMENT OR LESS TRUST FROM
THEM IN US, IN THE GOVERNMENT.
AND THEN, THAT IN TURN LEADS TO
THEM NOT WANTING TO PAY MORE
TAXES, MORE BONDS. AND YOU'RE
SEEING THAT ALREADY. YOU'RE
SEEING THAT NO MATTER HOW MUCH
WE NEED TO PASS A BOND, FOR
FACILITIES THAT ARE DESPERATELY
NEEDED, PEOPLE ARE VERY
RELUCTANT. NOW AND PART OF THAT
IS THE CULTURE THAT WE HAVE
CREATED. AND PART OF THAT
CULTURE IS, IS ONE OF IS IN
THINGS LIKE THIS. AND SO THAT'S
PART OF MY, MY GOAL IS TO HELP,
MAKE THINGS MORE TRANSPARENT FOR
PEOPLE, SO, AND IT ALSO IF
YOU'RE GOING TO CREATE A TAX AND
THEN TAX THAT TAX, THERE'S A
PERVERSE INCENTIVE TO CREATE A
TAX. SO THAT YOU CAN PILE ON
MORE TAX ON TOP OF IT. SO IT'S
JUST FOR ME, IT'S A IT'S
SOMETHING THAT WE NEED TO DO TO
TRY TO RIGHT THE SHIP A LITTLE
BIT. AND HOW WE DO OUR BUSINESS
IN THE STATE OF CALIFORNIA. IT'S
THIS ISSUE OF A TAX ON A TAX
THAT'S BEEN IN EFFECT FOR QUITE
A WHILE, HASN'T IT. OH, THERE.
IT DOES AFFECT OTHER, OTHER
PARTS OF, OF OUR STRUCTURE,
HOWEVER THIS GOAL BECAUSE
ESPECIALLY DUE TO WHAT WE'RE
SEEING WITH GAS PRICES AND
THINGS LIKE THAT, PEOPLE WILL,
WILL, YOU KNOW, PEOPLE ARE
TAKING NOTICE AND, THIS IS THIS
IS AIMED SPECIFICALLY AT THE GAS
TAX. GOT IT. AND, BUT THIS IS A
THIS IS A SITUATION THAT'S BEEN
IN EFFECT FOR DECADES. ISN'T
THAT RIGHT? IT PROBABLY HAS BEEN
IN EFFECT FOR DECADES. AND IT'S
TIME TO FIX IT. YEAH. AND THE
DILEMMA FOR ME, I'M JUST
SPEAKING FRANKLY ABOUT IT. THE
DILEMMA FOR ME IS, IS THAT,
THEORETICALLY, IT MAKES SENSE,
AND FOR SOME OF THE, YOU KNOW,
REASONS THAT YOU OUTLINED IN
TERMS OF PUBLIC CONFIDENCE AND
TRUST, THOSE ARE POWERFUL WORDS.
AND THEY MEAN SOMETHING AND
THEY'RE IMPORTANCE. ON THE OTHER
HAND, WHEN A WHEN A VOTER SAYS,
WELL, WHY ARE YOU CUTTING THIS
AND WHY ARE YOU CUTTING THAT,
WHETHER IT'S OUR SCHOOLS OR IF
IT'S OUR ROADS OR IF IT'S OUR
PUBLIC SAFETY, YOU KNOW, THE
ANSWER IS, WELL, WE DON'T HAVE
THE RESOURCES RIGHT NOW. WE HAVE
THIS MASSIVE DEFICIT. YOU
MENTIONED COMING FROM BUDGET
COMMITTEE TO BE HERE TODAY. WE
THANK YOU FOR COMING, THAT THAT
THERE'S SOMEBODY HAS TO YOU HAVE
TO PAY THE PIPER. RIGHT. SOMEHOW
THE BUDGET HAS TO BE BALANCED.
AND SO THAT'S THE DILEMMA FOR
ME, RIGHT, WITH YOUR MEASURE AND
FOR PEOPLE THAT THINK WE HAVE A
SPENDING PROBLEM RATHER THAN A
TAXATION PROBLEM, THAT WOULD BE
THEIR THE ANSWER IS, WELL, WE
PROBABLY SHOULD SPEND LESS MONEY
AND BE CAREFUL THE WAY WE DO IT.
INDEED UNTIL IT COMES. ANYWAY, I
DON'T WANT TO BELABOR THAT,
JUST, I LET THAT BE MY CLOSE IF
YOU WANT, AND SIMPLY ASK FOR AN
AYE VOTE. TERRIFIC. WE'LL TAKE
THAT AS YOU'RE CLOSE AS YOU
WOULD SUGGEST. AND WE THANK YOU
FOR PRESENTING THE BILL. AND WE
HAVE A QUORUM. WE'LL TAKE UP A
MOTION. THANK YOU VERY MUCH.
THANK YOU FOR BEING HERE TODAY.
ALL RIGHT. I SEE ANOTHER AUTHOR
IN THE ROOM, SENATOR PORTANTINO,
THIS IS A FILE ITEM SIX, SB
1192. SENATOR PORTANTINO,
WELCOME TO THE COMMITTEE.
YOU CAN BEGIN WHENEVER YOU'RE
READY. THANK YOU, MR. CHAIR AND
COMMITTEE MEMBERS, WE HAVE
MEMBERS. I'M HERE TO PRESENT SB
1192, WHICH EXTENDS THE PASS
THROUGH ENTITY TAX PROVISION OF
THE SMALL BUSINESS RELIEF ACT.
AN ADDITIONAL TWO YEARS. I NOTE
THAT SOME FOLKS HAVE MAYBE
QUESTIONED, WHY ARE WE DOING IT
NOW? AND I SAY, WHAT A NOVEL
CONCEPT FOR THE STATE OF
CALIFORNIA TO GET AHEAD OF THE
CURVE AND START BRINGING A TAX
BENEFIT TO TAXPAYERS BEFORE IT'S
AN ISSUE. AND SO I THINK IT
MAKES SENSE TO MOVE, NOW. AND
GET THIS THROUGH THE SYSTEM, THE
EXPIRATION OF THE CALIFORNIA
SALT WORKAROUND CREATES
UNCERTAINTY FOR ELIGIBLE
TAXPAYERS. AND TAX PROFESSIONALS
WHO MUST MAKE DECISIONS IN 2024
AND 2025 ABOUT WHAT THE FUTURE
WILL HOLD. AND SO PASSING AN
EXTENSION IN 2024 WILL PROVIDE
TAXPAYERS WITH GREATER CERTAINTY
AND OBVIOUSLY HELP THE INDUSTRY
PROVIDE GOOD SERVICE TO OUR
TAXPAYERS. SO I WOULD
RESPECTFULLY ASK FOR AN AYE VOTE
I HAVE WITH ME, JASON FOX FROM
THE CAL CPA SOCIETY AND JOHN
ROSS, ON BEHALF OF THE NATIONAL
ACCOUNTING FIRMS. GREAT. THANK
YOU. SENATOR PORTANTINO.
WITNESSES GET TWO MINUTES EACH.
WHO WANTS TO BEGIN? I'LL START.
OKAY. JASON FOX WITH CALIFORNIA
SOCIETY OF CERTIFIED PUBLIC
ACCOUNTANTS, THE PASS THROUGH
ENTITY TAX, OR PT, HAS PROVEN TO
BE A WIN WIN TAX POLICY BY
OFFERING SUBSTANTIAL RELIEF FOR
NUMEROUS SMALL BUSINESSES
WITHOUT ANY DISCERNABLE NEGATIVE
IMPACT ON STATE REVENUE.
HOWEVER, AS THE SENATOR
MENTIONED, WHEN ORIGINALLY
ESTABLISHED, THE PT PROVISIONS
WERE SET TO EXPIRE AT THE SAME
TIME AS THE EXISTING FEDERAL
LIMITS ON INDIVIDUAL, STATE AND
LOCAL TAX DEDUCTIONS. THIS
APPROACHING SUNSET DATE HAS
CREATED UNCERTAINTY FOR
TAXPAYERS AND TAX PRACTITIONERS,
WHO NEED TO MAKE IMPORTANT TAX
AND BUSINESS DECISIONS IN 2024
AND 2025, INCLUDING WHETHER TO
OPT INTO THE PT ELECTION, HOW TO
PLAN FOR THE USE OF THEIR
CREDITS AND HOW THESE DECISIONS
MAY IMPACT RELATED TAX OR OTHER
BUSINESS MATTERS. FURTHER, THIS
CREATES UNCERTAINTY FOR TAX
AGENCIES WORKING TO MANAGE
RESOURCES AND EFFECTIVELY
EFFECTIVELY ADMINISTER THE PT
PROVISIONS. WHILE IT'S UNCERTAIN
WHEN OR HOW CONGRESS MAY ADDRESS
THESE FEDERAL LIMITS, CALIFORNIA
CAN BE PROACTIVE AND TAKE A STEP
NOW TO PROVIDE TAXPAYERS, TAX
PRACTITIONERS AND TAX AGENCIES
WITH THE CLARITY AND GUIDANCE
THAT THEY NEED TO MAKE INFORMED
DECISIONS AND PLAN FOR THE
FUTURE. JUST AS IMPORTANTLY, IT
ENSURES THAT THE PT WILL REMAIN
A BENEFICIAL OPTION FOR
COUNTLESS TAXPAYERS SHOULD THEY
NEED IT. SO WITH THAT, WE WOULD
URGE SUPPORT FOR SB 1192. THANK
YOU SIR. MR. ROSS, THE FLOOR IS
YOURS. THANK YOU, JOHN ROSS. ON
BEHALF OF THE NATIONAL
ACCOUNTING FIRMS AND I'LL JUST
EXCUSE ME, SPEAK FOR A SECOND TO
THE WHY NOW QUESTION AND THE
ANALYSIS, CONGRESS IS LIKELY TO
ACT ON WHETHER TO EXTEND VARIOUS
ASPECTS OF THE FEDERAL TAX
RELIEF ACT OF 2017. IN 2025,
INCLUDING WHETHER TO CONTINUE
THE CAP ON, LOCAL TAXES, THE
SALT CAP, IF THEY DO THAT AT THE
END OF 25, THE STATE REALLY
WON'T HAVE CERTAINTY UNTIL THEN.
IF YOU ACT IN 2026, LOTS OF
TAXPAYERS WILL HAVE TO MAKE
ESTIMATED PAYMENTS IN THE FIRST
TWO QUARTERS OF THE YEAR. NOT
KNOWING WHETHER THE SALT
WORKAROUND WILL BE AVAILABLE,
WHICH THEN THE TAXING AGENCIES
WILL HAVE TO FIGURE OUT A METHOD
TO REFUND. SO THAT CREATES
UNNECESSARY COMPLICATION FOR
EVERYBODY THAT WE HOPE THIS BILL
ADDRESSES. SECOND, AS MR. FOX
NOTED, A LOT OF TAXPAYERS ARE
TRYING TO FIGURE OUT IN 2025
WHETHER THEY WILL ELECT INTO
THIS SYSTEM AGAIN AND WHETHER
THE LAW WILL CONTINUE IN 2026
WILL BE VERY RELEVANT TO THAT.
SO WE URGE AN AYE VOTE ON THIS
IMPORTANT. THANK YOU, MR. ROSS.
WE'RE GOING TO GO TO OTHERS HERE
IN THE HEARING ROOM THAT WANT TO
DO A ME TOO, IN FAVOR OF THIS
MEASURE. COME UP TO THE
MICROPHONE. ANYONE HERE?
JENNIFER SNYDER WITH CAPITAL
ADVOCACY ON BEHALF OF THE
CALIFORNIA LIFE SCIENCES AND
SUPPORT. THANK YOU. ANYONE ELSE
HERE IN THE HEARING ROOM? ALL
RIGHT. SEEING NO ONE, WE'LL GO
TO OPPOSITION. IS THERE ANYONE
HERE IN THE HEARING ROOM THAT
WANTS TO TESTIFY IN OPPOSITION
TO THIS MEASURE? SEEING NONE,
WE'LL BRING IT BACK TO THE
COMMITTEE FOR QUESTIONS OR
COMMENTS. SENATOR DOLLY, HI.
THANK YOU FOR BRINGING THIS
FORWARD. OBVIOUSLY I THINK WE DO
NEED TO DO IT NOW SOONER THAN
LATER SO THAT THOSE WHO WHO
ACTUALLY CALIFORNIA GOT
PENALIZED DURING THE SALT. AND
SO I'M GLAD THE SENATOR BROUGHT
THIS FORWARD AND I'LL BE
SUPPORTING THIS BILL. I THINK
IT'S REALLY GOOD POLICY. AND TO
GIVE SOME CERTAINTY TO THE FOLKS
WHO ARE PLANNING TAXES, I THINK
IT WILL BENEFIT THEM GREATLY.
THANK YOU, SENATOR DOLLY. ANY
OTHER COMMENTS OR QUESTIONS,
SENATOR PORTANTINO, THANK YOU.
IT'S, IT MAKES A LOT OF SENSE TO
HAVE A MATTER THAT DEALS WITH
ACCOUNTANTS, TO HAVE THEM BE
VERY ORGANIZED, AS WE WOULD
EXPECT, TO MAKE SURE WE'RE AHEAD
OF THE GAME MORE THAN AHEAD OF
THE GAME, BEING IN THE RIGHT
PLACE TO PROTECT OUR TAXPAYERS
AND TO HAVE CERTAINTY. SO I
CERTAINLY SUPPORT YOUR BILL
TODAY. I WANT TO GIVE YOU AN
OPPORTUNITY TO CLOSE THIS
RESPECTFULLY ASK FOR AN AYE VOTE
WHEN YOU HAVE A QUORUM. GREAT.
SO WE'LL, PUT THAT BILL ON, ON
HOLD AS WE WAIT TO ESTABLISH A
QUORUM. THANK YOU ALL FOR BEING
HERE AND PRESENTING YOUR BILL.
ALL RIGHT. WE'RE LOOKING FOR
AUTHORS. WE HAVE A NUMBER OF
AUTHORS THAT MAY NOT BE SITTING
IN COMMITTEES RIGHT NOW. SO,
STAFF, IF YOU'RE HEARING MY
VOICE, I WON'T MENTION NAMES,
BUT I HOPE THAT YOU'LL INVITE
YOUR MEMBER TO COME DOWN TO OUR
HEARING ROOM, AS WELL AS MEMBERS
ON THE COMMITTEE THAT WILL ALLOW
US TO ESTABLISH A QUORUM. SO
WE'RE GOING TO TAKE A SHORT
RECESS WHILE WE WAIT FOR
AUTHORS.
THE SENATE COMMITTEE ON REVENUE
TAX WILL COME BACK TO ORDER. WE
HAVE AN AUTHOR PRESENT WHICH WE
APPRECIATE. GREAT, WE'RE GOING
TO MOVE NEXT TO FILE ITEM NINE.
THIS IS SB 1436 BY SENATOR
ALLEN. SENATOR ALLEN, WELCOME TO
THE COMMITTEE. THANK YOU SO
MUCH, MR. CHAIR. AND, WITH YOUR
INDULGENCE, I HAVE WITH ME HERE,
THE MEMBER OF THE BOARD OF
EQUALIZATION, TONY VASQUEZ,
WHO'S ONE OF THE CO-SPONSORS OF
THE SPONSOR OF OUR BILL. SO AS
YOU KNOW, CALIFORNIA TAX LAWS
IMPACT NEARLY EVERY ASPECT OF
LIFE. THE INFLUENCE OF DECISIONS
THAT PEOPLE MAKE ABOUT HOW TO
SAVE FOR RETIREMENT, WHERE TO
LIVE, HOW TO ORGANIZE THEIR
BUSINESSES, HOW MUCH TO BORROW
OR INVEST. AND THE BASIC
CRITERIA NEEDED FOR SOUND TAX
POLICY ARE FAIRNESS AND
TRANSPARENCY, OBVIOUSLY THERE
WAS A MASSIVE SHIFT MADE A
COUPLE OF YEARS AGO WHERE WE
TOOK A LOT OF THE TAX AND, YOU
KNOW, A SHIFT THAT I SUPPORTED
WHERE WE TOOK A LOT OF THE TAX,
YOU KNOW, GOVERNANCE ROLE FROM
THE BOARD OF EQUALIZATION AND
PUT IT OVER INTO, INTO A SET OF,
OF ADMINISTRATIVE ENTITIES.
CDTFA AND OTHERS. THERE'S A LOT
OF BENEFITS THAT HAVE COME FROM
THAT, ONE THING THAT HAS
HAPPENED AS A RESULT, HOWEVER,
IS THAT IT'S REALLY TAKEN AWAY,
THE, THE SORT OF PUBLIC
OVERSIGHT AND RESPONSIVENESS
THAT, THAT, THE BOE PROVIDED. SO
THIS BILL SEEKS TO REMEDY THAT
IMBALANCE, WHILE VERY MUCH
CENTERING THE KEY WORK OF TAX
ADMINISTRATION IN THESE VARIOUS
ENTITIES THAT WE SENT THAT WORK
TO WHILE ALSO PROVIDING FOR, A,
YOU KNOW, A PUBLIC INPUT PROCESS
. AND SO WE HAVE A FRANCHISE TAX
BOARD ALREADY AS YOU ALL KNOW,
IT CONSISTS OF THREE MEMBERS.
IT'S THE COMPTROLLER, THE CHAIR
OF THE BOARD OF EQUALIZATION AND
THE DIRECTOR OF FINANCE. AND THE
BOARD IS REQUIRED TO HOST, YOU
KNOW, PUBLIC MEETINGS EVERY YEAR
WHERE TAX PROFESSIONALS AND
INDIVIDUAL TAXPAYERS ARE WELCOME
TO PRESENT PROPOSED CHANGES TO
CALIFORNIA TAX LAWS. AND IT IT'S
AN IMPORTANT FORUM FOR DEBATE
AND DISCUSSION ABOUT TAX POLICY
AND I THINK, YOU KNOW, I, I
DON'T THINK IT'S A STRETCH AT
ALL TO SAY THAT THE FTB IS
VIEWED AS A RELIABLE, ENTITY.
