GOOD AFTERNOON, AND WELCOME TO
THIS HEARING OF THE ASSEMBLY
COMMITTEE ON REVENUE AND
TAXATION. AS ALWAYS, PLEASE MAKE
SURE TO SUBMIT A POSITION.
LETTERS AT LEAST ONE YEAR. ONE
WEEK PRIOR TO THAT ONE YEAR
WOULD BE REALLY THINKING WAY IN
ADVANCE. SO ONE WEEK, I'LL GIVE
YOU ONE WEEK PRIOR TO THE
COMMITTEE HEARING IN ORDER FOR
THEM TO BE REFLECTED IN THE BILL
ANALYSIS. ADDITIONALLY, PURSUANT
TO OUR COMMITTEE RULES BILLS
WITH A FISCAL IMPACT OF PLUS OR
-150,000 WILL BE REFERRED TO OUR
SUSPENSE FILE, WHICH WILL BE
TAKEN UP AT A LATER MEETING, WE
DO NOT HAVE A QUORUM, AND SO WE
WILL BE STARTING AS A
SUBCOMMITTEE, AND WE WILL BE
STARTING WITH FILE ITEM ONE, AB
1868 BY ASSEMBLY MEMBER FRIEDMAN
SAID. MEMBER, WHENEVER YOU'RE
READY. THANK YOU, MADAM CHAIR,
AND MEMBERS, I WANT TO THANK THE
COMMITTEE AND THE COMMITTEE
STAFF FOR THEIR WORK ON THE BILL
. I ACCEPT THE COMMITTEE
AMENDMENT ON PAGE FIVE OF THE
ANALYSIS. STATE LAW PROVIDES A
PROPERTY TAX EXEMPTION FOR
PROPERTY USED EXCLUSIVELY FOR
CHARITABLE PURPOSES. IF IT IS
OWNED BY A NONPROFIT ENTITY.
THIS IS COMMONLY KNOWN AS A
WELFARE EXEMPTION. IN 2015, THE
LEGISLATURE PASSED AB 668 AND
EXPANDED THE PROPERTY TAX
WELFARE EXEMPTION TO INCLUDE
ELIGIBLE NONPROFIT CORPORATIONS
THAT BUILD AND REHABILITATE
AFFORDABLE HOUSING UNITS FOR
SALE TO LOW INCOME FAMILIES. BUT
UNLIKE RENTAL PROPERTIES, TAXES
ARE ASSESSED ON THE OWNERSHIP
HOME AND PAID BY THE LOW INCOME
HOME BUYER, INCREASING THEIR
OVERALL HOUSING COST. MOST
ASSESSORS APPLY THE INITIAL
PROPERTY TAX ASSESSMENT
PROPORTIONALLY ON THE FIRST
MORTGAGE PAID BY THAT LOW INCOME
FAMILY THAT PARTICIPATES IN LOW
TO NO INTEREST MORTGAGE PROGRAMS
. HOWEVER, SOME ASSESSORS
CONTINUE TO ASSESS DEED
RESTRICTED HOMES AT FAIR MARKET
VALUE, ESPECIALLY IN VERY
EXPENSIVE PARTS OF THE STATE
WHERE THE AVERAGE HOME PRICE AND
FAIR MARKET VALUE EXCEEDS
$800,000. AB 1868 ADDRESSES THIS
WIDE VARIANCE BETWEEN
JURISDICTIONS ABOUT ASSESSING
THE VALUE OF AFFORDABLE HOMES,
SO SOLD TO AND OCCUPIED BY LOW
INCOME FAMILIES THAT PARTICIPATE
IN LOW TO NO INTEREST MORTGAGE
PROGRAMS. AS AB 1868 CREATES
STATEWIDE UNIFORMITY IN
ASSESSING DEED RESTRICTED
PROPERTIES SOLD TO AND OCCUPIED
BY LOW INCOME FIRST TIME HOME
BUYERS. IT ALSO APPLIES THE
PROPERTY TAX ASSESSMENT
CONSISTENTLY AND MORE
PROPORTIONATELY ON DEED
RESTRICTED PROPERTIES SOLD TO
THESE HOUSEHOLDS. AND OF COURSE,
WE ALL KNOW THAT OWNING A HOME
FOR A LOT OF THESE LOW INCOME
FAMILIES IS A PATH TO BUILDING
EQUITY AND TO HAVING SECURITY.
