GOOD GOOD MORNING
AND WELCOME TO TODAY'S HEARING
OF THE ASSEMBLY COMMITTEE AND
REVENUE. TAXATION. UM. OR
NEITHER. AS A REMINDER, WE ARE
NO LONGER USING A MODERATED
TELEPHONE SERVICE. WE ARE,
HOWEVER, ACCEPTING WRITTEN
TESTIMONY THROUGH THE POSITION
LETTER PORTAL ON THE COMMITTEE'S
WEBSITE. WE HAVE ONE BILL UNDER
AGENDA FOR TODAY'S HEARING. SB
851. WE WILL TAKE NO MORE THAN
TWO PRIMARY WITNESSES AND
SUPPORT AND TO PRIME WITNESSES
IN OPPOSITION. OR WITH CONCERN.
THESE WITNESSES WILL HAVE TWO
MINUTES EAST EACH TO PROVIDE THE
TESTIMONY. ALSO ALL OTHER
WITNESSES SHOULD STATE THE NAME
THE ORGANIZATION AND THE
POSITION ON THE BILL. ONLY SINCE
WE DON'T HAVE A CORN. WE'LL JUST
STARTED THE SUBCOMMITTEE MISS.
UM SENATOR, WOULD YOU LIKE TO
START? THANK YOU, MADAM CHAIR
AND MEMBERS APPRECIATE THE
OPPORTUNITY TO PRESENT SB 8 51
LAST SUMMER, THE LEGISLATURE
PASSED MAYBE 1 50, WHICH ENACTED
THE PT AND PTT CREDIT. PTT IS AN
ENTIRE ENTITY. EXCUSE ME. ENTITY
LEVEL TAX THAT IS A DEDUCTIBLE
BY PASS THROUGH ENTITY AND NOT
SUBJECT TO THE FEDERAL $10,000
LIMIT ON STATE AND LOCAL TAX
DEDUCTIONS. THE SALT CAP. IT WAS
INTENDED PROVIDE OWNERS OF A
PASS THROUGH ENTITIES SUCH AS A
PARTNERSHIP OF FEDERAL TAX
SAVINGS, WITH NO CORRESPONDING
COST TO THE STATE AFTER
ENACTMENT OF A B 1 50 TAX
PROFESSIONALS RAISED CONCERNS
THAT THE LAWS ENACTED COULD HAVE
THE UNINTENDED EFFORT OF
PREVENTING TAXPAYERS FROM
UTILIZING OTHER STATE TAX
CREDITS ALLOWED BY CALIFORNIA TO
OFFSET TAXES PAID TO OTHER
STATES. SB 1 13 ATTACKS TRAILER
BILL PASSED IN FEBRUARY
CONTAINED LANGUAGE TO ADDRESS
THIS PROBLEM, BUT THE F T B
SUBSEQUENTLY A PINE AND THE
ADDITIONAL STATUTORY CHANGE WAS
REQUIRED. SB 851 CONTAINS THAT
TECHNICAL. FISK'S, WHICH WAS
DEVELOPED IN CLOSE CONSULTATION
WITH F T. B AS YOU KNOW, THERE'S
A LETTER FROM THE CONTROLLER IN
SUPPORT OF THIS MEASURE, AND I
LIKE TO SAY, UM, IF YOU FIND
$100 ON THE STREET AND YOU TURN
IT IN, YOU DIDN'T LOSE $100. YOU
MADE YOUR MOTHER PROUD BECAUSE
YOU TURNED IN SOMEONE ELSE'S
MONEY. AND SO THAT'S THE SPIRIT
OF THIS BILL WITH ME. I HAVE
JOHN ROSS ON BEHALF OF THE
ACCOUNTING FIRMS AND JASON FOX
WITH THE CALIFORNIA CPAS AND
RESPECTFULLY ASK FOR AND I VOTE
AND WOULD LET MY WITNESSES TAKE
IT FROM HERE. THANK YOU, UM
PRIMARY WITNESSES. PLEASE GO
AHEAD AND SPEAK. GOOD MORNING,
JOHN ROSS ON BEHALF OF THE
NATIONAL ACCOUNTING FIRMS PWC,
DELOITTE, KPMG AND GRANT
THORNTON AS THE SENATOR
EXPLAINED. SB 8 51. CORRECTS A
DRAFTING ERROR AND SB. 113 WHICH
WAS ONE OF THE BUDGET TRAILER
BILLS PASSED IN FEBRUARY. WE'VE
WORKED CLOSELY WITH THE F T B
LEGISLATIVE STAFF ON THE
LANGUAGE. I'M NOT AWARE OF ANY
CONCERN OR CONTROVERSY AROUND
THE LANGUAGE OF THE BILL. I CAN
SPEND SOME TIME TALKING FOREVER
ABOUT WHY THIS PROBLEM EXISTS
AND HOW IT HAPPENED, BUT IT'S 9
30 IN THE MORNING, SO I'LL HOLD
THAT IN CASE THERE ARE QUESTIONS
I WILL NOTE ON THE FISCAL
ANALYSIS ON THE BILL. WE TEND TO
AGREE TO DISAGREE WITH THE
ANALYSIS AND I AGREE WITH THE
CONTROLLER AND SENATOR
PORTANTINO, UH, THE P T E T TAX
CREDIT PROVIDES A BENEFITON
FEDERAL TAXES, WHICH IS AT THE
EXPENSE OF THE FEDERAL
GOVERNMENT. TO THE EXTENT THERE
WAS ANY REVENUE GENERATED BY 1
13. WE THINK THAT WAS AND
INTENDED IN THIS BILL BY
CORRECTING IT JUST SORT OF PUTS
THINGS BACK TO A NEUTRAL
POSITION. WHERE IS THE
CONTROLLER SAID IF THE CHANGES
TO STATUTE CONTAINED AND SB 8 51
HAD BEEN FORTHCOMING, AND SP 1
13 AS ORIGINALLY INTENDED, AS WE
WON 13 WHAT ESSENTIALLY HAVE
BEEN REVENUE NEUTRAL, AND WE
THINK THAT'S THE BEST ANALYSIS
OF THIS BILL. THANK YOU. JASON
FOX WITH THE CALIFORNIA SOCIETY
OF CERTIFIED PUBLIC ACCOUNTANTS
REPRESENTING 42,000. CPS FROM
YOUR SOLO PRACTITIONERS, ALL UP
TO LARGE NATIONAL FIRMS. UM SO
THE PASTOR ENTITY TAX FRAMEWORK
OFFERS A VALUABLE OPPORTUNITY TO
PROVIDE MEANINGFUL SYSTEMS IN
CALIFORNIA TAXPAYERS
DISPROPORTIONATELY AFFECTED BY
THE CURRENT FEDERAL LIMITS ON
INDIVIDUAL STATE AND LOCAL TAX
DEDUCTIONS. AND SINCE ITS
ADOPTION R C P A MEMBER HAS BEEN
WORKING WITH OUR CLIENTS TO
MODEL OUT THE P T. E UH AND HOW
IT WOULD WORK FOR THEM AS AN
OPTION, AND AS YOU STAND UP IN A
COMPLEX NEW TAX FRAMEWORK FROM
81 50, THERE'S THINGS THAT NEED
TO BE ADJUSTED AND REEVALUATED.