IT'S RESPONSIVE TO TAX QUESTIONS
RAISED BY TAXPAYERS. IT'S A
PLACE FOR DISCUSSION, BECAUSE
AND A BIG PART OF THAT IS THAT
IT'S MADE UP OF, YOU KNOW, SOME
ELECTED OFFICIALS WHO ARE
RESPONSIVE TO REAL PEOPLE. AND
SO, NOW, ON THE OTHER SIDE,
BECAUSE OF THEIR MORE
BUREAUCRATIC STRUCTURE, OTHER
TAX AGENCIES SUCH AS CDTFA, THE
OFFICE OF TAX APPEALS, THEY
DON'T ALWAYS HAVE THAT SAME
LEVEL OF TRANSPARENCY AND
ACCOUNTABILITY. THEY'RE LESS
RESPONSIVE TO INQUIRIES FROM
TAXPAYERS AND INCLUDING TAX
PROFESSIONALS. I MEAN, I'VE
SPOKEN TO COUNTY ASSESSORS WHO
SAY THAT THEY CAN'T GET A CALL
BACK FROM THE CDTFA, WHICH IS
REALLY EXTRAORDINARY GIVEN HOW
IMPORTANT A ROLE THEY HAVE IN
THE IN THE SYSTEM, SO THIS BILL
ESTABLISHES THE CALIFORNIA TAX
POLICY OVERSIGHT BOARD. IT'S
MODELED ON THE FTB. IT WOULD
JUST LIKE THE FTB. IT'S THE
CONTROLLER, DIRECTOR OF FINANCE,
CHAIRPERSON OF THE OF THE BOE,
THE WAY WE HAVE IT, STRUCTURED
IT ALSO BECAUSE OF ALL THE
DEBATES HAPPENING ON OTHER
BILLS, AS YOU KNOW, WE INCLUDE
THE STATE TREASURER AND THE
SECRETARY OF GOVERNMENT
OPERATIONS AGENCY, SO THE
ADMINISTRATION STILL HAS A VERY
SIGNIFICANT, ROLE IN ALL OF
THIS. AND WE'RE OPEN TO
DISCUSSION AS TO HOW THIS WOULD
BE STRUCTURED. BUT THIS IS THE
VISION HERE IS THAT THIS NEW
BOARD WOULD HAVE THE
RESPONSIBILITY TO HOLD PUBLIC
MEETINGS TO PROMOTE CONSISTENCY
IN TAX POLICY, PROVIDE FORUMS
FOR TAX AGENCIES TO WORK
COLLABORATIVELY ON ISSUES
BROUGHT BY TAXPAYERS AND PROVIDE
RECOMMENDATIONS TO IMPROVE TAX
ADMINISTRATIONS. TAX
ADMINISTRATION POLICIES AND
PROCEDURES, SO IT'S ALL ABOUT
IT'S A IT'S A VERY GENTLE,
CORRECT MOVE, I SUPPOSE, TO SOME
OF THE RATHER, YOU KNOW, BECAUSE
AS WE'VE DISCUSSED, MR. CHAIR,
THERE'S NOT A LOT OF, YOU KNOW,
TEETH BY THE, BY BY THE BOARD
HERE. IT'S JUST THAT IT WOULD
PROVIDE A FORUM FOR DISCUSSION
OF RESPONSE OF TAX POLICY SO AS
TO ENCOURAGE MORE RESPONSIVE
NESS AND ENGAGEMENT AND MORE
COHERENCE TO THE SYSTEM. THAT'S
THE VISION. WE'RE VERY OPEN TO
DIFFERENT WAYS OF ACHIEVING THAT
VISION. I'M ALSO HAPPY TO TALK
ABOUT SOME OF WITH MORE DETAIL,
SOME OF THE REASONS AS TO WHY
THIS IS BEING BROUGHT FORWARD IN
THE FIRST PLACE. FROM A
RESPONSIVENESS PERSPECTIVE, BUT
THAT'S, THAT'S WHAT WE'RE TRYING
TO DO HERE WITH THIS BILL AND
TESTIFYING IN SUPPORT. THIS
MORNING IS OUR THIRD DISTRICT
BOARD OF EQUALIZATION MEMBER,
TONY VASQUEZ. MR. VASQUEZ,
WELCOME. WELL, THANK YOU, THANK
YOU. CHAIR AND JUST FOR THE
RECORD, MY NAME IS ANTONIO
VASQUEZ, AND I SERVE, AS A
MEMBER OF THE STATE BOARD OF
EQUALIZATION AND PREVIOUS CHAIR
OF THE BOARD. BUT I'M HERE TODAY
REPRESENTING JUST MYSELF AS A
DISTRICT MEMBER, BECAUSE THE
BOARD AS A WHOLE HASN'T TAKEN IT
UP, IT IT'S ON THE AGENDA FOR
OUR NEXT MEETING, WHICH IS NEXT
WEEK. OUR BOARD MEETING. BUT LET
ME JUST SAY THAT I'M IN TOTAL
SUPPORT OF THIS. AND WHAT WHAT I
WANT TO EMPHASIZE IS THAT THIS
BILL, I THINK, WOULD SERVE,
THREE KEY ISSUES. AND LET ME
JUST RUN THROUGH THEM FIRST,
THERE IS CURRENTLY NO CENTRAL
OFFICIAL ENTITY THAT FACILITATES
COMMUNICATION AMONG THE VARIOUS
TAX AGENCIES, WHICH INCLUDE THE
BOE, ED, FTB, AND CDTFA. THIS
BILL WOULD PROVIDE AN OFFICIAL
PUBLIC FORUM FOR DISCUSSING AND
REPORTING ON HIGH LEVEL TAX
POLICY ISSUES AMONG THE TAX
AGENCIES UNDER A BOARD OF
PRIMARILY ELECTED OFFICIALS
KNOWLEDGEABLE IN TAX POLICY.
SECOND, EXISTING TAXPAYER
RESOURCES TEND TO BE LIMITED TO
THE AGENCY CHARGED WITH
ADMINISTERING THE SPECIFIC TAX
PROGRAM IN QUESTION. FOR EXAMPLE
, TAXPAYER RIGHTS ADVOCATES
APPOINTED BY THE TAX AGENCIES
WILL CONDUCT INTAKE ON THE AND
ADDRESS TAXPAYER GRIEVANCES AND
ISSUES, INCLUDING OPERATIONAL
QUESTIONS. THE TAX POLICY
OVERSIGHT BOARD CAN PROVIDE AN
ADDITIONAL RESOURCE TO TAXPAYERS
IN THE FOLLOWING WAYS. WHEN
TAXPAYERS ARE NOT ABLE TO GET
THEIR ISSUE RESOLVED WITH THE
APPROPRIATE AGENCY DUE TO
SOLUTIONS BEYOND THE AGENCY'S
PURVIEW, I.E. THE WHEN
LEGISLATION MAY BE NEEDED TO
ADDRESS ISSUES OR WHEN THE
TAXPAYERS HAVE AN
INTERDISCIPLINARY TAX ISSUE THAT
MAY REQUIRE MORE THAN ONE
TAXATION TO RESOLVE TO RESOLVE
IT. THIRD, THE TAX POLICY
OVERSIGHT BOARD WOULD HAVE THE
ABILITY TO RECEIVE INPUT FROM
THE TAX AGENCIES AND TAXPAYERS
REGARDING CROSS-AGENCY PROBLEM
AREAS. ALL BUSINESSES IN
CALIFORNIA ENGAGE AND OR FILE
WITH THE FTB, CDTFA AND THE BOE
AT LEAST ANNUALLY. THE TAX
POLICY OVERSIGHT BOARD WOULD
HAVE THE AUTHORITY TO RECEIVE
INPUT AND MAKE RECOMMENDATIONS
CONCERNING INTER AGENCY TAX
POLICIES THAT ARE, OR MAY BE
NEGATIVELY IMPACTING BUSINESSES,
SUCH AS POLICIES REGARDING
RECORD KEEPING AND ACCEPTABLE
STANDARD OF REASONABLE
APPROXIMATIONS. AND YET ANOTHER
EXAMPLE, AFFORDABLE HOUSING IS
AN INTERAGENCY TOPIC THAT
REQUIRES THE ENGAGEMENT OF
NONPROFIT ORGANIZATIONS WITH FTB
BOE, INCLUDING COUNTY ASSESSORS
AND CDTFA, TO OBTAIN THE WELFARE
PROPERTY TAX EXEMPTION AND OTHER
EXEMPTIONS OR TAX CREDITS. THESE
ARE JUST A FEW EXAMPLES OF
INTERDISCIPLINARY TAX POLICIES,
AREAS THAT SINGLE CALIFORNIA TAX
AGENCIES IS CURRENTLY UNABLE TO
ADDRESS COMPREHENSIVELY ON ITS
OWN, WITH APPROXIMATELY 20
MILLION INCOME TAXPAYERS, 14
MILLION PROPERTY TAXPAYERS, AND
A MILLION SALES TAX PAYERS,
THERE IS A NEED FOR A STATEWIDE
ELECTED OFFICIAL TO FOCUS AT
LEAST TWICE A YEAR ON CURRENT
ISSUES THAT MAY IMPACT THE TAX
AGENCIES, AND I THANK YOU FOR
THIS OPPORTUNITY. THANK YOU.
THANK YOU FOR YOUR TESTIMONY.
ALL RIGHT. WE'RE GOING TO GO FOR
OTHERS HERE IN THE HEARING ROOM
THAT WANT TO INDICATE THEIR
SUPPORT FOR THE MEASURE, BEFORE
WE HEAR FROM THE OTHER SIDE,
ANYONE HERE IN THE HEARING ROOM
WANT TO COME TO THE MICROPHONE,
INDICATE SUPPORT. ALL RIGHT.
WE'RE GOING TO MOVE TO
OPPOSITION. IS THERE ANYONE HERE
IN THE HEARING ROOM THAT WANT TO
WANTS TO SPEAK IN OPPOSITION?
OKAY, NOT SEEING ANYONE. WE'LL
BRING THE MATTER BACK TO THE,
THE COMMITTEE. SENATOR DOLLY.
THANK YOU, MR. CHAIR. SO I'M
TRYING NOT TO LOSE MY MIND RIGHT
NOW, AND I'LL SAY I'LL SHARE WHY
I'M IN BUSINESS. ONE OF THE FEW
MEMBERS OF THIS LEGISLATURE THAT
ACTUALLY RUNS A BUSINESS AND WHO
HAS WATCHED WHAT WE'VE DONE WITH
THE BOARD OF EQUALIZATION OVER
THE YEARS THAT I'VE BEEN HERE.
SO WE HAD SOME MEMBERS. I'M JUST
GOING TO CALL A SPADE A SPADE
TODAY. WE HAD SOME MEMBERS OF
THE BOARD OF EQUALIZATION WHO
WERE DOING THINGS THAT, IN MY
MIND, WEREN'T THEIR SCOPE
RUNNING, COMING TO THE
LEGISLATURE. AND THE LEGISLATURE
SAW THAT AND WE ACTED ON IT. WE
BASICALLY NEUTERED OR GUTTED THE
BOARD OF EQUALIZATION. THEY
DON'T REALLY HAVE. WITH ALL DUE
RESPECT TO THE ELECTED MEMBERS,
MY MEMBER CALLED ME TODAY AND
WANTS ME TO SUPPORT YOUR BILL
AND SO WITH THAT BEING SAID, AS
A BUSINESS OWNER IN CALIFORNIA,
IF I HAVE A PROBLEM WITH THE
FRANCHISE TAX BOARD OR I HAVE, I
MEAN, ONE TIME WE GOT BILLED, WE
GOT TAXED FOR FUEL. I'M JUST
GOING TO IT WAS HIGHWAY FUEL
VERSUS FARM FUEL, AND WE GOT A
TAX ON IT. AND IT TOOK ME TWO
AND A HALF YEARS, MY WIFE AND I,
TO GET THAT BACK FROM THE STATE,
BECAUSE I WAS FORCED TO PAY IT
UP FRONT. IF IT WASN'T, THEN FOR
THE BOARD OF EQUALIZATION, I HAD
NO PLACE TO GO AS A BUSINESS
OWNER. AND NOW I'M RIGHT THERE
AGAIN. MY BOARD OF EQUALIZATION
HAS BEEN NEUTERED, I DON'T HAVE.
SO WHERE DOES THE WHERE DOES THE
BUSINESS OWNER AND THE PEOPLE GO
TO ACTUALLY GET SOME REPRIEVE
WHEN THEY'RE WHEN THERE'S NO
JUSTICE IN THE TAX SYSTEM AND
THERE'S NOBODY TO ADVOCATE FOR
YOU. NOW, I'M GOING TO JUST SAY
A COUPLE MORE THINGS, AND I WANT
YOUR RESPONSE, BECAUSE I DON'T
SEE ANY TEETH IN THIS OF ANY
ABILITY TO GET DONE. I JUST CAME
FROM THE BUDGET HEARING, WHICH
IS THE SAME THING THAT HAPPENS
HERE. EVEN A REPUBLICAN WHO IS A
LEGISLATOR CAN'T GET ENGAGED IN
THE PROCESS. I'M AN ELECTED
PERSON. WHAT ABOUT THE PERSON
THAT'S THE BUSINESS OWNER, THE
REGULAR CONSTITUENT THAT WE
REPRESENT? HOW DO THEY GET ANY
ACCESS TO ANYTHING? AND THAT'S
THAT'S THE PROBLEM HERE. I MEAN,
AT THE END OF THE DAY,
EVERYTHING'S DONE IN THE DARK
AND AS SOMEBODY WHO'S TRYING TO
ABIDE BY THE LAW AND ACTUALLY
GET SOMEWHERE, THERE'S NO PLACE
FOR A TAXPAYER WHO HAS NO NOBODY
TO REPRESENT HIM OR HER. THAT'S
WHY YOU'RE DOING THIS. AND
WHERE'S THE TEETH IN THIS BILL
THAT SAYS, HEY, BRIAN DALLEY
THAT OWNS BIG VALLEY SEED
COMPANY CAN COME TO SOME PLACE
AND SAY, I HAVE A DISCREPANCY
WITH THE LAW AND I NEED HELP. I
MEAN, YEAH, THEY CALL OUR
OFFICES. I'M SURE YOU'VE HAD
THEM AND YOU GO DO WHAT YOU CAN
TO GET IT DONE. THAT'S I MEAN, I
UNDERSTAND WHAT YOU'RE TRYING TO
GO HERE, BUT THERE HAS TO BE A
HAMMER AT SOME POINT THAT
SOMEBODY HAS TO BE ACCOUNTABLE.
WHO IS IT? YEAH. I APPRECIATE
SENATOR ALLEN. I APPRECIATE THE
LINE OF QUESTIONING A GREAT
DEAL. IT'S PART OF WHAT WE'RE
TRYING TO ADDRESS HERE. I
ABSOLUTELY AGREE, YOU KNOW THAT
IT DOESN'T GO FAR ENOUGH, WE'RE
WE'RE BARELY HANGING ON A STRING
HERE WITH THE COMMITTEE WITH
THIS PROPOSAL, I KNOW THERE ARE
SOME FOLKS WHO, YOU KNOW, REALLY
STILL BELIEVE IN EVERYTHING THAT
WAS IN AB 102, BUT I, I FEEL AS
THOUGH, YOU KNOW, AB 102, WHICH
IS A BILL I SUPPORTED FOR BETTER
FOR WORSE. I'VE BEEN, YOU KNOW,
REGRETTING SOME ASPECTS OF THAT
SUPPORT, QUITE FRANKLY, BECAUSE
I THINK THAT IT DID SWING THE
PENDULUM TOO FAR IN THE OTHER
DIRECTION. THERE WERE SOME
THINGS THAT NEEDED TO BE FIXED
UP AT THE, AT THE BOE, BUT YOU
KNOW, BUT BUT THERE IS A
RESPONSIVENESS ISSUE THAT YOU
ARE HAMMERING AT RIGHT NOW THAT
HAS BEEN LOST AS A RESULT OF AB
102. AND THIS WAS OUR MODEST
ATTEMPT TO TRY TO CREATE MORE OF
A OF A MECHANISM FOR, YOU KNOW,
TO GIVE TAXPAYERS THE
OPPORTUNITY TO WEIGH IN AND BE
HEARD, BECAUSE RIGHT NOW, WHEN
THESE QUESTIONS GO TO THE
FACELESS BUREAUCRACY, IT'S A
BLACK BOX AND THERE'S NOT
RESPONSIVENESS. SO SHOULD THIS
GO FURTHER? YES, IT SHOULD. YOU
KNOW, IS THIS GOING TO BE HARD
ENOUGH TO GET THROUGH THE
LEGISLATURE AND SIGNED. YES, YOU
KNOW, BUT IT'S ABSOLUTELY A STEP
TO TRY TO ADDRESS THE LACK OF
RESPONSIVENESS THAT YOU'RE
CORRECTLY RAISING. AND IT'S OUR
HOPE THAT HAVING A BOARD MADE UP
OF HIGH LEVEL ELECTED OFFICIALS,
WILL PROVIDE A FORUM FOR
TAXPAYERS TO GET HEARD AND TO
HAVE THEIR GRIEVANCES ADDRESSED,
YOU KNOW, IN A WAY THAT IS JUST
NOT AVAILABLE RIGHT NOW UNDER
THE CURRENT SYSTEM SET UP BY AB
102. SO IT'S A IT'S A IT'S A IT
IS A STEP IN IT. IT'S GOING TO
PROVIDE SOME, CERTAINLY
SIGNIFICANTLY MORE OPPORTUNITY
TO BE HEARD THAN WHAT IS
CURRENTLY ALLOWED UNDER AB 102.
THAT'S THE IDEA HERE. THE
SENATOR DONNELLY, I DON'T KNOW
IF YOU HAVE A FOLLOW UP, BUT
WE'RE GOING TO TAKE A BRIEF
PAUSE AND ESTABLISH A QUORUM.
THE SECRETARY, PLEASE CALL THE
ROLL. SENATORS GLAZER. GLAZER,
PRESENT. DOLLY. DOLLY. PRESENT
ASHBY. ASHBY. PRESENT. BRADFORD.
BRADFORD PRESENT. DODD. PADILLA.
SKINNER. YOU HAVE A QUORUM.
OKAY. WE HAVE A QUORUM, IN
PLACE. SENATOR DOLLY, I THINK.
THANK YOU, MR. CHAIR. THIS I, I
THINK THIS IS REALLY IMPORTANT
FOR THE BUSINESS OWNERS AND THE
PEOPLE THAT PAY TAXES IN
CALIFORNIA THAT HAVE THEY HAVE
NO PLACE TO GO. AND I THINK THIS
I THINK YOU BRING UP, BUT I
THINK WE SHOULD MAYBE GO BACK
AND LOOK AT AB 102 AND FIX THAT
AND GIVE BACK THE BOARD OF
EQUALIZATION SOME POWER TO
ACTUALLY ACT BECAUSE THEIR
ELECTED BODY AND THEY HAVE TO BE
HELD ACCOUNTABLE TO THE TO THE
VOTER. AND LOOK, IT WAS REAL. IT
WOULD HAVE BEEN REALLY HARD AT
THE TIME WHEN WE DID AB 102 TO
STAND UP AND VOTE AGAINST IT,
BECAUSE THERE WAS SO MUCH,
MISUSE OF THEIR POWER AND YOU
COULDN'T WITH A STRAIGHT FACE
DEFEND THEM. BUT HERE WE ARE
NOW, YOU KNOW, A COUPLE OF YEARS
LATER, HOW LONG IT'S BEEN, AND
THERE IS NO PLACE AGAIN, I'M
GOING TO SUPPORT YOUR BILL, BUT
I'M I'M WELL, I SHOULD SAY I
HAVE. I'M IN A QUANDARY. IF I
SUPPORT YOUR BILL, THEN. AND IF
IT DOES GET PASSED AND SIGNED IN
LAW, IT REALLY DOESN'T FIX THE
PROBLEM. WE STILL DON'T. WE?
IT'S AN ATTEMPT TO GET THERE.
IT'S AT LEAST HAVING THE
DISCUSSION. BUT IF I SUPPORT IT
AND IT GETS SIGNED INTO LAW,
THEN WE GO, OKAY, WE DID THAT
AND THEN THEN WE'RE BACK HERE
AGAIN. STILL NOT WITH AN
OPPORTUNITY TO GIVE THE POWER
BACK, SOME POWER BACK TO THE
BOARD OF EQUALIZATION. SO I HAVE
SOME REPRESENTATION OF AN
ELECTED PERSON. YEAH. OTHER THAN
CALLING MY SENATOR OR MY WHEN
I'M NOT HERE ANYMORE, CALLING
SOMEBODY AND TRYING TO RATTLE
THE CAGE TO GET SOMETHING DONE.