SO WE WANT TO ENCOURAGE MORE OF
THIS KIND OF HOME BUYING AND
REMOVE BARRIERS TO PREVENT IT.
TESTIFYING IN SUPPORT ON BEHALF
OF OUR SPONSOR IS DEBBIE
ARAKKAL, EXECUTIVE DIRECTOR FOR
HABITAT FOR HUMANITY CALIFORNIA.
SHE CAN EXPLAIN HOW THIS LACK OF
UNIFORMITY IN ASSESSING THE
VALUE OF THEIR HOMES DIRECTLY
AFFECTS THE GOOD WORK OF HABITAT
FOR HUMANITY. WITH THAT, I WOULD
RESPECTFULLY REQUEST AN AYE
VOTE. HI. HI GOOD AFTERNOON,
MADAM CHAIR AND COMMITTEE
MEMBERS, THANK YOU FOR THE
OPPORTUNITY TO SPEAK WITH YOU.
MY NAME IS DEBBIE ORACLE AND I
AM THE EXECUTIVE DIRECTOR WITH
HABITAT FOR HUMANITY CALIFORNIA.
AND I'M HERE REPRESENTING THE
VIEWS OF HABITAT FOR HUMANITY
AFFILIATES, PROVIDING AFFORDABLE
OWNER OCCUPIED HOMES IN 42
COUNTIES ACROSS THE STATE OVER
THE PAST TEN YEARS. HABITAT FOR
HUMANITY AND CALIFORNIA HAS
SERVED OVER 12,000 PEOPLE, 83%
OF WHOM ARE PEOPLE OF COLOR. OUR
HOMEOWNER FAMILIES EARN BETWEEN
30 AND 80% OF THE AREA MEDIAN
INCOME, AND WE PARTNER WITH THEM
TO PROVIDE A HAND UP TO DEED
RESTRICTED AFFORDABLE HOMES TO
OAN. WE'VE HAD SITUATIONS WHEN
PROPERTY TAXES WERE ASSESSED
WITH MINIMAL CONSIDERATION GIVEN
TO AFFORDABILITY AND DEED
RESTRICTION. DEED RESTRICTIONS
RESULTING IN OVER ASSESSED
VALUES WITH MUCH HIGHER PROPERTY
TAXES THAN ESTIMATED. RATHER
THAN PROPORTIONAL TO THE FIRST
MORTGAGE. THIS REQUIRES A
MORTGAGE REDUCTION IN ORDER TO
KEEP THE HOME OWNERS MONTHLY
PAYMENTS AFFORDABLE. THIS
BURDENS HABITAT FOR HUMANITY,
NEGATIVELY IMPACTING OUR BUDGETS
AND LEAVING LESS FUNDING AND THE
ABILITY TO BUILD MORE HOMES.
THIS BILL CODIFIES A BEST
PRACTICE ADMINISTERED BY MANY
COUNTIES AND SUPPORTS THE
ASSESSOR'S COMMITMENT TO
CONSISTENT AND UNIFORM
APPROACHES TO ASSESSING DEED
RESTRICTED PROPERTIES. AS A 500
AND 1C3 NONPROFIT AFFORDABLE
HOME BUILDER AND LENDER, WE'RE
HONORED TO SPONSOR AB 1868 AND
JOIN ASSEMBLY MEMBER LAURA
FRIEDMAN TO ACHIEVE EQUITABLE
PROPERTY TAXATION ON AFFORDABLE,
OWNER OCCUPIED HOMES. I AM
GRATEFUL TO THE CHAIR AND THE
COMMITTEE AND FOR YOUR
CONSIDERATION FOR THIS IMPORTANT
BILL, AND I URGE AN AYE VOTE.
THANK YOU. THANK YOU VERY MUCH.