SB 1 13 ATTEMPTED ACCOMPLISH
THAT ONE OF THOSE FIXES AS
NOTED. NEED A LITTLE BIT MORE
WORK AND SO SB 8 51 ALLIANCE
WITH THESE EFFORTS AND TAKES AN
IMPORTANT STEP IN ENSURING AN
EFFECTIVE AD ADMINISTRATOR
ADMINISTRATIVE PTE FRAMEWORK TO
OFFER THE MOST BENEFIT AFFORDED
TO THE POOL OF TAXPAYERS. THAT
IS ELIGIBLE. THANK YOU. THANK
YOU. WE DON'T HAVE A CORM YET.
LIKE. THANK YOU. ARE THERE ANY
ADDITIONAL WITNESSES WISHING TO
SPEAK IN SUPPORT? GOOD MORNING,
MADAM CHAIR CHRIS MCFEELY ON
BEHALF OF D. C K W, A TAX
CONSULTING FIRM. ALSO IN SUPPORT
OF THE BILL. THANK YOU. THANK
YOU. ARE THERE ANY WITNESSES
WISHES TO SPEAK IN OPPOSITION?
QUESTIONS OR COMMENTS FROM THE
COMMITTEE MEMBERS. THE COURT. SO
I'LL BE VOTING. I AND I AGREE
WITH YOUR ANALYSIS. WHAT? IN
EFFECT, THE EARLIER BILL DID WAS
PREVENT PEOPLE FROM TAKING THE
ORDINARY TAX BREAK. FOR PAYING
OUT OF STATE TAXES. I'VE TAKEN
THAT AT TIMES, PARTICULARLY WHEN
I LIVED IN NEW JERSEY AND WORKED
IN NEW YORK. SO I THINK THAT
THAT SO CALLED FOUND MONEY UM,
IT'S BEST THAT THAT GO BACK TO
THE TAXPAYERS. THANK YOU. BEFORE
I ASKED THE SENATE TO CLOSE I'M
GOING TO ESTABLISH A CORM. MADAM
CLERK. PLEASE CALL THE ROLL
IRWIN WHEN? HERE. REYES GRAYSON.
LEVIN. MAZE. MULLEN
PETRIE-NORRIS. WORK. RIVAS.
SEYARTO TOÀN MOVE THE BILL.
THERE'S A MOTION SECOND SENATOR
. WOULD YOU LIKE TO CLOSE?
RESPECTFULLY ASK FOR MY VOTE.
PLEASE CALL. IRWIN, WHEN I WHEN
I GRAY GRAYSON GRACE AND I.
LEVINE LEVINE. LIVING NOTHING.
MAY'S MEANS I MULLEN
PETRIE-NORRIS PETRIE-NORRIS. AYE
QUIRK QUIRK. I REVIS SEYARTO
TOÀN. THEY ARE D¯úI. SARAH BILL
PASSED 60 0 ARE WE CAN ONLY GO
UP IN, UM WERE ADD ONS. YEAH
MAYBE FOR A FEW MINUTES. YES.
OH, HERE'S GREG. WE'LL LEAVE THE
CAN YOU PLEASE OPEN THE ROLE FOR
ABSENT MEMBERS? REYES? AYE.
WE'LL LEAVE THEIR ROLE OPEN FOR
ABOUT FIVE MORE MINUTES. MEMBERS
OF YOU HEAR THIS OR YOUR STAFF.
PLEASE COME ON DOWN TO REVEREND
TAX. THANK YOU. DEAN MULLEN.
CAN WE OPEN? WE'LL OPEN THE ROLL
CALL. THE MOTION. HARD PASS. UM
LEVINE LEVINE? AYE. SUCH A SMALL
AND LEAVE IT.
NO WORRIES. MADAM CLERK, PLEASE,
UM, OPEN THE WORLD. FOR MISS
REVIS 8 51 IS PAST ITS A DO PASS
RIVAS ASIDE. YOU CAN ADJOURN.
WE WILL NOW ADJOURN. THE REVENUE
AND TAX COMMITTEE. THANK YOU.