I MEAN, IT'S HARD ENOUGH TO, AS
A LEGISLATOR TO FIGURE YOUR WAY
OUT, TO GET SOME ANSWERS CAN
IMAGINE WHAT THE LOCAL SMALL
BUSINESS OWNER IS DOING. THEY'RE
THEY'RE CALLING, THEY'RE
FRUSTRATED. SO AS TO PUT IT ON
THE RECORD, I THINK LET ME SAY
RIGHT HERE IN PUBLIC, YOU KNOW,
THAT I AGREE WITH WHAT YOU'RE
SAYING. AND THIS IS NOT FIXING
THE PROBLEM OF AB 102. IT MAKES
THINGS A LITTLE BIT BETTER, AND
I APPRECIATE YOU SEEING THE FACT
THAT IT'S A, THAT IT'S GOING TO
HELP, BUT BY NO MEANS IS THIS
OFFERED AS A WHOLESALE
CORRECTIVE FOR THE FOR THE
CHALLENGES RAISED BY THE
IMPLEMENTATION OF AB 102. WE'RE
GOING TO SEE IF WE HAVE ANY MORE
QUESTIONS OR COMMENTS FROM
COLLEAGUES ON THE PANEL NOT
SEEING ANY, SENATOR ALLEN, DO
YOU WANT TO CLOSE? REALLY
APPRECIATE THE DISCUSSION ON,
YOU KNOW, THIS IS I THINK, I
THINK YOU'VE HEARD MY
PERSPECTIVE, AND WE'RE JUST
TRYING TO ASK FOR SOME, A LITTLE
GREATER RESPONSIVENESS OUT OF
THE SYSTEM. THAT'S WHAT WE'RE
SEEKING TO DO HERE. AND WITH
THAT, I, IN THAT SPIRIT, AND I
WELCOME FUTURE DISCUSSION FROM
THE MEMBERS AND FROM THE
COMMITTEE. AND I RESPECTFULLY
ASK FOR A NO VOTE. THANK YOU.
SENATOR ALLEN. I APPRECIATE THE
CONVERSATION THAT WE'VE HAD. AND
WITH YOUR WITNESS, I THINK THAT,
YOU KNOW, WHAT YOU'RE ASKING FOR
IS, IS REASONABLE TO ME. I WISH
SOME OF THESE TAX AGENCIES WERE
HERE TO TESTIFY, EITHER IN
SUPPORT OR OPPOSITION OR DEFEND
THE CONCERNS THAT YOU HAVE
LEGITIMATELY RAISED ABOUT THE
LACK OF RESPONSIVENESS FROM
THESE TAX AGENCIES. IT'S I
WOULD, YOU KNOW, ENCOURAGE YOU,
AND THE BOARD TO, YOU KNOW, WE
DO HAVE HEARINGS ON THEIR
ADMINISTRATION OF THEIR, YOU
KNOW, THEIR WORK, BUDGET
HEARINGS TO DECIDE WHETHER THEY
SHOULD GET ANY MORE RESOURCES
FROM THE STATE FOR THE WORK THAT
THEY DO. AND THOSE DO PROVIDE
OPPORTUNITIES TO CHALLENGE THEM
ON THEIR LACK OF RESPONSIVENESS,
BECAUSE I THINK IT'S SOMETHING
THAT I'M SURE THERE'S UNANIMITY
AROUND. THE PANEL OF CONCERN. I,
I'M HAPPY TO SUPPORT YOUR BILL
TODAY. I'M WORRIED THAT, NOT THE
ISSUE SO MUCH THE ISSUE OF
TEETH, BUT, YOU KNOW, THIS IS
GOING TO GO TO THE GOVERNOR
WHO'S GOING TO DEFEND IT.
ADMINISTRATION AND YOU'RE
RAISING REALLY RAISING CONCERNS
NOW ABOUT THE ADMINISTRATION
THAT THAT HE LEADS. AND SO IT'S
PROSPECTS, ARE SOMEWHAT DIM
BECAUSE OF THAT, BECAUSE OF THE
CRITICISM THAT YOU LEGITIMATELY
ARE RAISING, AND WE'LL SEE. BUT
I THINK YOU HAVE THE RIGHT TO
ADVANCE THE BILL AND SEE IF YOU
CAN, FORCE THEM TO, TO ADDRESS
THE CONCERNS THAT YOU'RE RAISING
. SO WITH THAT, I WANT TO
ENTERTAIN A MOTION ON THE BILL,
MOVE THE ITEM. OKAY. SO THIS IS
A, DO PASS TO GOVERNMENTAL
ORGANIZATION. ALL RIGHT. WITH
THAT, THE SECRETARY, PLEASE CALL
THE ROLL. SENATORS GLASER.
GLASER A DOLLY. DOLLY. AYE.
ASHBY. ASHBY. AYE. BRADFORD.
BRADFORD. AYE. DODD. PADILLA
SKINNER. 4 TO 0. ALL RIGHT.
THANK YOU. MEMBERS. THANK YOU.
TO GET OUT. WE'LL HOLD THE ROLL
OPEN FOR ABSENT MEMBERS. I'LL BE
RIGHT BACK. OKAY. THANK YOU.
OKAY WE HAVE ANOTHER AUTHOR HERE
PRESENT. SENATOR ALVARADO GILL,
WELCOME TO THE COMMITTEE. I WANT
TO INVITE YOU TO COME UP WITH
YOUR WITNESSES SO WE CAN HEAR
YOUR BILL. THIS IS, FILE ITEM
EIGHT, SB 1261, SB 1261. YOU MAY
BEGIN WHENEVER YOU'RE READY.
THANK YOU SO MUCH. TIME HERE, IS
YOUR MICROPHONE ON? TRY THAT
AGAIN. ALL RIGHT. THERE WE GO.
THANK YOU SO MUCH, MR. CHAIR,
CHAIR. GLAZIER, I AM HERE TO
PRESENT SENATE BILL 1261, THAT
WOULD ADJUST THE PERCENTAGE OF
THE DEPARTMENT OF FOOD AND
AGRICULTURAL BUDGET DEDICATED TO
FAIRS AND EXPOSITION FUND FROM
THREE FOURTHS OF 1% TO 5% FOR
MORE THAN 70 YEARS, THE SOURCE
OF STATE FUNDING FOR CALIFORNIA
FAIRS WAS DEPENDENT ON HORSE
RACING LICENSE FEES. IN 22,009,
THE LEGISLATURE RECOGNIZED THE
NEED FOR A NEW SOURCE OF FUNDING
FOR THE CONTINUATION OF FAIRS
AND THUS CONTINUOUSLY
APPROPRIATING 32 MILLION FROM
THE STATE'S GENERAL FUND TO BE
PAID INTO THE FAIRS AND
EXPOSITION FUND. HOWEVER, IN THE
2011 2012 BUDGET ACT, THIS
ELIMINATED THOSE GENERAL FUND
CONTRIBUTIONS REQUIRING FAIRS TO
BE SELF-SUFFICIENT. TO ADDRESS
THE PROBLEM, THE LEGISLATURE
ENACTED AB 1499 IN 2017, WHICH
DIRECTED THE GOVERNOR'S BUDGET
PROPOSAL TO INCLUDE THREE
FOURTHS OF 1% OF THE AMOUNT OF
REVENUE FROM SALES AND USE TAXES
GENERATED ON FAIR GROUNDS TO BE
ALLOCATED BACK TO THE FAIRS. THE
FAIRS AND EXPOSITION FUND
SUPPORTS PROJECTS AT FAIRS THAT
ADDRESS DEFERRED MAINTENANCE,
EMERGENCY SERVICES, PROTECTION
OF FAIR PROPERTY, AND THE HEALTH
AND SAFETY OF VISITORS WITHOUT
AN ADJUSTED PERCENTAGE DEDICATED
TO THE FAIRS AND EXPOSITION
FUND, OUR CALIFORNIA FAIRS RUN
THE RISK OF NOT RECEIVING THE
NECESSARY FUNDING THEY NEED,
ALTHOUGH WE HAVE SOME OF
CALIFORNIA FAIRS THAT ARE
SELF-SUFFICIENT AND THAT RUN
QUITE WELL, THESE ARE IN
PARTICULARLY URBAN AREAS OF
CALIFORNIA. THE INEQUITIES
THROUGHOUT THE RURAL COMMUNITIES
THAT REALLY DEPEND ON THE FAIRS
FOR, EMERGENCY SERVICES, FOR THE
CENTER OF COMMUNITY ARE NOT
SEEING THE SAME, LUCRATIVE,
RESPONSE FROM SELF-SUFFICIENCY
ENTERPRISES HERE TO TESTIFY IN
SUPPORT OF IS SARAH CUMMINGS,
PRESIDENT AND CEO OF THE WESTERN
FAIRS ASSOCIATION. THANK YOU.
WELCOME TO THE COMMITTEE. GOOD
MORNING, CHAIR AND COMMITTEE.
THANK YOU FOR HAVING ME. SARAH
CUMMINGS, WESTERN FAIRS
ASSOCIATION, AND THANK YOU,
SENATOR, FOR, FOR ALL OF THOSE
WONDERFUL COMMENTS. WE'RE IN
FULL SUPPORT AND CERTAINLY
APPRECIATE YOUR UNDERSTANDING OF
THE NEED TO IMPROVE OUR
FAIRGROUNDS. THE STATE ASSETS,
SERVE THEIR COMMUNITY
COMMUNITIES IN SO MANY DIFFERENT
WAYS. AND THE INCREASING OF THE
METRICS OF THIS, INCREASING THE
PERCENTAGE IN THIS METRIC WOULD
CERTAINLY SUPPORT THE ONGOING
IMPROVEMENTS TO THESE LOCAL
COMMUNITY CENTERS. GREAT. THANK
YOU FOR YOUR TESTIMONY. ANYONE
ELSE HERE IN THE HEARING ROOM
WOULD LIKE TO TESTIFY IN FAVOR
OF THIS MEASURE? PLEASE COME UP
TO THE MICROPHONE. ALL RIGHT.
SEEING NONE, ANYONE HERE IN
OPPOSITION, SEE NO ONE IN
OPPOSITION WILL BRING THE MATTER
BACK TO THE COMMITTEE FOR
QUESTIONS OR COMMENTS, SENATOR,
THANK YOU FOR YOUR CONTINUED
WORK IN THIS AREA. I HAVE A FAIR
AND PLEASANTON IN ALAMEDA COUNTY
THAT I KNOW WOULD APPRECIATE THE
MEASURE THAT'S BEFORE BEFORE US
TODAY. I'M HAPPY TO SUPPORT IT.
ANY CLOSING COMMENTS YOU WANT TO
MAKE, I WOULD JUST LIKE TO
INVITE ALL OF YOU TO PARTAKE IN
THIS YEAR'S FAIRS IN YOUR
DISTRICT, AND IF YOU DON'T HAVE
A FAIR IN YOUR DISTRICT, I
WELCOME YOU TO VISIT ONE OF THE
TEN FAIRS IN MY DISTRICT. TEN.
IS THAT RIGHT? THAT'S RIGHT.
THAT MAY BE THE RECORD IN COUNTY
FAIRS. THAT'S A VERY BUSY
SCHEDULE FOR YOU. IT IS. WE KICK
OFF FAIR SEASON NEXT MONTH. A
FUN ONE, YES. NEVERTHELESS,
VISIT ALL OF THEM. ALL RIGHT. IS
THERE A MOTION FROM THE
COMMITTEE? THE SENATOR BRADFORD
MOVES. THIS IS A Dð PASS TO
APPROPRIATIONS. SECRETARY,
PLEASE CALL THE ROLL. SENATORS.
GLAZER GLAZER. AYE, DOLLY ASHBY.
ASHBY. AYE. BRADFORD. BRADFORD.
AYE DODD. PADILLA. SKINNER. 3 TO
0. ALL RIGHT. THAT BILL WILL BE
PUT ON CALL FOR ABSENT MEMBERS.
THANK YOU VERY MUCH. IT'S MY
FIRST PRESENTATION TO THIS
COMMITTEE. IS THAT RIGHT FOR
MUCH FOR THE FOR THE WARM
INVITATION. SO YOU GET OUR
EVALUATIONS. BUT I THOUGHT YOU
DID VERY WELL. I WILL DO THAT.
YOUR YELP REVIEW OUTSIDE. ALL
RIGHT. WE'RE LOOKING FOR AUTHORS
HERE IN THE SENATE COMMITTEE ON
REVENUE TAX. WE HAVE A NUMBER OF
AUTHORS THAT, SENATOR BECKER,
SENATOR PADILLA, SENATOR RUBIO,
SENATOR NEWMAN, SENATOR NGUYEN,
WANT TO INVITE YOU TO THE
COMMITTEE ROOM. I THINK THE
BUDGET COMMITTEE IS JUST
FINISHING UP, JUST FINISHING UP.
YES, SENATOR BRADFORD IS OFFERED
, AND I ACCEPT THAT MOTION ON
CONSENT. WE HAVE FIVE BILLS ON
CONSENT, ITEMS, ONE, THREE,
FIVE, 12 AND 13. THE SECRETARY,
PLEASE CALL THE ROLL ON THE
CONSENT CALENDAR. MOTION IS
ADOPT THE CONSENT CALENDAR.
SENATORS. GLASER. GLASER I DOLLY
. ASHBY. ASHBY I BRADFORD.
BRADFORD I DODD. PADILLA.
SKINNER. 3 TO 0. PUT THAT ON
CALL FOR ABSENT MEMBERS. WE'LL
GO THROUGH THE LIST OF BILLS
THAT WE HAVE HEARD. IF MEMBERS
WANT TO MAKE A MOTION, IT WOULD
BE IN ORDER. FIRST WE HAD CIERTO
ITEM TWO. ANY MOTION TO BE MADE
ON THAT AT THE MOMENT, HEARING
NONE. WE'LL MOVE ON TO ITEM SIX.
SENATOR PORTANTINO 1192. ANY
MOTION TO BE MADE ON THAT? I'M
HAPPY TO MAKE A MOTION. ALL
RIGHT. THAT'S A Dð PASS TO
APPROPRIATIONS. THIS IS SENATE
BILL 1192. SECRETARY, PLEASE
CALL THE ROLL. SENATOR GLASER.
GLASER. AYE. DOLLY ASHBY. ASHBY.
AYE. BRADFORD. BRADFORD AYE.
DODD. PADILLA. SKINNER. 3 TO 0.
THAT'S 3 TO 0. BE PUT ON. CALL
FOR ABSENT MEMBERS. LET'S MOVE
NEXT TO FILE ITEM TEN. THIS IS
SB 1059 BY SENATOR BRADFORD. CAN
WE COME BACK TO THAT IN JUST A
SECOND? SURE. WE'LL WE'LL PAUSE
ON THAT ONE OKAY. ALL RIGHT.
WE'RE LOOKING FOR AUTHORS.
AUTHORS, PLEASE COME FORWARD. WE
COULD ADJOURN THE COMMITTEE.
THAT WOULDN'T BE GOOD, THERE'S
AN AUTHOR. NO, THERE'S A MEMBER,
NOT AN AUTHOR. OH, JUST A MEMBER
. SINCE WE HAVE SENATOR DODD
HERE, WE CAN, WHILE WE'RE
WAITING FOR AUTHORS, WHY DON'T
WE GO THROUGH THE ROLE ONE MORE
TIME AND ALLOW SENATOR DODD TO,
ADD ON WHEN HE GETS READY? WE'LL
BEGIN WITH THE CONSENT CALENDAR.
THAT'S AN EASY ONE. SO THE
SECRETARY COULD OPEN THE ROLL ON
THE CONSENT CALENDAR. MOTION IS
ADOPTED. CONSENT CALENDAR.
SENATORS. DOLLY DODD DODD I
PADILLA. SKINNER, 4 TO 0. BACK
ON CALL. SENATOR DODD, WE'RE
NEXT GOING TO MOVE TO, FILE ITEM
SIX BY SENATOR PORTANTINO 1192.
IF YOU'RE READY. I'M READY.
OKAY. SECRETARY, PLEASE OPEN THE
ROLL. MOTION IS TO PASS TO
APPROPRIATIONS WITH THE CHAIR
VOTING. AYE. VICE CHAIR.
CURRENTLY, NO VOTE RECORDED.
SENATORS. DOLLY DODD. DODD. AYE.
PADILLA. SKINNER 4 TO 0. THAT IS
ENOUGH VOTES TO GET OUT. WE'LL
PUT THE MATTER ON. CALL FOR
ABSENT MEMBERS. MOVING NEXT TO
FILE ITEM EIGHT. THIS IS SB 1261
BY SENATOR ALVARADO GILL.
SECRETARY OPENED THE ROLL.
MOTION IS TO PASS TO
APPROPRIATIONS WITH THE CHAIR
VOTING AYE AND THE VOTE RECORDED
FOR THE VICE CHAIR. SENATOR
DOLLY DODD. DODD AYE. PADILLA
SKINNER, 4 TO 0. ALL RIGHT.
WE'LL PUT THAT ON CALL FOR
ABSENT MEMBERS. MOVE NEXT TO
FILE ITEM NINE. THIS IS SENATOR
ALLEN'S 1436. THE SECRETARY.
PLEASE OPEN THE ROLL. MOTION IS
TO PASS TO THE GOVERNMENTAL
ORGANIZATIONS COMMITTEE WITH THE
CHAIR VOTING AYE AND VICE CHAIR
VOTING AYE. SENATORS DODD. DODD.
AYE. PADILLA. SKINNER 5 TO 0.
PUT THAT MATTER ON. CALL FOR
ABSENT MEMBERS. ALL RIGHT, SO
THAT'S A PAUSE. STILL LOOKING
FOR AUTHORS. LOOKING FOR
AUTHORS. WE'RE GOING TO TAKE A
SHORT RECESS WHILE WE WAIT FOR
AUTHORS.
ALL RIGHT. THE SENATE COMMITTEE
ON REVENUE. TAX WILL COME BACK
TO ORDER. WE, WE HAVE AN AUTHOR
HERE, SO WE'RE GOING TO MOVE
NEXT TO FILE ITEM NUMBER SEVEN.
THIS IS SB 1230 BY SENATOR RUBIO
. I WOULD INVITE SENATOR RUBIO
TO COME ON UP.
SENATOR RUBIO, THE FLOOR IS
YOURS. GOOD MORNING EVERYONE,
THANK YOU SO MUCH, MR. CHAIR,
MEMBERS OF THIS COMMITTEE TODAY,
I'M PROUD TO PRESENT SB 1230,
THE STOP AND SEIZE ILLEGAL
TOBACCO PRODUCTS ACT. WE ALL
KNOW THAT PUBLIC HEALTH EFFECTS
OF SMOKING CIGARETS AND VAPING
FLAVORED TOBACCO PRODUCTS.