DO WE HAVE ANY OTHER WITNESSES
IN SUPPORT? THANK YOU. HI,
CATHERINE CHARLES, ON BEHALF OF
HOUSING ACTION COALITION IN
SUPPORT. ANY WITNESSES IN
OPPOSITION? ALL RIGHT, WE HAVE A
QUORUM. SO IF YOU CAN JUST
PLEASE DO THE ROLL CALL. IRWIN
HERE TO HEAR BARNES. GIBSON
HERE. GRAYSON HERE. JIM
PATTERSON HERE. THREE OF US. WE
HAVE A QUORUM. WE DO HAVE A
QUORUM, MISS FRIEDMAN, WOULD YOU
LIKE TO CLOSE? WE WOULD REQUEST
AN AYE VOTE. OH, QUESTIONS FROM
THE COMMITTEE. THANK YOU VERY
MUCH, MADAM CHAIR, I'VE READ THE
BILL AND THE PROPOSAL VERY, VERY
THOROUGHLY. AND I WANT TO SAY
ONE. HOW PROUD I AM THAT WE'RE
AT THIS POINT, I'LL BE
SUPPORTING THE BILL. I WANT TO
MOVE THE BILL. I WAS A BOARD
MEMBER FOR HABITAT FOR HUMANITY,
GREATER LOS ANGELES AND KNOW
INTIMATELY THE WORK THAT THEY DO
AND WHAT THEY TRIED TO DO IN
TERMS OF TRYING TO MAKE SURE
THAT PEOPLE HAVE HOMES, BEING ON
TOP OF ROOFS AND THINGS OF THAT
NATURE, THE ORGANIZATION IS
AMBASSADOR JIMMY CARTER, THIS IS
A GREAT STEP IN THE RIGHT
DIRECTION, I BELIEVE. AND I
WOULD LOVE TO BE CONSIDERED AS A
COAUTHOR OF THE BILL IF THE
AUTHOR WOULD ALLOW ME TO DO SO.
WE WOULD BE VERY HONORED. THANK
YOU. THANK YOU. ASSEMBLY MEMBER
GRAYSON, I CONCUR WITH MY
COLLEAGUE'S COMMENTS AND ALSO, I
WOULD LIKE TO SECOND THE BILL.
AND, IF ALLOWED, BE ABLE TO
COAUTHOR, IT WOULD BE VERY
HONORED. THANK YOU. I DIDN'T
HEAR IT. MR. PATTERSON. I WANT
TO ECHO THE COMMENTS OF THE OF
THE TWO COLLEAGUES HERE, I'LL BE
OBVIOUSLY VOTING IN SUPPORT OF
IT, BUT, I WAS MAYOR OF FRESNO
FOR EIGHT YEARS, BACK IN THE MID
90S, IN THE EARLY 2000. AND
THAT'S WHEN HABITAT FOR HUMANITY
CAME INTO FRESNO AND HAS BEEN A
SIGNIFICANT, PROVIDER OF HOMES.
I HAVE BEEN IN THE LOCATIONS
I'VE STOOD BESIDE, FAMILIES WHO
HAVE THEIR SWEAT EQUITY IN IT.
AND WHEN THEY GET HANDED THE KEY
AND THEY HAVE THAT HOME, IT IS
SOMETHING THAT IS INEXPLICABLY
JOYFUL. SO I'M GOING TO BE GLAD
TO VOTE ON THIS. I'D LOVE TO BE
A COAUTHOR AS WELL. WE WOULD
LOVE TO HAVE YOU. THANK YOU SO
MUCH. ALL RIGHT, MISS FRIEDMAN,
WOULD YOU LIKE TO CLOSE NOW? WE
APPRECIATE THE SUPPORT, THE
SUPPORT FOR FIRST TIME HOME
BUYERS, LOW INCOME HOME BUYERS
AND FOR HABITAT. SO THANK YOU.
YEAH, IT SOUNDS LIKE WE ALL LOVE
HABITAT. YOU YOU DO INCREDIBLE
WORK, SO I HAVE A MOTION BY, MR.
GIBSON, A SECOND BY MR. GRAYSON,
AND THE MOTION IS TO PASS, AS
AMENDED, TO APPROPRIATIONS. MISS
HIGHLAND, PLEASE CALL THE ROLL.
I HAVE A NUMBER ONE AB 1868. THE
MOTION IS TO PASS, AS AMENDED,
TO APPROPRIATIONS. IRWIN. IRWIN.
I TO I TO I BAINES. GIBSON I
GIBSON. I GRAYSON GRAYSON I JIM
PATTERSON JIM PATTERSON I THREE
OF US 5 TO 0 5 TO 0 AND THAT
BILL IS OUT. CONGRATULATIONS.