CALIFORNIA HAS MADE GREAT
PROGRESS ON REDUCING THE USE OF
TOBACCO PRODUCTS, INCLUDING
ADOPTING A RECENT BAN ON SELLING
FLAVOR TOBACCO PRODUCTS THAT I
KNOW THE CHAIR KNOWS VERY, VERY
WELL SINCE HE WAS ALSO A
COAUTHOR TO THAT BILL. BUT MORE
WORK NEEDS TO BE DONE IN THAT
RESPECT BECAUSE WE NEED TO MAKE
SURE THAT OUR LAWS ARE BEING
ENFORCED AS A SCHOOL TEACHER, I
KNOW ALL TOO WELL THAT
CALIFORNIA STUDENTS CONTINUE TO
HAVE EASY ACCESS TO ADDICTIVE
VAPES WITH FLAVORED DESIGNED TO
APPEAL TO STUDENTS. I PASSED A
LOT OF BILLS, AND I'VE TRIED TO
PASS A LOT OF BILLS ON THIS ON
THIS ISSUE BECAUSE WE KNOW THAT
OUR STUDENTS ARE STILL GOING
INTO THE RESTROOM AND VAPING AND
DOING ALL THESE, YOU KNOW,
INAPPROPRIATE THINGS AND TOBACCO
CONTINUES TO BE ONE OF THOSE
ISSUES THAT, YOU KNOW, WE NEED
TO TACKLE. I BELIEVE SOMETIMES
THESE BAD ACTORS ARE
SPECIFICALLY FLAVORING TOBACCO
AND TRYING TO MARKET TO OUR
KIDS. AND SO WHAT THIS BILL DOES
IS SB 1230 WILL STRENGTHEN THE
ENFORCEMENT OF CALIFORNIA'S
ANTI-TOBACCO LAWS AND ENSURE
THAT FLAVORED TOBACCO PRODUCTS
ARE KEPT OFF THE STORE SHELVES
AND OUT OF THE HANDS OF STUDENTS
, WHICH IS CRITICALLY IMPORTANT,
NOT TO ME, BUT TO ALL OF THE
MEMBERS. I'M SURE THE COMMITTEE
SB 1230 WILL AUTHORIZE EMPLOYEES
OF THE CALIFORNIA DEPARTMENT OF
TAX AND FEE ADMINISTRATION TO
CEASE AND DESTROY FLAVORED
TOBACCO PRODUCTS DISCOVERED
DURING THEIR REGULAR INSPECTIONS
OF TOBACCO RETAILERS AND
WAREHOUSES. THE DEPARTMENT
ALREADY HAS THE AUTHORITY TO DO
THIS. THEY ALREADY HAVE THE
AUTHORITY TO SEIZE AND DESTROY
TOBACCO PRODUCTS THAT FAIL TO
INCLUDE THE PROPER STATE TAX
STAMP. SO THIS BILL IS JUST
SIMPLE. IT'S A COST EFFECTIVE
WAY OF THE DEPARTMENT TO REMOVE
FLAVORED TOBACCO PRODUCTS FROM
THE MARKET. SB 1230 ALSO
INCLUDES A REASONABLE INCREASE
OF THE EXISTING CIVIL PENALTIES
IMPOSED ON RETAILERS WHO BREAK
THE LAW BY CONTINUING TO SELL
THESE PRODUCTS OR BY SELLING
TOBACCO PRODUCTS TO PEOPLE UNDER
21 YEARS. AGE OF OLD, WHICH
HAPPENS OFTEN. THE FINE AMOUNT
HASN'T CHANGED IN 20 YEARS, SO
THERE IS A MODEST CHANGE, BUT IT
GOES A LONG WAY IN TRYING TO
DETER THE USE OF TOBACCO
PRODUCTS. SO ONCE AGAIN, THE
STOP THE SEIZE AND ILLEGAL
TOBACCO PRODUCTS ACT IS
SPONSORED BY A COALITION OF
PUBLIC HEALTH ADVOCATES, THE
AMERICAN LUNG ASSOCIATION AND
THE CAMPAIGN FOR TOBACCO FREE
KIDS. AND THE BILL HAS NO
OPPOSITION TODAY, JOINING ME IS
TWO INDIVIDUALS. I'M GOING TO
START WITH ANYA, WHO IS HERE TO
TESTIFY. AND, MR. GIBBS, WHO
WILL BE ANSWERING ANY TECHNICAL
QUESTIONS YOU MAY HAVE. THANK
YOU. SENATOR RUBIO. WELCOME. HI
MY NAME IS ANANYA PINNAMANENI.
I'M A SENIOR IN HIGH SCHOOL IN
CALIFORNIA, VÀ, AND I'M SPEAKING
ON BEHALF OF THE AMERICAN CANCER
SOCIETY. CANCER ACTION NETWORK.
SO AS A HIGH SCHOOL STUDENT
MYSELF, I'VE SEEN THAT TOBACCO
USAGE IS A GROWING ISSUE AMONG
MY PEERS, AND FOR EXAMPLE, IN MY
SCHOOL, THERE'S ONE BATHROOM
THAT'S ACTIVELY AVOIDED BY THE
STUDENT BODY. IT'S KNOWN AS THE
VAPE BATHROOM BECAUSE THERE'S
ALWAYS A GROUP OF STUDENTS
VAPING IN THERE. AND A SURVEY
WAS CONDUCTED BY MY SCHOOL
NEWSPAPER WHERE WE ASKED THE
STUDENTS AND FACULTY WHAT
PERCENTAGE OF STUDENTS DO YOU
THINK HAVE USED, E-CIGARETTE OR
TOBACCO PRODUCT AT LEAST ONCE,
AND THE RESPONSES RANGED FROM 31
TO A SHOCKING 70% OF THE STUDENT
BODY. AND PROBLEMATICALLY,
FLAVORS ARE THE REASON THAT SO
MANY OF THESE YOUTH ARE GETTING
HOOKED ON TO THESE TOBACCO
PRODUCTS. SOME OF MY CLOSE
FRIENDS HAVE STARTED USING
E-CIGARETTES, AND THEY STARTED
WITH JUST ONE FLAVOR THAT MAYBE
SOMEONE OFFERED THEM AT A PARTY,
LIKE BLUE RASPBERRY, BUT THEN
NOW THEY HAVE TO TRY ALL OF THE
FLAVORS PINK LEMONADE, BUBBLEGUM
, ICED MANGO, THE LIST GOES ON.
IT'S BECOME LIKE TRYING ICE
CREAM FLAVORS FOR THEM, AND THEY
KNOW THAT TOBACCO IS BAD FOR
THEIR HEALTH. THEY KNOW IT'S
KILLING THEIR LUNGS. THEY'VE
BEEN TAUGHT THIS FOR YEARS, YET
THESE FLAVORS ARE MASKING THE
HARSHNESS OF THE TOBACCO
PRODUCTS AND MAKING THE KIDS
FEEL LIKE IT'S JUST A HARMLESS
TREAT THAT THEY CAN TAKE.
ALTHOUGH CALIFORNIA VOTERS
OVERWHELMINGLY VOTED TO PASS THE
LAW AND END THE SALE OF FLAVORED
TOBACCO PRODUCTS WITH
PROPOSITION 31, THERE'S STILL
GAPS IN THE ENFORCEMENT OF THIS
LAW, AS CAN BE SEEN IN SCHOOLS
JUST LIKE MINE. INSTEAD OF KIDS
CONSUMING LESS TOBACCO, THEY'RE
CONSUMING EVEN MORE CLEARLY.
MORE WORK IS NEEDED TO END THE
AVAILABILITY OF FLAVORED TOBACCO
PRODUCTS IN CALIFORNIA. THAT'S
WHY I'M HERE TODAY TO URGE YOU
ALL TO PASS SENATE BILL 1230,
BECAUSE STUDENTS NEED TO BE
FOCUSING ON DEVELOPING LIFE
SKILLS, SPENDING TIME WITH OUR
FAMILY AND FRIENDS, STUDYING FOR
OUR CLASSES, AND PREPARING FOR
OUR FUTURE CAREERS WHERE WE WILL
BE THE ONES TAKING CHARGE OF OUR
SOCIETIES IN THE FUTURE. WE
CAN'T BE CAUGHT UP IN DEFENDING
OURSELVES FROM THOSE WHO ARE
TRYING TO EXPLOIT US BY SELLING
ILLEGAL TOBACCO PRODUCTS, WHICH
IS WHY IT IS SO IMPORTANT FOR
THE CALIFORNIA DEPARTMENT OF TAX
AND FEE ADMINISTRATION TO HAVE
THE AUTHORITY TO PROTECT US. IT
IS VITAL THAT ACTION IS TAKEN ON
THIS MATTER RIGHT NOW TO PREVENT
EVEN MORE FUTURE GENERATIONS
FROM FALLING VICTIM TO THESE
CYCLES OF ADDICTION. THANK YOU.
THANK YOU SO MUCH. YES, SIR. MR.
GIBBS. YES THANK YOU, TIM GIBBS
WITH THE CAMPAIGN FOR TOBACCO
FREE KIDS, PROUD CO-SPONSOR OF
THIS BILL, HERE TO ANSWER ANY
TECHNICAL QUESTIONS. BUT I DID
JUST WANT TO SAY THAT THIS BILL
IS GENIUS FOR ITS SIMPLICITY. I
MEAN, CDTFA PERSONNEL ARE
ALREADY INSPECTING RETAILERS TO
ENSURE THAT THEY HAVE A TAX
STAMP. THIS WOULD BE AN
EFFICIENT AND COST EFFECTIVE WAY
TO ENSURE THAT TOBACCO RETAIL
BUYERS ARE OBEYING THE NEW LAW.
YOU KNOW, WE'VE HEARD STORIES OF
CDTFA COMPLIANCE STAFF WHO HAVE
GONE INTO STORES. THEY SEE BOXES
OF MENTHOL CIGARETS IN THE BACK
STOREROOM. THEY SEE OBVIOUSLY
ILLEGAL KID FRIENDLY FLAVORED
E-CIGARETTES, AND THEY RECOGNIZE
THE ILLEGALITY OF THESE
PRODUCTS. YET THEY'RE HAMSTRUNG
IN THE ABILITY TO DO ANYTHING
ABOUT IT. SO IF THIS BILL WERE
TO BECOME LAW, THOSE CDTFA STAFF
WOULD BE ABLE TO SEIZE THESE
ILLEGAL PRODUCTS THEY COME
ACROSS DOING THEIR NORMAL,
DUTIES. SO THIS IS A SIMPLE YET
EFFECTIVE WAY TO ENSURE THAT THE
PROMISE OF SB 793 IS UPHELD. ALL
RIGHT. THANK YOU, MR. GIBBS.
ANYBODY ELSE HERE IN THE HEARING
ROOM THAT WANTS TO DO A. ME TOO.
IN FAVOR? PLEASE COME TO THE
MICROPHONE. NORA LYNN WITH
CHILDREN NOW IN SUPPORT. THANK
YOU. Kò. BRUCE AMERICAN LUNG
ASSOCIATION IN SUPPORT. THANK
YOU, JAMIE MORGAN, ON BEHALF OF
THE AMERICAN HEART ASSOCIATION,
A PROUD CO-SPONSOR. THANK YOU.
ALL RIGHT. ANYBODY ELSE HERE IN
THE HEARING ROOM? ALL RIGHT.
WE'RE GOING TO MOVE TO
OPPOSITION NOW. ANYONE HERE IN
OPPOSITION TO THE MEASURE?
PLEASE COME FORWARD. SEEING
NONE, WE'LL BRING THE MATTER
BACK TO THE COMMITTEE FOR
COMMENTS OR QUESTIONS. MEMBERS.
COMMENTS OR QUESTIONS. SENATOR
ASHBY? YEAH, THANK YOU VERY
MUCH, WHAT'S YOUR WITNESSES
NAME? SENATOR RUBIO. YEAH. ANON,
NICE TO MEET YOU. AND DO YOU
WHERE DO YOU LIVE? DO YOU LIVE
HERE IN SACRAMENTO, IN SAN
RAMON, IN SAN RAMON. OKAY. AND
YOU DID A REALLY GOOD JOB WITH
YOUR TESTIMONY. THAT WAS GREAT
WORK. VERY BRAVE OF YOU. SO
SMART AND TO COME AND TALK TO
THE COMMITTEE ON REVENUE AND
TAXATION. THÀNH. THAT'S
IMPRESSIVE. CONGRATULATIONS TO
YOU ON YOUR HARD WORK AND
ADVOCACY FOR YOUNG PEOPLE TODAY.
SENATOR RUBIO, AS YOU KNOW, WHEN
I WAS AT THE LOCAL LEVEL HERE, I
CHAMPIONED THIS EXACT BILL IN
THE CITY OF SACRAMENTO. SO WE NO
LONGER SELL FLAVORED, VAPE AND
TOBACCO PRODUCTS IN SACRAMENTO
AND PARTICULARLY CANNOT TARGET
KIDS. THIS IS A PASSION OF MINE
AS WELL. I SHARE THIS WITH YOU
AND YOUR SISTER AND MANY OTHER
MEMBERS OF THE WOMEN'S CAUCUS
THAT WE ALL BELIEVE SO STRONGLY
THAT WE NEED TO DO WHAT WE CAN
TO PROTECT YOUNG PEOPLE. I
APPRECIATE YOUR CREATIVE
APPROACH HERE. THIS IS VERY
INTELLECTUAL AND SMART, AND I'M
PROUD TO SUPPORT IT TODAY. AND
WE'LL MOVE THE ITEM AT THE
APPROPRIATE TIME. ANY OTHER
COMMENTS OR QUESTIONS FROM
MEMBERS? SENATOR DODD YEAH, IT
MAY HAVE BEEN SAID, BUT THEY
CANNOT, DESTROY TOBACCO
PRODUCTS. NOW, IF THEY FIND THAT
THESE YOU KNOW, THEY'RE
VIOLATING THE LAW. YEAH, BUT
WHAT THIS DOES, IS IT, THIS IS
ALREADY LAW. THIS I KNOW IT
TARGET THE ONES THAT ARE THAT
CONTINUE TO DO IT. AND SO
THERE'S A PENALTY ATTACHED TO
NOW CATCHING THEM. STILL DOING
IT, INCREASING THE PENALTY. DO
YOU WANT TO ADDRESS SOMETHING.
SURE, IF I COULD, THE, THIS BILL
WOULD CDTFA AGENTS GO INTO,
TOBACCO RETAILERS TO CHECK FOR
TAX STAMPS WHEN THEY SEE AN
ILLEGAL FLAVORED PRODUCT? THEY
DON'T HAVE THE AUTHORITY TO
SEIZE THOSE PRODUCTS. THIS BILL
WOULD CHANGE THAT AND GIVE THEM
THAT AUTHORITY. BUT THE ISSUE IS
WHETHER THEY CAN DESTROY THEM.
AND THIS THEY NEED THIS
LEGISLATION TO DESTROY THEM WHEN
THEY FIND THEM. RIGHT. THAT'S
THE QUESTION. AND SEIZE THEM IN
THE FIRST PLACE. YEAH. OKAY.
BOTH BOTH THINGS SEEM TO APPLY
TO THE BILL. OKAY. THANKS.
SENATOR DODD. ANYTHING ELSE,
SENATOR RUBIO, THANKS FOR YOUR
LEADERSHIP IN THIS SPACE. AS YOU
KNOW, AS A JOINT AUTHOR WITH
SENATOR HILL OF THE ORIGINAL
BILL TO BAN FLAVORED TOBACCO,
THIS IS SOMETHING CLOSE TO MY
HEART, AND I THINK IT'S AN
EXCEPTIONAL BILL, THE STUDENT
FROM SAN RAMON. THANKS FOR
REPRESENTING SAN RAMON. MY
DISTRICT. REALLY GOOD JOB WITH
THAT. SENATOR RUBIO, DO YOU WANT
TO CLOSE? YEAH. THANK YOU. AND,
YOU KNOW, I WAS ALSO A COAUTHOR
TO YOUR BILL, SO I KNOW THAT
WE'VE ALL BEEN TRYING REALLY
HARD TO ADDRESS THIS ISSUE. AND
IT JUST CONTINUES TO PERSIST, AS
OUR STUDENTS SHARED. I MEAN,
THEY'RE STILL GOING INTO THE
RESTROOMS, AND CLEARLY THEY'RE
ALWAYS BEING TARGETED. OUR YOUTH
CONTINUES TO BE TARGETED. SO WE
NEED TO MAKE SURE WE SEND A
MESSAGE THAT WE WILL NOT
TOLERATE IT. AND WITH THAT, I
ASK FOR AN AYE VOTE. THANK YOU,
SENATOR RUBIO. I WANT TO
RECOGNIZE THE MOTION FROM
SENATOR ASHBY. THIS IS A DO PASS
TO HEALTH WITH THAT, THE
SECRETARY, PLEASE CALL THE ROLL.
SENATOR GLASER. GLASER AYE.
DOLLY. DOLLY. NO. ASHBY ASHBY.
AYE. BRADFORD. BRADFORD. AYE.
DODD DODD. AYE. PADILLA.
PADILLA. AYE SKINNER. 521. ALL
RIGHT. THAT BILL IS, HAS ENOUGH
VOTES. 5 TO 1. WE'LL PUT IT ON
CALL FOR ABSENT MEMBERS. THANK
YOU. ALL RIGHT. I SEE SENATOR
NEWMAN, WHO I KNOW IS DOUBLE
BOOKED THIS MORNING BECAUSE I AM
AS WELL SENATOR NEWMAN IS
BRINGING TO US ITEM FOUR, THIS
IS SB 1164. WE INVITE HIM TO
COME ON UP WITH HIS WITNESSES
AND WE'LL HEAR THE BILL. THANK
YOU. SENATOR NEWMAN. MORNING,
MEMBERS. GOOD MORNING, MR.
CHAIR. I AM CHAIRING, SENATE
EDUCATION RIGHT NOW. THERE'S A
GUY ON MY COMMITTEE WHO LOOKS
JUST LIKE YOU, AND HE HASN'T
HASN'T HE HASN'T BEEN THERE, I
THANK YOU FOR THE OPPORTUNITY TO
PRESENT SB 1164, WHICH WILL
DEFER THE PROPERTY TAX
ASSESSMENT ON A NEWLY
CONSTRUCTED ADU FOR A PERIOD OF
15 YEARS, OR UNTIL THE PROPERTY
IS SOLD, BEFORE I BEGIN, I'D
LIKE TO MAKE CLEAR THAT I AM
ACCEPTING THE COMMITTEE
AMENDMENTS AND THANK THE
COMMITTEE'S CONSULTANT, CARL
GRINNELL, FOR HIS CUSTOMARY GOOD
WORK ON THIS BILL. THE
AMENDMENTS CLARIFY A NUMBER OF
TECHNICAL DETAILS WHILE ADDING A
SUNSET OF FIVE YEARS. AS YOU'RE
ALL WELL AWARE, CALIFORNIA,
ESPECIALLY WORKING CLASS
CALIFORNIANS, CONTINUE TO
GRAPPLE WITH A DAUNTING SHORTAGE
OF AFFORDABLE HOUSING. IT'S AN
OFT CITED FACT THAT THE
DEPARTMENT OF HOUSING AND
COMMUNITY DEVELOPMENT ESTIMATES
THAT OVER THE LAST DECADE,
HOUSING PRODUCTION FELL ON
AVERAGE 100,000 UNITS SHORT OF
ESTIMATED NEED ANNUALLY. AMONG
THE VARIOUS POLICY REMEDIES
ADOPTED IN RECENT YEARS, ONE
APPROACH TOWARD INCREASING
CALIFORNIA'S SUPPLY OF HOUSING
STOCK, WHICH HAS RECEIVED
PARTICULAR ATTENTION FROM THIS
LEGISLATURE, ESPECIALLY WITH
RESPECT TO NEIGHBORHOODS WHERE
OTHER FORMS OF DEVELOPMENT MAY
BE EITHER UNPROFITABLE OR
UNPOPULAR, IS THE CONSTRUCTION
OF ACCESSORY DWELLING UNITS,
ALSO REFERRED TO AS ADUS. ALSO
KNOWN AS SECOND UNITS IN-LAW
APARTMENTS, OR THE EVER POPULAR
GRANNY FLATS. OVER THE PAST
DECADE, THE LEGISLATURE HAS
ADOPTED A SERIES OF MEASURES
RELATED TO ADUS INTENDED TO
REDUCE BARRIERS THAT WERE
IDENTIFIED AS HINDERING THE PACE
OF ADU CREATION ACROSS THE
STATE. THOSE BARRIERS, WHICH
INCLUDED ADMINISTRATIVE ZONING,
AND OTHER ISSUES, WERE FOR THE
MOST PART ON THE MUNICIPAL OR
SUPPLY SIDE, WHERE MUCH LESS HAS
BEEN DONE AND WHERE THIS BILL IS
FOCUSED IS IN RELATION TO THE
DEMAND SIDE OF THE EQUATION.
HOMEOWNERS FOR WHOM AN ADU MAY
BE A GOOD INVESTMENT, BUT TO
WHOM THE FINANCES SEEM DAUNTING.
AS THE ANALYSIS NOTES,
DISPARITIES IN HOME OWNERSHIP IN
CALIFORNIA CARRY THROUGH TO
DISPARITIES IN HOMEOWNERS WHO
CAN CONSTRUCT ADUS. ACCORDING TO
HOUSING EXPERTS, HOMEOWNERS WHO
CONSTRUCT DATA USE TEND TO BE
MUCH MORE AFFLUENT AND LESS
LIKELY TO IDENTIFY AS PEOPLE OF
COLOR THAN THE TYPICAL
CALIFORNIA HOMEOWNER. FOR THESE,
HOUSEHOLDS ARE ALSO LIKELY TO
HAVE SUBSTANTIALLY LESS BY WAY
OF SAVINGS OR ACCESS TO CREDIT,
MAKING THE PROSPECT OF BUILDING
AN ADU MORE THAN A LITTLE
DAUNTING. ADD TO THAT THE FACT
THAT WHEN A NEW ADDITION TO A
HOME OR ADU IS BUILT, THE NEWLY
CONSTRUCTED PORTION OF THE
PROPERTY IS IMMEDIATELY ASSESSED
AT 1% OF THE VALUE OF THE SQUARE
FOOTAGE JUST ADDED AN AMOUNT
THAT IS THEN APPENDED TO THE
PROPERTY OWNER'S NEXT YEARLY
PROPERTY TAX BILL. AS AN
EXAMPLE, AN ADU ASSESSED AT A
VALUE OF $200,000 WOULD INCUR AN
IMMEDIATE PROPERTY TAX INCREASE
TO THAT HOMEOWNER OF $2,000 A
YEAR. THE PROSPECT OF SUCH AN
INCREASE TO AN OWNER'S PROPERTY
TAX BURDEN, ESPECIALLY ON TOP OF
THE EXPENSE AND COMPLEXITY
ASSOCIATED WITH THE CONSTRUCTION
OF AN ADU, APPEARS TO SERVE AS A
SUBSTANTIAL DISINCENTIVE FOR
WORKING CLASS HOMEOWNERS TO
BUILD ADUS, EVEN IF THEY MIGHT
OTHERWISE REAP THE BENEFITS OVER
THE LONG TERME. BY PAUSING THE
PROPERTY TAX INCREASE ASSOCIATED
WITH THE CONSTRUCTION OF A NEW
ADU, PROPERTY OWNERS WILL BE
FURTHER INCENTIVIZED TO INCREASE
THE OVERALL PRODUCTION OF ADUS
ACROSS THE STATE. SUCH AN
ALLOWANCE WILL BETTER ALIGN
MARKET FORCES WITH THE STATE'S
BROADER HOUSING GOALS BY
ENHANCING AN INDIVIDUAL
HOMEOWNERS COST BENEFIT
PERSPECTIVE AS IT RELATES TO
CONSIDERING THE CONSTRUCTION OF
AN ACCESSORY DWELLING UNIT, YOUR
ANALYSIS FURTHER NOTES THAT
BASED ON CURRENT LEVELS OF ADU
PRODUCTION, THE BOARD OF
EQUALIZATION ESTIMATES THAT SB
1164 WOULD RESULT IN A TOTAL OF
$19 MILLION IN PROPERTY TAX
REVENUE LOSS STATEWIDE. AND
WHILE I'M GENERALLY SYMPATHETIC
TO THE OPPOSITION'S CONCERNS
ABOUT PROPERTY TAX REVENUE LOSS,
THE LEGISLATURE SHOULD BALANCE
THIS PERSPECTIVE. COST WITH THE
EQUITY BENEFITS OF ENCOURAGING
ADU CONSTRUCTION IN
NEIGHBORHOODS MOST IN NEED BY
HOMEOWNERS WHO MIGHT OTHERWISE
NOT BE SO INCLINED. I WOULD ALSO
POINT OUT THAT CITIES ARE NOT
CURRENTLY SUBSTANTIALLY RELYING
ON THE REVENUE GENERATED FROM
ADUS, AND CITIES WOULD STILL
RECEIVE THE PERMITTING AND
IMPACT FEES ASSOCIATED WITH ADU
CONSTRUCTION. AS ALLOWED FOR
UNDER EXISTING LAW. MOREOVER,
THIS IMPACT WOULD OBVIOUSLY VARY
ACROSS CITIES AND IN CITIES SUCH
AS ANAHEIM AND SANTA ANA, AND IN
ORANGE COUNTY AND OTHER LOW
INCOME COMMUNITIES IN YOUR OWN
DISTRICTS WHERE THE PROPERTY TAX
EXEMPTION MAY JUMPSTART ADU
CONSTRUCTION AND BENEFIT WORKING
CLASS HOMEOWNERS WHO MAY NOT
OTHERWISE BUILD ADUS, THIS CAN
BE EXPECTED TO BE MORE THAN
OFFSET OVER TIME. FURTHER, THE
ANTICIPATED INCREASE IN ADU
PRODUCTION WILL ALSO HELP MANY
CITIES ACHIEVE COMPLIANCE WITH
THEIR RINA TARGETS, SOMETHING
WHICH MANY CITIES ARE CURRENTLY
STRUGGLING TO ACHIEVE. I'M FULLY
COMMITTED TO WORKING WITH
STAKEHOLDERS TO MITIGATE ANY
POSSIBLE UNINTENDED NEGATIVE
IMPACTS OF THIS BILL AND TO
ENSURE THAT IMPLEMENTATION AND
ADMINISTRATION FOR LOCAL
ASSESSORS IS AS SIMPLE AS
POSSIBLE. IF WE'RE SERIOUS ABOUT
OUR COMMITMENT TO INCREASING
AFFORDABLE HOUSING ACROSS THE
STATE AND BELIEVE THAT ADUS ARE
A CRITICAL PIECE OF THIS. IN
ADDITION TO THE WORK WE'VE DONE
REMOVING ADMINISTRATIVE HURDLES,
WE SHOULD ALSO LOWER REAL AND
PERCEIVED COST BARRIERS TO MAKE
ADUS A MORE APPEALING AND
FEASIBLE OPTION FOR WORKING
CLASS HOMEOWNERS. WITH ME TO
TESTIFY IS DEBORAH COLTON OF THE
CALIFORNIA APARTMENT
ASSOCIATION. I AM RESPECTFULLY
ASKING FOR YOUR I VOTE. THANK
YOU, SENATOR NEWMAN, TO YOUR
WITNESS. GOOD MORNING, MR.
CHAIRMAN. MEMBERS DEBORAH
CARLTON WITH THE CALIFORNIA
APARTMENT ASSOCIATION. NOW, I
KNOW APARTMENT IS IN OUR NAME,
BUT OUR LARGEST MEMBER ARE
SINGLE FAMILY HOMEOWNERS. MANY
OF THOSE WHO HAVE RENTAL SINGLE
FAMILY RENTALS AND MANY OF THEM
HAVE ADUS. THE CALIFORNIA
APARTMENT ASSOCIATION WAS ONE OF
THE FIRST SPONSORS BACK IN THE
EARLY 2000, WITH THE
ASSEMBLYMEMBER BLUM, IN WHICH WE
ENCOURAGED ADU CONSTRUCTION. WE
THINK IT'S AN EASY, WAY TO BUILD
HOUSING LESS HURDLES. AS YOU
KNOW, MULTIFAMILY CAN TAKE UP TO
TEN YEARS, TO PERMIT AND ADUS
HAVE BEEN SOMETHING OF VALUE, IN
OUR LOCAL COMMUNITIES, WE THINK
THAT SB 1164 IS AN INCREDIBLY
HELPFUL BILL TO ENCOURAGE MORE
ADUS. AND EVEN IF, THE TAX
BENEFITS ARE NOT REALIZED
IMMEDIATELY, THEY WILL REALIZE
IT OVER TIME. BECAUSE OF COURSE,
IF WE DON'T BUILD ADUS, THEY
DON'T GET THE MONEY ANYWAY, ADUS
ARE VERY VALUABLE FOR OUR YOUNG
TEACHERS, OUR YOUNG INDIVIDUALS
WHO ARE ENTERING THE MARKET,
WORKING MARKET. AND WE THINK
THAT THIS IS INCREDIBLY
VALUABLE, BILL. AND WE ASK FOR
YOUR AYE VOTE TODAY. THANK YOU.
THANK YOU, MISS CARLTON. ANYONE
ELSE HERE IN THE HEARING ROOM
WANT TO TESTIFY IN FAVOR? PLEASE
COME TO THE MICROPHONE. GOOD
MORNING. GOOD MORNING, MR.
CHAIR. AND SENATORS ROSANNA
CARVACHO ELLIOTT HERE, ON BEHALF
OF THE CITY OF ALAMEDA AND
ISLAND CITY IN THE SAN FRANCISCO
BAY AREA IN SUPPORT OF SB 1164,
ACKNOWLEDGING WHAT THE SENATOR
SAID IN TERMS OF THE IMPORTANCE
OF ADUS AND GETTING THESE BUILT
TO HELP WITH THE HOUSING CRISIS.
THANK YOU VERY MUCH. THANK YOU
VERY MUCH. ANYONE ELSE HERE IN
THE HEARING ROOM IN FAVOR? ALL
RIGHT. WE'LL MOVE TO OPPOSITION.
ANYONE HERE IN OPPOSITION TO THE
MEASURE WANT TO COME FORWARD?
YOU HAVE THE OPPORTUNITY TO
TESTIFY. YOU WANT TO COME TO THE
FRONT TABLES, OR YOU CAN DO A ME
TOO. AT THE MICROPHONE.
GOOD MORNING, MR. CHAIR. AND
MEMBERS. MARCUS DETWILER WITH
THE CALIFORNIA SPECIAL DISTRICTS
ASSOCIATION, ALONG WITH THE
CALIFORNIA STATE ASSOCIATION OF
COUNTIES AND THE LEAGUE OF
CALIFORNIA CITIES, WE ARE
RESPECTFULLY OPPOSED TO SB 1164.
SB 1164 PROPOSES, IN OUR VIEW, A
SOLUTION IN SEARCH OF A PROBLEM,
THE CONTENTION BELIED BY SB 1164
IS THAT THE FAIR AND PROPER
ASSESSMENT OF PROPERTY TAXES IS
SERVING AS A SUBSTANTIAL
DETERRENT TO THE CONSTRUCTION OF
ADUS, AND IS SOMEHOW EXISTING AS
A SUBSTANTIAL BARRIER TO THE
DEPLOYMENT. THEIR DEPLOYMENT IN
THE STATE OF CALIFORNIA. WE FIND
THAT THE DATA DO NOT BEAR THIS
OUT. ACCORDING TO THE LETTER
THAT WE SUBMITTED TO THE
COMMITTEE, SINCE 2018, THERE
HAVE BEEN YEAR OVER YEAR
INCREASES IN THE NUMBER OF ADUS
BEING PERMITTED AND CONSTRUCTED
IN THE STATE OF CALIFORNIA,
ACCORDING TO DATA PUBLISHED BY
THE UC BERKELEY CENTER FOR
COMMUNITY INNOVATION. FROM THE
PERIOD OF TIME FROM 2018 TO
2022, A TÊ WAS CONSTRUCTED IN
THE STATE TOTALED OVER 10,000,
WITH OVER 28,000 PERMITS ALSO
BEING APPLIED FOR DURING THAT
TIME. ACCORDING TO RECENT
REPORTING BY THE SACRAMENTO BEE,
A CEO OF A ADU DESIGN AND
MANUFACTURING FIRM REPORTS THAT
SINCE 2016, THE DEMAND FOR ADUS
HAS INCREASED 20 FOLD, AND USING
A DATA POINT FROM THAT SAME
ARTICLE, ADU APPLICATIONS AS A
PERCENTAGE SHARE OF HOUSING
PERMIT. HOUSING PERMITS ISSUED
OVERALL IN SACRAMENTO JUMPED
FROM 2.5% TO NEARLY 10% IN THE
PERIOD OF TIME RUNNING FROM 2020
TO 2023. ADDITIONAL DATA POINTS
IN THE SAME NATURE ARE CONTAINED
IN THE THOUGHTFUL ANALYSIS
PREPARED BY THE COMMITTEE STAFF.
AND AS WE'VE SEEN, THE RESIDENTS
ARE WAITING IN LINE IN ORDER TO
GET ADU FIRMS TO MANUFACTURE THE
ADUS FOR THEM. IN SHORT, DEMAND
FOR ADUS IS ROBUST IN CALIFORNIA
, SB 1164 WOULD INSTEAD HAVE US
IGNORE ALL OF THIS DATA AND
INSTEAD DECIDE TO COMMIT TO
SLASHING PROPERTY TAX RECEIPTS
THAT ARE VITAL FOR LOCAL
AGENCIES TO PROVIDE SERVICES TO
THEIR COMMUNITIES. THE PROPERTY
TAX CUTS THAT ARE BEING PROPOSED
BY THIS BILL WOULD RESULT IN THE
DIMINISHMENT OF MILLIONS OF
DOLLARS ANNUALLY TO THE
OPERATIONAL BUDGETS OF LOCAL
AGENCIES AND IT WILL BE
DISPROPORTIONATELY FELT BY THOSE
LOCAL AGENCIES THAT HEAVILY OR
ALMOST ENTIRELY RELY ON PROPERTY
TAX RECEIPTS, LIKE FIRE
PROTECTION DISTRICTS, MOSQUITO
AND VECTOR DISTRICTS AND PARKS.
ALSO, THIS BILL IN PRINT
CONTAINS IMPLEMENTATION
CONCERNS, ALTHOUGH WE DID HEAR
THAT THE AUTHOR HAS COMMITTED TO
ACCEPTING THE COMMITTEE
AMENDMENTS. HOWEVER, THE BILL IN
PRINT DOES PROPOSE CONCERNS AS
IT RELATES TO THE GOOD FAITH
EFFORT RELATED TO MAINTAINING
THE ADU FOR RESIDENTIAL HOUSING,
AS A RESULT OF THE LACK OF
SPECIFICITY IN THE BILL IN
PRINT, WE VIEW THIS AS
POTENTIALLY RIPE FOR ABUSE, IN
SHORT, WHILE WE ARE SENSITIVE TO
THE FACT THAT THERE IS A HOUSING
AFFORDABILITY CRISIS IN
CALIFORNIA, WE DO BELIEVE THAT
IT IS NOT SOLVED BY CUTTING THE
REVENUES THAT ARE RELIED ON
LOCAL SERVICES PROVIDERS IN
ORDER TO PROVIDE CALIFORNIA
COMMUNITY WITH THE VITAL,
ESSENTIAL LOCAL SERVICES THAT
THEY RELY ON. FOR THESE REASONS,
WE ARE RESPECTFULLY OPPOSED TO.
1164 THANK YOU, MR. DETWILER.
THE OTHER WITNESS, PLEASE, TWO
MINUTES. HI. GOOD MORNING. STILL
KATIE HARDIMAN WITH THE
CALIFORNIA TEACHERS ASSOCIATION,
NOT USED TO BEING UP HERE SO
CLOSE, BUT UNFORTUNATELY SCARY.
REALLY NOT SCARY, CTA IS
UNFORTUNATELY OPPOSED TO THIS
BILL, WE APPRECIATE THE GOAL AND
INTENT. THE SHORTAGE OF
AFFORDABLE HOUSING AFFECTS ALL
THE MEMBERS, THE STUDENTS AND
FAMILIES THAT WE SERVE, HOWEVER,
WE CANNOT SUPPORT A SOLUTION
THAT REDUCES PROPERTY TAX
REVENUE. I WON'T GET INTO ALL
THE DETAILS ON SCHOOL FINANCE
AND PROPOSITION 98 IN THIS
COMMITTEE, BUT I WILL, IN SHORT,
SAY THAT WHEN THE STATE IS IN
WHAT'S CALLED TEST ONE WITHIN
PROP 98, EDUCATION RECEIVES A
MINIMUM PERCENTAGE OF GENERAL
FUND REVENUES PLUS ITS SHARE OF
LOCAL PROPERTY TAX REVENUE.
THEREFORE, ANY REDUCTION IN
PROPERTY TAXES REDUCED THE
OVERALL PROPOSITION 98 LEVEL FOR
OUR SCHOOLS AND COMMUNITY
COLLEGES, WHILE WE WANT TO
INCENTIVIZE ADDITIONAL HOUSING,
WE ALSO HAVE CONCERNS THAT THE
EXISTING OR THAT THIS EXCLUSION
WOULD PROVIDE A WINDFALL FOR
THOSE HOMEOWNERS WHO WOULD HAVE
ALREADY BUILT AN ADU ADU,
REGARDLESS OF THIS BILL. SO FOR
THESE REASONS, CTA IS OPPOSED.
THANK YOU VERY MUCH. ANYONE ELSE
HERE IN THE COMMITTEE ROOM WANT
TO COME UP TO THE MICROPHONE AND
DO A ME TOO, IN OPPOSITION. GOOD
MORNING. I'M ERIC LARA, SPEAKING
ON BEHALF OF THE CALIFORNIA
STATE ASSOCIATION OF COUNTIES.
THE URBAN COUNTIES OF CALIFORNIA
AND THE RURAL COUNTY
REPRESENTATIVES OF CALIFORNIA IN
RESPECTFUL OPPOSITION. THANK
YOU. THANK YOU, SIR. NEXT UP,
GOOD MORNING, BEN TRIFFO WITH
THE LEAGUE OF CALIFORNIA CITIES
AND RESPECTFUL OPPOSITION. THANK
YOU. GOOD MORNING, HONORABLE
CHAIR AND MEMBERS, ROB GROSS
WITH THE CALIFORNIA ASSESSORS
ASSOCIATION. APPRECIATE THE
AUTHORS WORKING WITH US AND THE
COMMITTEE AMENDMENTS. BUT WE
STILL HAVE SOME CONCERNS
REGRETTABLY, ARE OPPOSED. THANK
YOU. GREAT. THANK YOU. ANYONE
ELSE HERE IN THE HEARING ROOM?