THANK YOU. THANK YOU SO MUCH.
ALL RIGHT. FILE ITEM TWO IS AB
2191 BY ASSEMBLY MEMBER SANTIAGO
. GOOD AFTERNOON, MR. SANTIAGO.
HOW ARE YOU, MADAM CHAIR, THANKS
FOR GIVING US THE OPPORTUNITY TO
PRESENT, THANK YOU FOR YOUR
WORK. COMMITTEE MEMBERS AND
STAFF, THIS IS A VERY PLAIN,
SIMPLE, BILL, AB 20 2191
BASICALLY WANTS TO CODIFY A
PROGRAM WE CURRENTLY HAVE FUNDED
IN THE STATE BUDGET. AND WHILE
THERE IS, WHILE WE'RE STILL
TRYING TO FIGURE OUT HOW MUCH
WILL BE IN THE STATE BUDGET,
IT'S A VERY IMPORTANT PROGRAM TO
BE ABLE TO FUND THESE PROGRAMS
SO THAT WE COULD DO THE
OUTREACH, THE EDUCATION AND THE
FREE TAX PREPARATION, IS
IMPORTANT BECAUSE A LOT OF THE
PROGRAMS THAT WE HAVE, LIKE THE
CAL, EITC, VIDA, SORRY, CAL
EITC, EARNED INCOME TAX CREDIT
AND OTHER PROGRAMS ARE
INCREDIBLY IMPORTANT TO HAVE,
BUT TO HAVE THE OUTREACH DOLLARS
TO ATTACH TO THEM SO THAT PEOPLE
CAN BENEFIT FROM THEM, I IT
HELPS GET THE PROGRAMS OUT. NOW,
I WILL SAY, YOU KNOW, JUST AS A
POINT OF, PERSONAL POINT OF
VIEW, I USED TO BE SKEPTICAL OF
SOME OF THESE OUTREACH PROGRAMS
BECAUSE I ALWAYS USED TO THINK,
OKAY, YOU TAKE SOME OF THESE
OUTREACH PROGRAM DOLLARS INSTEAD
OF THEM, PUT THEM IN THE
PROGRAMMATIC IN THE PROGRAM
BUCKET SO THAT PEOPLE CAN GET
THESE DOLLARS. BUT I'VE QUICKLY
DISCOVERED IS THAT YOU CAN HAVE
SOME OF THE BEST PROGRAMS OUT
THERE, BUT IF PEOPLE DON'T KNOW
ABOUT THEM, IF THE OUTREACH
ISN'T THERE AND IF YOU CAN'T
ENROLL PEOPLE IN THOSE PROGRAMS,
THEN DON'T BENEFIT THE PROGRAMS
THAT I'M SORRY. THEY DON'T
BENEFIT THE PEOPLE WHO YOU
INTENDED TO BENEFIT, SO I WOULD
RESPECTFULLY ASK FOR AN AYE VOTE
ON THIS BILL. WE HAVE TWO
WITNESSES, BECAUSE THESE
PROGRAMS ARE IMPORTANT, AND WE
NEED TO CONTINUE TO OUTREACH SO
THAT WE GET LIFT PEOPLE OUT OF
POVERTY. THANK YOU. ALL RIGHT.