IN OPPOSITION. ALL RIGHT. SEEING
NONE, WE'LL BRING THE MATTER
BACK TO THE COMMITTEE FOR
QUESTIONS AND COMMENTS. SENATOR
DOLLY. THANK YOU, MR. CHAIR. SO
GOSH, WE ALL WANT HOUSING, BUT
AT THE EXPENSE OF. SO AS
SOMEBODY WHO REPRESENTS 15
COUNTIES AND A LOT OF, VERY
RURAL IN NATURE COUNTIES THAT
MAYBE HAVE VERY FEW CITIES IN
THEIR COUNTIES. AND SO THE
PROPERTY TAX, THAT IS AVAILABLE
TO THEM TO DO SO, I WANT TO JUST
MAYBE TALK TO YOU A LITTLE BIT
ABOUT OR ASK THE QUESTION ABOUT
HOW ARE THESE SPECIAL DISTRICTS.
SO I HAVE SEVERAL SPECIAL
DISTRICTS. SO WATER SEWER THAT
ARE HAVING TO DO MANY UPGRADES,
DUE TO REGULATION FOR CLEAN
WATER AND ALL THESE OTHER
THINGS. BUT IF YOU HAVE NO
REVENUE COMING IN AND YOU CAN'T,
DO THOSE UPGRADES, I MEAN, THIS
THIS IS THE TAX THAT ACTUALLY
GOES TO THOSE SPECIAL DISTRICTS,
FIRE, SEWER, WATER, AND I KNOW
THAT YOU'RE SAYING THAT. YEAH,
OVER TIME WHEN IT SELLS. BUT IF
IT DOESN'T SELL, IT'S. AND A LOT
OF PEOPLE DON'T MOVE. THEY'RE
GETTING THE, THE PROFIT OF
HAVING AN ADU, BUT THEY'RE NOT
PAYING THEIR FAIR SHARE. AND
EVERYBODY ELSE THAT DOESN'T HAVE
AN ADU IS ON THE HOOK TO, PAY
FOR THOSE SERVICES THAT THEY
NEED. IS THAT A QUESTION FOR
SENATOR? YEAH. SO ALL RIGHT,
SENATOR NEWMAN, HOW ARE THEY
GOING TO PAY THE BILL, I GUESS?
WELL, SO AS MY TESTIMONY NOTED,
YOU KNOW, THIS THIS DOESN'T
WAIVE, THE OTHER FEES OR, YOU
KNOW, PERMANENT OR OTHER FEES
ASSOCIATED WITH THE
CONSTRUCTION. RIGHT. SO, SO IT
BUT, YOU KNOW, IF YOU DO THE
MATH. RIGHT. SO $19 MILLION
ESTIMATED BY THE BOARD OF
EQUALIZATION, YOU KNOW, LET'S
SAY OUT OF THE 482 CITIES IN
CALIFORNIA, 200 ARE MID-SIZED
CITIES THAT THAT REALLY WOULD
BENEFIT FROM ADDITIONAL HOUSING
CAUSED BY GROWTH. THAT'S A NET
OF $95,000 PER CITY. RIGHT? SO,
SO NOT A TON OF MONEY, RIGHT?
MONEY'S REAL. EVERYBODY BUT, YOU
KNOW, THE ARGUMENT HERE IS THAT
OVER TIME, THERE'S A NET BENEFIT
TO THAT. I'D ARGUE THAT IN YOUR
DISTRICT THERE WOULD BE VERY YOU
KNOW, THERE'S NOT A HUGE NEED
FOR ADUS. THIS IS MOSTLY FOR
OTHER CITIES THAT HAVE OTHER
PARAMETERS. AND SO I'M OPEN TO
AN AMENDMENT THAT WOULD THAT
WOULD TAKE CARE OF THOSE CASES.
AND WE'RE HAPPY TO CONTINUE TO
DISCUSS THAT. SO IF YOU HAVE NOT
A NON INCORPORATED CITY AND YOU
SO I'LL JUST TAKE FOR EXAMPLE
THE TOWN WHERE I GET MY MAIL,
WHICH IS BIEBER'S NOT
INCORPORATED. IT'S AN
UNINCORPORATED TOWN, BUT IT HAS
A WATER SYSTEM, A SEWER SYSTEM,
ALL THAT WHICH IS DERIVED FROM
PROPERTY TAX. THEY GET A
PERCENTAGE OF THE PROPERTY TAX
COMES BACK TO THAT SPECIAL
DISTRICT. THEY'RE NOT ABLE TO
RAISE THEIR RATES BECAUSE OF
PROP 218. THEY CAN'T GET THE TAX
PASSED AND THEY'RE STUCK. AND
THEY HAVE ALL THESE REGULATIONS.
IF WE DO GET SOME BUILDING,
THAT'S THE ONE PLACE THAT WE GET
A BUMP IN OUR REVENUE. AND IT
ACTUALLY HELPS PROVIDE THE
SERVICES THAT ARE MANDATED BY
THE STATE. AND SO I'M CONCERNED
THAT FOR THOSE REASONS THAT THIS
BILL, IT'S AND WE SEE WE DON'T.
SO WE GET WE HAVE A SOLAR
EXEMPTION. SO SOLAR DOESN'T PAY.
AND SO PRETTY SOON THE LOCALS
DON'T GET ANYTHING. AND AT THE
END OF THE DAY THEY HAVE THEY
HAVE A SERVICE THEY HAVE TO
PROVIDE WITH NO WITH NO MONEY.
ALL RIGHT. SO YOU KNOW, THIS
BILL IS ACTUALLY INTENDED TO
ENCOURAGE ADU CONSTRUCTION IN
CITIES THAT WOULD HAVE BENEFIT
FROM IT. THEN TYPICALLY THEY'RE
LOWER INCOME, HIGHER DENSITY.
YOUR CITIES PROBABLY DON'T FIT
THAT DESCRIPTION. AGAIN I'M
HAPPY TO INCLUDE LANGUAGE MOVING
FORWARD THAT WOULD COVER THAT
THAT CASE, BECAUSE IT WON'T
AFFECT THE GOALS OF THE BILL,
AND IT MIGHT ADDRESS YOUR
CONCERNS. ALL RIGHT. ANY FURTHER
DISCUSSION OR COMMENTS? SENATOR
DODD? YES, THROUGH THE CHAIR.
HAS THERE BEEN THE ANALYSIS?
SEEMS TO ME THAT NUMBER SEEMS TO
BE VERY LOW. I MEAN, GIVEN THE,
YOU KNOW, THE INCENTIVE 15 YEARS
OF PROPERTY, PROPERTY TAX RELIEF
ON THAT SPECIFIC ITEM. AND SO
I'M JUST WONDERING IF THERE'S
ANY FURTHER ANALYSIS IN TERMS OF
AN AVERAGE VALUE. OR MAYBE I
SHOULD ASK A DIFFERENT WAY. YOU,
YOU CAME UP WITH $19 MILLION. SO
HOW MUCH PER DWELLING WAS THAT?
I THINK 19 MILLION IS THE TOTAL
REVENUES PER YEAR GENERATED BY
ADU CONSTRUCTION. RIGHT. SO
IT'S, YOU KNOW, AGAINST THAT'S
ACROSS THE WHOLE STATE. RIGHT.
THAT'S A PRETTY SMALL SHARE. NO,
BUT I'M TRYING TO GET TO WHAT
THE NUMBER WAS IN TERMS OF
EVALUATION OF AN EDU ON THE TAX
TO DERIVE A $19 MILLION TAX,
BECAUSE I JUST KNOW IN THE AREAS
THAT IN THE AREA I REPRESENT
FOR, FOR EXAMPLE, NAPA, YOU
KNOW, IT WOULD PROBABLY HAVE A
PRETTY DECENT ASSESSMENT, MAYBE
IN OTHER AREAS IT DOESN'T. SO,
YOU KNOW, THE MATH IS SIMPLY 1%
OF THE ASSESSED VALUE OF THE
NEWLY CONSTRUCTED SQUARE
FOOTAGE. YOU KNOW, ACROSS THE
STATE, 100 CALCULATED BY THE BOE
. I DON'T KNOW, YOU COULD
PROBABLY DO IT. SO ADU WOULD
GIVE YOU $2,000. YEAH, RIGHT. SO
I GUESS, YOU KNOW, LOOK LOOK AT
I WANT I IT THE IT VARIES A
GREAT DEAL BY COUNTY. IT DOES IT
VARIES A GREAT DEAL. IT SEEMS
LIKE IT SHOULD BE
STRAIGHTFORWARD, BUT IN FACT IT
VARIES A GREAT DEAL. AND IT IS
UP TO THE ASSESSOR. THERE ARE
THE BROAD RULES OF WHAT ANY, YOU
KNOW, NEW CONSTRUCTION OF LIKE
THIS SHOULD BE ASSESSED.
HOWEVER, THERE ARE SOME
ASSESSORS WHO ARE, IF THEY, IF
THEY ARE CALCULATING ON THE
BASIS OF WHAT THEIR RENTAL VALUE
WILL BE OR THE RESALE VALUE
VERSUS THE CONSTRUCTION COSTS,
SO THEN THAT CAN VARY HUGELY BY
COUNTY. OKAY. SO THERE'S YOU
KNOW, THERE'S A MOMENT PLEASE.
SO THAT WAS SENATOR SKINNER
PRIOR TO THAT WAS SENATOR DALY
WITH HER OBSERVATIONS ON THE
ACCOUNTING PRACTICES OF
COUNTIES. I BEFORE I GO TO
SENATOR NEWMAN, I WANT TO GIVE
SENATOR DODD AN OPPORTUNITY TO
CLARIFY ANY FURTHER. SO TO
FINISH AND IT MAY IT'S WE'RE
CERTAINLY NOT GOING TO NEGOTIATE
ANYTHING HERE. I'D LIKE TO
SUPPORT THE BILL TODAY IF I CAN,
BUT YOU DEFINITELY CAN. THAT IS
FULLY POSSIBLE TODAY TO ME. TO
ME, THE BENEFIT HERE TO ME THE
BENEFIT OF 15 YEARS OF PROPERTY
TAX AVOIDANCE EXCEEDS THAT IS AN
EXCESSIVE INCENTIVE IN MY MIND.
OKAY, I PARTICULARLY IN MY
COUNTY, I PROBABLY SHOULD NOT
SAY THIS. SO WE PUT IN 15 YEARS
AS KIND OF A STARTING POINT,
AGAIN, OPEN TO THE CONVERSATION.
YOU KNOW, THAT WAS THE STARTING
POINT. THE COMMITTEE DID ADD A
SUNSET, RIGHT OF FIVE YEARS. AND
SO WE SHOULD HAVE WE SHOULD HAVE
SOME DATA WITHIN FIVE YEARS AS
TO WHETHER OR NOT THIS HAS MADE
A MEANINGFUL DIFFERENCE IN
INCREASING THE NUMBER OF ADUS
THAT, YOU KNOW, AGAIN, THE
THEORY IS THAT OTHERWISE
WOULDN'T BE BUILT RIGHT THERE,
OTHERWISE WOULD NOT HAVE BEEN
BUILT. AND NOT TO BE
ARGUMENTATIVE, BUT THE TESTIMONY
THAT WE HEARD TODAY SUGGESTED
THERE'S A ROBUST MARKET ALREADY
FOR ADUS. AND SO PERHAPS THIS
THIS INCENTIVE AND SO WHAT I'M
LOOKING FOR IS A NARROW IF WE'RE
GOING TO DO THIS, WE HAVE TO
NARROW IT DOWN BECAUSE I THINK
15 YEARS IS EXCESSIVE. I MEAN,
I'LL COMMIT TO WRITE IT DOWN.
ALL RIGHT. ANY OTHER COMMENTS OR
QUESTIONS FROM COMMITTEE
MEMBERS? I'M GOING TO GIVE YOU
AN OPPORTUNITY TO CLOSE SENATOR
NEWMAN, SENATOR PADILLA, THANK
YOU VERY MUCH, MR. CHAIRMAN. I
APPRECIATE WHERE THE AUTHOR IS
TRYING TO GO. AND I'M ALONG WITH
SENATOR DODD, INCLINED TO GIVE
YOU EVERY OPPORTUNITY TO REFINE
SORT OF THE FRAMEWORK. I HAVE
GRAVE CONCERNS ABOUT ANY. NET
REDUCTION IN PROPERTY TAX
RECEIPTS IN THIS CONTEXT. I HAVE
GRAVE CONCERNS ALSO ABOUT NOT
NECESSARILY THE BEST CLARITY
AROUND THE FORMULA OR STANDARD
THAT'S BEEN APPLIED IN THE
ANALYSIS, EITHER ABOUT HOW WE
QUANTIFY VÌ, WHAT THE ACTUAL
REAL IMPACT HERE IS. AND THOSE
ARE BOTH GREATLY CONCERNING TO
ME. BUT I WANT TO I WANT TO GIVE
THE AUTHOR EVERY CHANCE TO TRY
TO CONTINUE TO HAVE DIALOG AND
GET CLARITY AROUND IT. BUT I
WANT TO PUT ON THE RECORD, MR.
CHAIRMAN, THAT THERE'S SOME
GRAVE CONCERNS. THANK YOU. I
WANT TO CLOSE THIS. UNLESS
THERE'S SOMETHING ELSE THAT'S
IMPORTANT, LET ME JUST SAY,
SENATOR NEWMAN, I, I APPRECIATE
YOUR FOCUS IN THIS AREA. I THINK
IT'S A IT'S AN IMPORTANT PLACE
FOR REALLY MAKING A DIFFERENCE
IN THE HOUSING AFFORDABILITY
SPACE. AND SO I THINK YOUR
LEADERSHIP IN THAT IS VERY
WORTHY AND IMPORTANT. I, TOO,
SHARE THE CONCERNS ABOUT THE
IMPACTS, THAT THIS WOULD HAVE
AND WHETHER OR NOT IT CREATES
THE RIGHT INCENTIVE OR
DISINCENTIVES OR PEOPLE MIGHT
TAKE ADVANTAGE OF IT WHEN THEY
WERE BUILDING ANYWAY, BUT ALL
THAT BEING SAID, I WANT TO GIVE
YOU THE OPPORTUNITY TO REFINE
THE BILL AND IMPROVE IT. IF IT
MOVES FORWARD OUT OF THIS
COMMITTEE. WITH THAT, I'LL
SUPPORT IT TODAY. ALL RIGHT.
ANYTHING FURTHER, SENATOR
NEWMAN, YOU WANT TO CLOSE? AND
THANK YOU. I APPRECIATE IT, MR.
CHAIR. YOU KNOW, SO THE ACTUALLY
THE GENESIS OF THIS BILL, IT
CAME FROM A CITY PLANNER IN THE
CITY OF ANAHEIM, THE CITY OF
ANAHEIM HAS DONE A LOT OF GOOD
WORK IN STREAMLINING THEIR ADU
PROCESS. IN FACT, THEY HAVE A
SET OF PRE-APPROVED PLANS.
RIGHT? AND YOU KNOW, AND THEY
WILL GUIDE PEOPLE TO RESOURCE,
INCLUDING CONSTRUCTION, LOAN,
RESOURCES TO DO THIS. AND THE
OBSERVATION, CONFORMS WITH SOME
OF THE COMMITTEE'S ANALYSIS. IT,
YOU KNOW, WEALTHY PEOPLE WHO ARE
WELL SITUATED ARE BUILDING ADUS
WHERE LOWER INCOME PEOPLE WHO
COULD REALLY BENEFIT FROM THEM,
WHOSE NEIGHBORHOODS REALLY
DESPERATELY NEED THEM, ARE
REALLY DAUNTED BY THE PROSPECT.
SO WHEN WE LOOK AT THE DATA, IT
IS TRUE. WE'VE HAD YEAR OVER
YEAR GROWTH, BUT BUT THERE'S
PROBABLY A LARGE DELTA BETWEEN
WHAT WE'RE SEEING AND IN FACT,
THAT IS GROWING VERSUS WHAT WE
WOULD BE SEEING AND WHAT WE IN
FACT NEED IF WE'RE GOING TO MAKE
A BIG DIFFERENCE, ESPECIALLY
RELATES TO ARENA NUMBERS IN THE
CITIES THAT WOULD BENEFIT FROM
INCREASED ADU CONSTRUCTION. I AM
THIS IS A CONCEPT, AND THE IDEA
HERE IS THAT, YOU KNOW, OVER
TIME THIS WILL PROVE OUT YOU'LL
YOU'LL GET A NET BENEFIT BY WAY
OF NEW CONSTRUCTION THAT OVER
TIME WILL INCREASE THE TAX BASE.
AND WE'RE GOING TO TRY TO FIND
THE RIGHT BALANCE, BOTH IN
DURATION AND KIND OF THE OTHER
OFFSETS TO MAKE THIS WORK. AND
SO I AM MORE THAN WILLING TO
CONTINUE THIS CONVERSATION, I
LOOK FORWARD TO DISCUSSING THIS
WITH THE OPPOSITION, AND
HOPEFULLY WE CAN GET TO A BILL
THAT WILL LET US TEST THIS
THESIS, THAT THERE IS SUFFICIENT
DEMAND, IN FACT, ADDITIONAL
DEMAND THAT CAN BE SPURRED BY
NEW INCENTIVES ON THE ON THE, ON
THE ON THE DEMAND SIDE, NOT
THAT'S NOT THE SUPPLY SIDE. AND
I LOOK FORWARD TO WORKING WITH
YOU. WITH THAT, I ASK
RESPECTFULLY FOR YOUR AYE VOTE.
SEN. SEN. NEWMAN'S CLOSED. HE'S
ACCEPTED THE TACTICAL
AMENDMENTS. IS THERE A MOTION ON
THIS MEASURE? SENATOR BRADFORD
MOVES. THIS IS A Dð PASS, AS
AMENDED, TO APPROPRIATIONS.
SECRETARY, PLEASE CALL THE ROLL.
SENATORS GLASER. GLASER. AYE.
DOLLY ASHBY. ASHBY. AYE.
BRADFORD BRADFORD. AYE. DODD.
DODD. AYE PADILLA. PADILLA AYE.
SKINNER AYE. SKINNER. AYE. 6 TO
0. ALL RIGHT. THANK YOU. MEMBERS
JUST A MOMENT. WE'RE READY TO
CLOSE THE ROLL ON THAT. YOU LAID
OFF. YEAH. ALL RIGHT. THAT BILL
IS OUT 6 TO 0. THAT BILL IS OUT.
THANK YOU, SENATOR NEWMAN. I SEE
ANOTHER AUTHOR PRESENTS SENATOR
BECKER. EXCUSE ME. OH. THAT'S
DIFFERENT. STEVE SENATOR BECKER,
COME ON UP. THIS IS, THIS IS
FILE ITEM NUMBER 14, SCR 14,
SAME FILE ITEM AS THE AS THE
NUMBER ON THE BILL ON THE
RESOLUTION. SENATOR BECKER, THE
FLOOR IS YOURS. THANK YOU. OH,
GREAT. WE HAD A WITNESS IN A, IN
A HOUSE COMMITTEE, BUT WE'VE. I
THINK JUST IN TIME. THANK YOU.
GOOD AFTERNOON, CHAIR MEMBERS.
FIRST, I WANT TO THANK THE
COMMITTEE FOR ITS ANALYSIS,
WHICH WAS A FASTBALL STRAIGHT
DOWN THE MIDDLE, I CAN SAY. AND,
I HOPE THIS BILL WILL BE A HOME
RUN FOR CALIFORNIA. AND OUR MANY
PROGRAMS HERE. I ALSO ESPECIALLY
APPRECIATE THE REFERENCE TO
BOBBY BONILLA DAY, SINCE I GREW
UP ROOTING AGAINST THE METS. SO
I APPRECIATE IT. ESPECIALLY
APPRECIATED THAT, IN DECEMBER,
THE LOS ANGELES DODGERS BASEBALL
TEAM SIGNED A TEN YEAR, $700
MILLION CONTRACT WITH PITCHER
AND HITTER. THE OUTSTANDING
SHOHEI OHTANI THAT CURRENT
CONTRACT IS STRUCTURED SO THAT
OHTANI WILL DEFER $68 MILLION.
ANNUALLY, THUS ONLY RECEIVING 2
MILLION PER YEAR FOR TEN YEARS
AND ALLOWING OHTANI TO
POTENTIALLY AVOID OVER $90
MILLION IN STATE TAXES. IF HE TO
RESIDE OUTSIDE OF CALIFORNIA.
WHEN THE DEFERRED COMPENSATION
IS PAID. I WOULD VENTURE,
FRIENDS, THAT THIS IS QUITE THE
HIDDEN BALL TRICK. THE PROCESS
OF DEFERRED COMPENSATION IS
ALLOWED UNDER CURRENT FEDERAL
LAW AND CONFORMING STATE LAW
THAT ALLOWS HIGH EARNERS
UNLIMITED DEFERRALS OF
COMPENSATION. THIS CREATES AN
UNBALANCED TAX STRUCTURE AND
PERPETUATES INCOME INEQUALITY.
THE ABSENCE OF A CAP DEFERRING
COMPENSATION FOR HIGH INCOME
EARNERS HAS CREATED FURTHER
REPERCUSSIONS FOR THE FAIR
DISTRIBUTION OF TAXES AND
POTENTIAL LIMITS ON DEFERRED
COMPENSATION CAN ESTABLISH AN
EQUITABLE TAX SYSTEM FOR ALL AND
MAINTAIN POTENTIAL STATE REVENUE
. I'VE INTRODUCED THIS BILL TO
URGE CONGRESS TO ESTABLISH A
REASONABLE CAP ON DEFERRED
COMPENSATION TO RECTIFY THIS
IMBALANCE. WHILE CONGRESS HAS
PUT US IN A HOLE THAT WILL
AFFECT MANY OF OUR PUBLIC
PROGRAMS, THEY CAN RECTIFY THE
SITUATION, ALLOW US TO COME BACK
FOR THE NGUYEN, AND HOPE THIS
RESOLUTION WILL HELP US DO THAT.
AND WITH ME, I HAVE TWO
WITNESSES TODAY FROM THE
CONTROLLER'S OFFICE. I WANT TO
THANK THE COMPTROLLER FOR
SPONSORING THIS BILL AND DENNIS
VENTURA FROM THE UC DAVIS SCHOOL
OF LAW. OKAY. AND DO THEY HAVE
TO PUT THEIR, MAJOR LEAGUE
BASEBALL AFFILIATION ON THE
RECORD OR. NO, THAT'S JUST
THEY'RE NOT REQUIRED. ARE YOU A
PHILLIES FAN? ARE YOU A GIANTS
FAN? OKAY. YOUR WITNESSES PLEASE
GO AHEAD. TWO MINUTES EACH.
YEAH. I'M I'M FROM PHILADELPHIA,
SO I'M A PHILLIES FAN. SO I
APOLOGIZE FOR EVERYONE HERE, AND
I, EVAN JOHNSON, DEPUTY
COMPTROLLER FOR LEGISLATIVE
AFFAIRS AT THE COMPTROLLER'S
OFFICE REPRESENTING COMPTROLLER
COHEN, I AM NOT A TAX EXPERT,
AND WE HAVE SEVERAL TAX EXPERTS
HERE WITH US. SO I'M GOING TO
KEEP IT SHORT. AND I SIMPLY WANT
TO THANK I WANTED TO BE HERE
TODAY ON BEHALF OF THE
COMPTROLLER, TO THANK THE
SENATOR FOR HIS WORK ON THIS AND
FOR HIS SUPPORT ON THIS ISSUE.
AND ENSURING THAT THERE'S A FAIR
AND EQUITABLE TAX,
IMPLEMENTATION OF THE TAX CODE
FOR ALL. AND JUST WANTED TO
APPRECIATE THE OPPORTUNITY TO
BOTH SUPPORT AND SPONSOR THIS
RESOLUTION. GREAT. THANK YOU.
SIR, NEXT WITNESS, FOR THE
RECORD, MY FAMILY IS AN OAKLAND
A'S FAMILY, YOU KNOW, HURT ME
ONCE, BLAME ME, HURT ME TWICE,
SO I ALSO WANT TO PUT ON THE
RECORD THAT WE BOUGHT FROM MY
SON, OUR TEN YEAR OLD SON, A
SHOHEI OHTANI LOS ANGELES
DODGERS JERSEY FOR CHRISTMAS.
AND SO WE ARE IN NO WAY BIASED
FOR OR AGAINST THIS BILL, MY
NAME IS DENNIS VENTRY. I'M A
PROFESSOR OF LAW AT UC DAVIS,
WHERE I SPECIALIZE IN TAX
POLICY, TAX ADMINISTRATION, TAX
PRACTICE, AND LEGAL ETHICS. I AM
ALSO A FORMER CHAIR OF THE IRS
ADVISORY COUNCIL, SGR SGR 14
RELATES TO A FEDERAL LAW THAT
WAS ENACTED IN 1998 THAT
PURPORTS TO PREEMPT STATES FROM
TAXING, INCOME OF A TAXPAYER,
THAT IS EARNED IN A STATE, BUT
DEFER RECEIPT UNTIL A LATER
DATE. THE LAW EFFECTIVELY TURNS
THE FEDERAL DEFERRAL INTO A
STATE EXEMPTION. IT COSTS
CONGRESS NOTHING, BUT IT COSTS
STATES UNKNOWN AMOUNTS OF
REVENUE. FURTHERMORE, THE
LEGISLATIVE HISTORY REVEALS
PRETTY CLEARLY THAT THE LAW WAS
DESIGNED TO PROTECT INCOME FROM
TAX. I'M SORRY TO PROTECT FROM
TAX INCOME IN RETIREMENT PLANS
OF MODEST INCOME WORKERS. IT WAS
NOT DESIGNED TO PROTECT FROM TAX
INCOME ON MILLIONAIRES AND
BILLIONAIRES WHO DIDN'T NEED A
0% TAX RATE ON THEIR RETIREMENT
SAVINGS TO SURVIVE. NOW, IT'S
FAIR TO SAY THAT WE WOULDN'T BE
HERE TODAY, BUT FOR MR. OTANI
AND THE CONTRACT THAT HE SIGNED
WITH LOS ANGELES DODGERS, BUT
I'M HERE TO TELL YOU THAT THIS
PRACTICE HAS BEEN GOING ON FOR A
LONG TIME, PERHAPS NOT WITH
PROFESSIONAL ATHLETES YET, BUT
THE COMPENSATION PACKAGES OF
EXECUTIVES UP AND DOWN THE STATE
HAVE LONG EXPLOITED THIS
LOOPHOLE. AND THERE ARE A LOT
MORE C-SUITE EXECUTIVES IN
CALIFORNIA THAN THERE ARE
PROFESSIONAL ATHLETES, FINALLY,
I SHOULD SAY THAT IF THE IF THE.
OH, I'M SORRY. FINALLY, I SHOULD
SAY THAT IF THE NATIONAL
CONGRESS FAILS TO RESPOND TO OUR
STATE RESOLUTION URGING IT TO
RAISE THE 0% TAX RATE ON
DEFERRED INCOME OF HIGH INCOME
EARNERS, EARNERS, CALIFORNIA HAS
AT LEAST TWO OTHER FORMS OF
RECOURSE ONE, IT CAN LEVERAGE
THE JUDICIAL PRESUMPTION AGAINST
PREEMPTION. THIS IS A CLASSIC
CASE WHERE A PREEMPTION SHOULD
BE READ NARROWLY, THAT IS WHERE
IN THIS CASE, CONGRESS ONE
IGNORED STATE SOVEREIGN POLICE
POWERS TO TAX INCOME EARNED
WITHIN THEIR BORDERS, TWO BLEW A
HOLE IN STATE BUDGETS AND THREE
FACILITATED HIGH NET WORTH
INDIVIDUALS MIGRATION TO OTHER
STATES AND COUNTRIES, AND THEN
ALSO ANOTHER FORM OF RECOURSE
WOULD BE TO USE THE SUBSTANCE
OVER FORM ARGUMENTS, TO CONVINCE
COURTS THAT CONGRESS NEVER
INTENDED TO CREATE THIS 0% TAX
RATE ON DEFERRED COMP, TO HIGH
NET WORTH INDIVIDUALS. I URGE
YOU TO VOTE YES ON THE
RESOLUTION. THANK YOU, THANK
YOU. ANYONE ELSE HERE IN THE
HEARING ROOM WANT TO SPEAK IN
SUPPORT OF THE RESOLUTION?
PLEASE COME FORWARD SEEING NONE.
ANYONE HERE IN THE HEARING ROOM
WANT TO SPEAK IN OPPOSITION TO
THIS MEASURE? OKAY. SO WE'RE NOT
GOING TO DISCRIMINATE AGAINST
DODGER FANS. JUST FOR THE RECORD
, IF THEY WERE HERE, THEY COULD
TESTIFY. SENATOR DODD. SO IT'S
CLEAR IN THE LAW, IN THE FEDERAL
LAW THAT, DEFERRED COMPENSATION,
COMPENSATION, EVEN WHEN THE
DEFERRED COMPENSATION COMES DUE,
THE FACT THAT IT WAS EARNED IN A
SPECIFIC STATE MEANS NOTHING. IF
YOU FOLLOW THE QUESTION. YOU
MEAN IN TERMS OF, BECAUSE
OBVIOUSLY ALL THE INCOME IN THE
TEN YEARS WAS EARNED IN THE
STATE OF CALIFORNIA, CORRECT? IT
WAS DEFERRED UNTIL AFTER TEN
YEARS. SO HE CAN GO PRESUMABLY
HE IN THIS CASE OR MANY OTHER
EXECUTIVES CAN GO SOMEWHERE ELSE
BESIDES CALIFORNIA. BUT CLEARLY
THE INCOME WAS EARNED IN THE
STATE OF CALIFORNIA THAT THERE'S
NO FEDERAL EXEMPTION GETS DOWN
TO THAT LEVEL. YES. I MEAN,
THERE'S NO DENYING THAT THERE'S
A POSSIBILITY THAT THE EXECUTIVE
OR WHOMEVER THE, THE, THE
EMPLOYEE IS, MOVES TO ANOTHER
STATE. AND IN THE DURING THE
PERIOD OF EARNING THE INCOME AND
BEFORE RETIREMENT, SUCH THAT THE
DEFERRED COMP THEN GETS, GETS
PAID OUT, IN WHICH CASE THEN YOU
KIND OF HAVE TO SPLIT, YOU KNOW,
WHO GETS WHICH STATE, WHICH
JURISDICTION ACTUALLY IS GETTING
IS GETTING THE TAX REVENUE.
RIGHT. AND JUST TO FOLLOW UP ON
SENATOR DODD'S QUESTION, THAT
MEANS THAT IN THE CASE OF A
BASEBALL PLAYER, YOU JUST SET AN
EXECUTIVE MOVE TO ANOTHER STATE
AND EARN SOME INCOME WHILE THEY
WERE LIVING THERE. THERE WOULD
BE SOME OBLIGATION FOR A
PROFESSIONAL ATHLETE THAT
TRAVELS TO ARIZONA AND TEXAS AND
NEW YORK, ETC. ON THE BASEBALL
CIRCUIT. THOSE OBLIGATIONS ARE
TO THEY HAVE A TAX OBLIGATION IN
THOSE JURISDICTIONS, RIGHT? YES,
PRECISELY. RIGHT. SO IN FACT,
OTHER STATES ARE GOING TO HAVE
THE SAME ANXIETY THAT SENATOR
BECKER HAS EXPRESSED IN HIS BILL
TO THIS DEFERRAL ISSUE. ISN'T
THAT CORRECT? YES, YES. SO MAYBE
THAT HELPS THE CASE WITH OUR
GOOD, UNITED STATES CONGRESS.
WOULD THAT ANY OTHER COMMENTS OR
QUESTIONS TO. YES. SENATOR DALY.
SO I WANT TO MAKE A COMMENT, YOU
KNOW, WE ARE DRIVING OUT OUR
BIGGEST TAX BASE IS WEALTHY
PEOPLE. 40% OF OUR TAX GENERAL
FUND COMES FROM PEOPLE A MILLION
OR MAKING $1 MILLION OR MORE.
AND SOME OF THOSE ARE
BILLIONAIRES. AND WE HAVE SEEN
THEM MIGRATE OUT OF CALIFORNIA.
THE LAW THAT YOU'RE TALKING
TALKING ABOUT. SO MOST OF OUR
STATE EMPLOYEES WORK HERE AND
THEN RETIRE IN NEVADA BECAUSE
THERE'S ZERO AT LEAST CLOSE TO
MY HOME. MOST OF THEM MOVED TO
NEVADA BECAUSE THEIR ZERO STATE
INCOME TAX. AND SO IN THEIR
PENSION THEY'RE GAINING 600, 600
TO $1000 A MONTH MORE IN THEIR
PENSION THAT THEY RECEIVE FROM
CALIFORNIA. SO HOW WOULD THIS
AFFECT THOSE FOLKS IF THEY
CHANGE THE LAW? SOMEBODY WHO IS
A STATE EMPLOYEE WHO WORKED HERE
FOR YEARS MOVES TO NEVADA, WHO
AND GETS A BENEFIT BECAUSE OF
TAX LAW, THEY WOULD BE PENALIZED
AS WELL IF CONGRESS CHANGED
THAT. RIGHT. SO IT WOULD DEPEND
ON HOW, CONGRESS REACTED TO THE
EXTENT THAT THEY THAT THEY
REACTED TO THIS RESOLUTION, THIS
PARTICULAR FORM OF COMPENSATION
IS NONQUALIFIED COMPENSATION.
AND FOR AS THIS PARTICULAR BILL
THAT WAS ENACTED IN I MEAN, LAW
THAT WAS ENACTED IN 1995, THE
BILL STARTED IN 1991. IT ONLY
APPLIED TO PENSIONS AND
QUALIFIED PLANS, AND ONLY AT THE
LAST SECOND DID THE NON
QUALIFIED PLANS GET THROWN IN.
SO TO THE EXTENT THAT WE WERE
TALKING ABOUT HIGH INCOME
INDIVIDUALS, FOLKS LIKE SHOHEI
OHTANI, PROFESSIONAL ATHLETES,
THOSE ARE NONQUALIFIED PLANS.
THOSE ARE NOT PENSIONS AND
ANNUITIES. DEFINED BENEFIT
PLANS, DEFINED CONTRIBUTION
PLANS. WELL I THINK THAT WE
SHOULD MAYBE TRY TO FIGURE OUT
HOW TO KEEP ALL THESE PEOPLE IN
CALIFORNIA BECAUSE OUR OUR THE
BIGGEST LOSER IS CALIFORNIA. AND
WE'RE SEEING THAT NOW. I BROUGHT
THIS UP IN BUDGET WHERE WHEN THE
STOCK MARKET IS DOING WELL,
WHICH IT'S NOT TODAY, IT'S DOWN
500 POINTS TODAY, BUT IT WAS UP
OVER 38, ALMOST 39,000. IT'S THE
HIGHEST IT'S EVER BEEN. AND
WE'RE STILL SEEING A REVENUE
DROP IN CALIFORNIA. IT'S BECAUSE
OUR TAX BASE IS LEAVING AND
WE'RE NOT DOING ANYTHING TO KEEP
THEM, WE NEED TO FOCUS ON THAT.
LIKE JUST LIKE WE DID IN THE
LAST BILL. WITH ADUS. WE'RE
TRYING TO KEEP PEOPLE HERE, BUT
NOT WHEN IT COMES TO TAXES.
WE'RE PUSHING THEM OUT. WE'RE
KEEP HAMMERING ON THEM, AND
THEY'RE LEAVING AT SOME POINT.
WE GOT TO FIX THAT PROBLEM. AND
UNTIL WE DO, WE'RE GOING TO SEE
PEOPLE LEAVE CALIFORNIA. AND WE
HAVE TO HAVE A TAX BASE BEFORE
WE CAN HAVE A PRIVATE SIDE. I'M
NOT GOING TO BE SUPPORTING THIS
BILL TODAY. WE NEED TO REFORM
OUR TAX SYSTEM IN CALIFORNIA SO
THAT WE CAN ACTUALLY KEEP
BUSINESS PEOPLE HERE AND KEEP
OUR OUR STATE EMPLOYEES THAT
LEAVE AND KEEP THAT TAX BASE IN
CALIFORNIA. AND THE LAWS THAT WE
HAVE AS FAR AS TAXING GOES,
DON'T BENEFIT THOSE PEOPLE AT
ALL. THANK YOU, SENATOR DALI.
SENATOR ASHBY, THANK YOU. AS THE
MEMBER FOR SACRAMENTO, I WANT TO
TREAD VERY LIGHTLY ON ANY MLB
REFERENCE THIS WEEK. SORRY,
SENATOR SKINNER, BUT I DO WANT
TO TAKE THE MOMENT TO SAY TO YOU
, SENATOR BECKER, THAT I THINK
THIS IS A BRAVE BILL. BASEBALL
ASIDE, YOU REPRESENT A PART OF
THE STATE THAT I THINK YOU WILL
HAVE MEMBERS WHO ARE IMPACTED BY
THIS DECISION. AND I THINK IT'S
YOU ARE TRULY PUTTING FORWARD A
CONSCIENCE FOR THE REST OF THE
STATE. SO I WANTED TO TAKE THE
MOMENT TO THANK YOU FOR DOING
THAT. THANK YOU. VERY NICE, I
HAVE ANOTHER BILL TO SHARE WITH
YOU, ANOTHER HEARING ON THAT
GENERAL POINT. ALL RIGHT. ANY
OTHER COMMENTS OR QUESTIONS
SENATOR BECKER WOULD LIKE TO
CLOSE? THANK YOU. I APPRECIATE
THE DISCUSSION, AND, YEAH, I
THINK THIS IS NUMBER ONE ABOUT
DOING THE RIGHT THING. AND I
APPRECIATE THE COMMENTS OF THE
OF THE COMMITTEE. I THINK,
NUMBER ONE, THIS IS ABOUT DOING
THE RIGHT THING. WE'RE EARNING
THIS IS, THIS IS INCOME THAT IS
EARNED HERE. SHOULD BE TAXED
HERE. IN RESPONSE, SENATOR DALY,
I ACTUALLY AGREE WITH YOU.
AGAIN, I DO REPRESENT A LOT OF
THOSE HIGH EARNERS, AND I HAVE
SEEN A LOT OF PEOPLE LEAVE. AND
I THINK WE DO HAVE TO, LOOK AT
OUR TAX SYSTEM. BUT THIS IS THIS
THIS KIND OF POLICY ACTUALLY
ENCOURAGES SOMEONE TO LEAVE, AS
OPPOSED TO ENCOURAGE SOMEONE TO
STAY. AND WE WANT TO DO ALL WE
CAN TO ENCOURAGE PEOPLE TO STAY
AND TO CONTINUE TO EARN AN
INCOME AND THEN PAYING THEIR
THEIR FAIR SHARE HERE. SO WITH
THAT, RESPECTFULLY ASK FOR THE
AYE VOTE. OKAY, SENATOR BECKER,
AND THE RESOLUTION ITSELF SAYS
THAT IT ASKS CONGRESS TO
ESTABLISH A REASONABLE CAP ON
DEFERRED COMPENSATION. YES.
DOESN'T MEAN IT'S NECESSARILY
GOING TO CAPTURE RETIREES. RIGHT
AS THE AS THE ANALYSIS. RIGHT?
RIGHT. AS THE ANALYSIS MENTIONS
THAT WAS THERE AND SORT OF THE,
THE WITNESS, I THINK, ALLUDED
TO, IT WAS ORIGINALLY
CONTEMPLATED FOR PEOPLE WHO ARE
MAKING, SAY, $30,000. RIGHT,
AND, AND THE EVEN THE SENATE
JUDICIARY COMMITTEE ANALYSIS
FROM CONGRESS, THAT KIND OF
POINTS OUT THE PROBLEM THAT
WE'RE, YOU KNOW, THAT THAT THEY
WERE ACTUALLY CREATING THIS
UNLIMITED LIABILITY, WHICH IS
WHAT WE'RE NOW DEALING WITH
HERE, TRYING TO CAP. OKAY. YEAH
SENATOR DODD HAS MOVED THE BILL.
THE THIS WOULD BE A DO PASS, NO,
I GUESS BE ADOPTED TO SIMPLY BE
ADOPTED. OKAY IT'S A IT'S SIMPLY
THAT THE IT BE ADOPTED SECRETARY
. CALL THE ROLL. SENATORS.
GLASER. GLASER A DOLLY. DOLLY.
NO. ASHBY. ASHBY AYE. BRADFORD.
BRADFORD. AYE. DODD DODD. AYE.
PADILLA. PADILLA. AYE. SKINNER.
SKINNER. AYE. SIX TWO. ONE. BILL
IS OUT. 6 TO 1. CONGRATULATIONS
ON THAT, SENATOR PADILLA. I
THINK YOU'RE BATTING. OH, MAY I
MAKE ONE NOTE ABOUT THE,
ANALYSIS, SENATOR? THE COMMITTEE
ANALYSIS ON THE LAST OF THE BILL
WE JUST VOTED ON WAS VERY GOOD,
BUT I JUST WANT TO MAKE THE NOTE
THAT, MR. OTANI SHOULD BE VERY
HAPPY THAT THE DODGERS DID NOT,
PUT MAKE HIS CONTRACTUAL
ARRANGEMENT WITH SUCH THAT THEY
PUT IN THE MONEY AS WHAT
HAPPENED TO BILLY, FORGET
BILLY'S LAST NAME. BONILLA WHERE
THE METS PUT IT INTO MADOFF'S
FUND. AND I GUESSING THAT BILLY
BONILLA HAS NEVER SEEN A DIME OF
THAT. OKAY WELL, THAT WAS A
POINT OF PERSONAL PRIVILEGE BY
SENATOR SKINNER, AND WE
APPRECIATE THAT. OKAY. ALL RIGHT
, WE'RE GOING TO GO TO OUR LAST
BILL OF THE OF OUR SESSION.
SENATOR PADILLA, THIS IS FILE
ITEM NUMBER 11, SENATE BILL
1191. SENATOR PADILLA, THANKS
FOR YOUR PATIENCE TODAY AND
PARTICIPATION. AND YOU CAN BEGIN
AS SOON AS YOU'RE READY. AND
MEMBERS FOR THE OTHER MEMBERS
HERE, THEN WE'LL TAKE UP ALL THE
BILLS THAT REMAIN. SENATOR,
THANK YOU VERY MUCH. THANK YOU
VERY MUCH, MR. CHAIRMAN AND
COLLEAGUES, SB 1191 IS A
SPECIFIC CONFORMITY PROVISION, I
WANT TO BEGIN BY ACCEPTING THE
COMMITTEE'S AMENDMENTS AND THANK
YOU AND YOUR STAFF FOR WORKING
WITH US ON THIS BILL. I THINK
WE'RE WELL AWARE THAT WE
CONTINUE TO FEEL INCREASING
IMPACTS OF CLIMATE CHANGE, AND
THAT EVERY MECHANISM OR TOOL AT
OUR DISPOSAL SHOULD BE EMPLOYED
WITHIN REASON. IS YOUR WELL,
WELL, ALSO, THE 2022 FEDERAL
INFLATION REDUCTION ACT, OR ARIA
IRA, EXCUSE ME, CONTAINS SEVERAL
CLEAN ENERGY, CLEAN ENERGY
INVESTMENT INCENTIVES, AND TWO
OF THOSE PROVISIONS PROVIDE
ADDITIONAL MECHANISMS FOR
ELIGIBLE TAXPAYERS AND ENTITIES
TO MONETIZE CERTAIN CLEAN, CLEAN
ENERGY TAX CREDITS. CALIF DOES
NOT AUTOMATICALLY ADOPT THESE,
WHICH HAS CREATED A
DISCONNECTION BETWEEN THE
FEDERAL AND STATE TREATMENT OF
CLEAN ENERGY TAX CREDITS IN
CALIFORNIA. TAXPAYERS WHO SELL
THESE CREDITS MAY BE REQUIRED TO
INCLUDE THE SALE OF THE CREDITS
IN GROSS INCOME FOR FRANCHISE
TAX PURPOSES WITHOUT ALIGNMENT.
PROJECTS IN CALIFORNIA WILL NOT
BE ABLE TO ACCESS FEDERAL TAX
INCENTIVES, MAKING THESE
PROJECTS MORE EXPENSIVE, AND
THOSE COSTS WILL ULTIMATELY BE
PASSED ON TO RATEPAYERS BY
ENABLING CALIFORNIA BUSINESSES
TO UTILIZE THE INCENTIVES LAID
OUT IN THE IRA, SB 1191 WILL
ACCELERATE CLEAN ENERGY
DEVELOPMENTS IN CALIFORNIA AND
MAKE THIS ENERGY MORE AFFORDABLE
FOR OUR CONSTITUENTS. AND WITH
ME TODAY, IS STEPHANIE DOYLE
WITH THE SOLAR ENERGY INDUSTRIES
ASSOCIATION. MR. DOYLE, THE
FLOOR IS YOURS. THANK YOU, GOOD
MORNING, CHAIRS AND MEMBERS. MY
NAME IS STEPHANIE DOYLE, AND I'M
THE CALIFORNIA STATE AFFAIRS
DIRECTOR FOR THE SOLAR ENERGY
INDUSTRIES ASSOCIATION. OR THE
NATIONAL TRADE GROUP FOR THE
SOLAR INDUSTRY, REPRESENTING
OVER A THOUSAND COMPANIES ACROSS
ALL ACROSS THE SOLAR MARKET
SEGMENTS. SI IS STRONGLY
SUPPORTS SB 1191. THE BILL
SIMPLY CONFORMS CALIFORNIA TAX
LAW WITH FEDERAL TAX LAW
REGARDING THE TREATMENT OF THE
INVESTMENT TAX CREDIT, OR THE
ITC BY INVESTORS IN CLEAN ENERGY
TECHNOLOGIES. CURRENT STATE LAW
DOES NOT SUBJECT INVESTMENT TAX
CREDITS TO INCOME TAX IN
CALIFORNIA AND SB 1191 WOULD
CONTINUE THIS PRACTICE TO ENSURE
CONTINUED AND INCREASED
INVESTMENT IN CLEAN ENERGY
TECHNOLOGIES IN THE STATE. THE
INFLATION REDUCTION ACT MADE A
HANDFUL OF CHANGES TO THE
INVESTMENT TAX CREDIT, INCLUDING
EXTENDING THE SUNSET AND
ALLOWING FOR NEW MEANS OF USING
THE INVESTMENT TAX CREDIT, HENCE
NECESSITATING CONFORMING OUR
STATE TAX LAW. USE OF INVESTMENT
TAX CREDITS ENSURE GREATER
AFFORDABILITY FOR CALIFORNIA
ENERGY CONSUMERS BY TAKING FULL
ADVANTAGE OF THOSE FEDERAL
INCENTIVES THAT CAN REDUCE
PROJECT COSTS. LASTLY, I WANT TO
THANK SENATOR PADILLA, HIS TEAM
AND COMMITTEE STAFF FOR THEIR
HARD WORK ON THIS BILL. AND IF
THERE ARE ADDITIONAL TECHNICAL
QUESTIONS, SEE A MEMBER. JACK
ABADI OF US BANK IS HERE TO HELP
ME ANSWER THOSE. THANK YOU, MISS
DOYLE. ANYBODY ELSE HERE WISHES
TO TESTIFY IN FAVOR? PLEASE COME
TO THE MICROPHONE. DO Ã ME TO
BARROWS ON BEHALF OF INDEPENDENT
ENERGY PRODUCERS IN SUPPORT.
THANK YOU, MISS BARROWS. THANK
YOU. MELISSA CORTEZ ON BEHALF OF
THE CALIFORNIA WIND ENERGY
ASSOCIATION IN SUPPORT. THANK
YOU, CARA MARTINSON. ON BEHALF
OF THE LARGE SCALE SOLAR
ASSOCIATION AND SUPPORT. THANK
YOU. GOOD MORNING, MR. CHAIR AND
MEMBERS, MEGAN MURRAY WITH THE
WHITMAN GROUP, ON BEHALF OF AES
RENEWABLE CLEAN ENERGY, RWA
RENEWABLES AND SB ENERGY, ALL IN
STRONG SUPPORT. THANKS FOR YOUR
TIME. THANK YOU. GOOD MORNING,
MR. CHAIR AND MEMBERS. GRACIELA
CASTILLO, ON BEHALF OF
CALIFORNIA, THE CALIFORNIA
STORAGE ALLIANCE. THANK YOU.
GOOD MORNING, TIFFANY FAN, ON
BEHALF OF THE CALIFORNIA
EFFICIENCY AND DEMAND MANAGEMENT
COUNCIL IN SUPPORT. THANK YOU.
THANK YOU. MR. CHAIRMAN, MEMBERS
JOHN WHITE WITH THE CLEAN POWER
CAMPAIGN, WE'RE COALITION OF
ENVIRONMENTAL NGOS AND CLEAN
ENERGY COMPANIES IN SUPPORT.
GOOD AFTERNOON, MR. CHAIR AND
MEMBERS. JASON BRYANT, ON BEHALF
OF WELLHEAD ELECTRIC. WE'RE IN
SUPPORT. THANK YOU. GREAT.
ANYBODY ELSE HERE IN THE HEARING
ROOM IN SUPPORT. WE'LL GO TO
OPPOSITION. ANYONE IN THE
HEARING ROOM HERE IN OPPOSITION
WANT TO COME FORWARD. ALL RIGHT.
SEEING NONE WE'LL BRING THE
MATTER BACK TO THE COMMITTEE FOR
COMMENTS OR QUESTIONS. COMMENTS
OR QUESTIONS OKAY, SENATOR
PADILLA, WOULD YOU LIKE TO
CLOSE? THANK YOU, MR. CHAIRMAN.
RESPECTFULLY ASK FOR A VOTE. ALL
RIGHT. SENATOR SKINNER HAS MOVED
THE BILL. THIS IS A Dð PASS, AS
AMENDED. YOU TOOK THE
AMENDMENTS, IS THAT CORRECT? MR.
YES SENATOR. DO PASS IS AMENDED
TO APPROPRIATIONS. SECRETARY,
PLEASE CALL THE ROLL. SENATOR.
GLASER. GLASER. AYE, DOLLY.
DOLLEY. AYE. ASHBY. ASHBY. AYE.
BRADFORD BRADFORD. AYE. DODD.
DODD AYE. PADILLA. PADILLA. AYE.
SKINNER SKINNER. AYE. SEVEN
ZERO. ALL RIGHT. THAT BILL IS
OUT. SEVEN ZERO MEMBERS. WE'RE
GOING TO GO THROUGH THE, AGENDA
NOW FOR MEMBERS WHO WANT TO ADD
ON. JUST WAIT ONE SECOND, GOING
TO START WITH, THE CONSENT
CALENDAR. THE CONSENT CALENDAR
HAS BEEN MOVED. SECRETARY,
PLEASE OPEN THE ROLL. A MOTION
IS ADOPTED. CONSENT CALENDAR
WITH THE CHAIR VOTING AYE. THE
ABOVE RECORDED FOR THE VICE
CHAIR. SENATOR DOLLY. DOLLY.
AYE. PADILLA PADILLA. AYE.
SKINNER OKAY. YEAH. SHE KNOWS
THAT. THAT BILL 6 TO 0. THE
CONSENT CALENDAR IS APPROVED. 6
TO 0. WE'RE GOING TO MOVE NEXT
TO FILE ITEM NUMBER TWO. THERE
IS NO MOTION ON THIS. ALL RIGHT.
SENATOR DOLLY IS MOVED, FILE
ITEM TWO. THAT'S THAT'S 1086.
THIS IS A Dð PASS TO
APPROPRIATIONS. SECRETARY,
PLEASE CALL THE ROLL. SENATORS.
GLAZER. NO. GLAZER. NO DOLLY.
DOLLY. AYE. ASHBY BRADFORD.
BRADFORD. AYE. DODD. PADILLA
PADILLA. NO. SKINNER. SKINNER.
NO DODD. NO. 2 TO 4. ALL RIGHT.
THAT BILL IS DEFEATED. 2 TO 4
AND RECONSIDERATION IS REQUESTED
WITHOUT OBJECTION, IT'S BEEN
GRANTED. WE'RE GOING TO MOVE
NEXT TO FILE. ITEM FOUR IS DONE.
CORRECT. YEAH. THAT'S DONE.
WE'RE GOING TO MOVE NEXT TO FILE
ITEM NUMBER SIX. THIS IS 1192 BY
PORTANTINO SECRETARY. PLEASE
OPEN THE ROLL. THE MOTION IS TO
PASS TO APPROPRIATIONS WITH THE
CHAIR VOTING AYE. NØ RECORDED
FOR THE VICE CHAIR, SENATOR
DOLLY. DOLLY. AYE. PADILLA
PADILLA AYE. SKINNER SKINNER.
AYE. 7 TO 0 OUT, 7 TO 0. MOVED
NEXT TO FILE ITEM SEVEN SB 1230
BY SENATOR RUBIO. SECRETARY
PLEASE OPEN THE ROLL. MOTION IS
TO PASS TO THE HEALTH COMMITTEE
WITH THE CHAIR VOTING AYE. VICE
CHAIR VOTING NO. SENATOR
SKINNER. SKINNER I'M 6 TO 1.
THAT BILL IS OUT. 6 TO 1. MOVING
NEXT TO FILE ITEM EIGHT, SB 1261
BY SENATOR ALVARADO GILL.
SECRETARY, PLEASE OPEN THE ROLL.
THE MOTION IS TO PASS TO
APPROPRIATIONS WITH THE CHAIR
VOTING AYE NOVO RECORDED FOR THE
VICE CHAIR. SENATOR DOLLY.
DOLLY. AYE. PADILLA. PADILLA.
AYE SKINNER. SKINNER. I'M 7 TO
0. 7 TO 0. MOVING NEXT TO FILE
ITEM NINE, THIS IS SB 1436 BY
SENATOR ALLEN, SECRETARY, PLEASE
OPEN THE ROLL. MOTION IS TO PASS
THE GOVERNMENTAL ORGANIZATIONS
COMMITTEE WITH THE CHAIR VOTING
AYE AND VICE CHAIR VOTING AYE.
SENATORS. PADILLA. PADILLA, AYE.
SKINNER 620. ALL RIGHT. THAT
BILL IS OUT 6 TO 0. OKAY. FILE
ITEM TEN. WE'RE GOING TO WE'RE
GOING TO NEED A MOTION ON IT.
BUT I'M GOING TO FIRST GO TO,
SENATOR ASHBY FOR A COMMENT
BEFORE WE I ENTERTAIN A MOTION.
THANK THANK YOU. I JUST WANTED
TO SAY THAT THIS ITEM I HAVE
SOME CONCERNS WITH, BUT BECAUSE
IF IT MAKES IT OUT OF THIS
COMMITTEE, IT COMES NEXT TO A
COMMITTEE THAT I CHAIR. I WILL
HAVE PLENTY OF OPPORTUNITY TO
WORK WITH THE AUTHOR THERE. AND
IN DEFERENCE TO HIM, HE IS A
VERY GOOD AUTHOR WHO WORKS HARD
ON HIS BILLS. I AM WILLING TO
VOTE FOR IT TODAY. HOWEVER,
MAKING THE MOTION WAS A BRIDGE
FARTHER THAN I WAS WILLING TO
GO, AND I WANTED TO MAKE THAT
STATEMENT ON THE RECORD SO THAT
HE KNOWS WE HAVE AN OPPORTUNITY
TO TALK ABOUT IT FURTHER. WHEN
IT MOVES TO ITS NEXT COMMITTEE.
GREAT. AND I WILL, AS THE CHAIR,
CONCUR WITH SENATOR ASHBY'S
REMARKS. I KNOW THE AUTHOR WANTS
TO CONTINUE TO WORK ON THIS AND
HIS INTENTIONS ARE GOOD. I'LL
SUPPORT THE BILL TODAY KNOWING
THAT HE'S GOING TO CONTINUE TO
WORK ON IT. YES YEAH, WE IT DOES
NEED A MOTION. AND I SEE SENATOR
DOLLY'S HAND UP. I SEE IT ACROSS
THE ROOM. SO SENATOR DOLLY HAS
MOVED. THIS IS A DO PASS TO
BUSINESS PROFESSIONS AND
ECONOMIC DEVELOPMENT. SECRETARY,
PLEASE OPEN THE ROLL. SENATOR.
GLASER. GLASER. AYE, DOLLY.
DOLLY. AYE. ASHBY. ASHBY. AYE
BRADFORD. BRADFORD. AYE. DODD
DODD. AYE. PADILLA. PADILLA. AYE
SKINNER. SKINNER. AYE. 7 TO 0.
THAT BILL IS OUT. 7 TO 0. AND WE
DID 14. ALL RIGHT. THAT SEEMS TO
COMPLETE ALL OF OUR BUSINESS
HERE TODAY LADIES AND GENTLEMEN.
WITH THAT THANK YOU FOR YOUR
PARTICIPATION. AND THIS THIS
SESSION IS ADJOURNED. OKAY.