WITNESSES MAY BEGIN. OKAY, SO,
HELLO, CHAIR ERWIN AND MEMBERS
OF THE COMMITTEE. MY NAME IS
DOCTOR DANTE. EARLY AND I AM
PRESIDENT AND CEO OF UNITED WAY,
CALIFORNIA CAPITOL REGION. AND
WE ARE HERE ON BEHALF OF
CALIFORNIA EARNED INCOME TAX
CREDIT, CAL EITC COALITION. AND
WE PROUDLY SUPPORT AB 2191 BY
ASSEMBLY MEMBER SANTIAGO. FOR
100 YEARS, UNITED WAY,
CALIFORNIA CAPITOL REGION HAS
BROUGHT PEOPLE TOGETHER TO BUILD
STRONGER, HEALTHIER AND MORE
COMPASSIONATE COMMUNITIES. WE
SERVE YOLO, SACRAMENTO, PLACER,
AMADOR, EL DORADO COUNTIES, AND
SINCE 1923, OUR LOCAL UNITED WAY
HAS RAISED MORE THAN $500
MILLION TO FIGHT POVERTY IN THE
REGION AND HELP FAMILIES
SUCCEED. THIS INCLUDES
COORDINATING THE REGION'S
LARGEST FREE TAX PREPARATION
ASSISTANCE PROGRAM IN 2024. SO
FAR, WE HAVE COMPLETED AROUND 14
4700 RETURNS. THE AVERAGE
HOUSEHOLD INCOME FOR FILERS WAS
ONLY AROUND $29,000. SO FOR
THESE FAMILIES, EVERY ADDITIONAL
DOLLAR MAKES A HUGE DIFFERENCE
AS THESE FAMILIES HAVE BEEN ABLE
TO CLAIM OVER $5.7 MILLION IN
REFUNDS, INCLUDING MORE THAN $2
MILLION UTILIZING THE EARNED
INCOME TAX CREDIT. PRIOR TO
THESE FUNDS BEING AVAILABLE,
UECKER HAD LESS RESOURCES TO
PROVIDE DIRECT OUTREACH THAT WAS
ACCESSIBLE TO UNDER-RESOURCED
COMMUNITIES ON A PERSONAL NOTE,
20 YEARS AGO, I WAS A LOW INCOME
STUDENT WITH A YOUNG CHILD, A
THREE YEAR OLD AT UC DAVIS AND
IT WAS TIME FOR ME TO FILE MY
FIRST TAX REFUND OR TAXES AND I
WAS SO EXCITED I WENT TO I WILL
NOT NAME THEM, BUT PAID FOR MY
TAXES TO BE DONE. I PAID 200 OR
SO DOLLARS I DIDN'T KNOW, AND I
CALLED MY MOM AND I WAS SO
EXCITED. MOM, I FILED MY TAXES
AND I DIDN'T HAVE TO PAY
ANYTHING AND I GOT THIS HUGE
REFUND. SHE WAS LIKE, OH MY GOD,
I CANNOT BELIEVE YOU PAID
SOMEONE. YOU MAKE NO MONEY. I
CAN'T BELIEVE YOU PAID SOMEONE
TO DO YOUR TAXES. I WAS LIKE,
WHAT WAS I SUPPOSED TO DO? MY
MOM ACTUALLY WAS AN EMPLOYEE AT
FRANCHISE TAX BOARD AND SHE
SAID, HAVE YOU EVER HEARD OF
THIS PROGRAM, VIDA? I WAS LIKE,
HOW POSSIBLY, MOTHER, WILL I
HAVE HEARD OF THIS PROGRAM? AND
SO THE NEXT YEAR I WENT TO I WAS
AGAIN, I WAS AN AGGIE. I WENT TO
A SENIOR, SENIOR CITIZEN CENTER
IN DAVIS. AND FOR THE VERY FIRST
TIME, I BROUGHT MY WHOLE FOLDER
IN AND I FILED MY TAXES FOR NO
MONEY. AND THEN I GOT THIS HUGE
REFUND BACK, AND THAT THOSE WERE
DOLLARS THAT I RELIED ON FOR
MYSELF, MY SON, TO PAY RENT, TO
PUT FOOD ON THE TABLE. ALL THE
THINGS FULL CIRCLE. I NOW AM
PRESIDENT AND CEO OF UNITED WAY
AND OUR ORGANIZATION FUNDS THAT
SAME ORGANIZATION THAT I FILED
TAXES FOR. AND SO THESE DOLLARS,
I'M NOT JUST OVER HERE READING
COMMENTS. THESE ARE DOLLARS THAT
GOT ME HERE IN FRONT OF YOU
RUNNING THIS ORGANIZATION, IT'S
A REAL THING BEING ABLE TO HAVE
THAT OUTREACH. AND WE ARE NOW,
BECAUSE OF THESE DOLLARS, ABLE
TO DO OUTREACH SO THAT MOMS
EVERYWHERE DON'T HAVE TO TELL
THEIR DAUGHTERS, SAYS, DON'T PAY
TO GET YOUR TAXES DONE WHEN YOU
MAKE NO MONEY. THANK YOU. AND I
ASK FOR YOUR SUPPORT FOR THIS.
THANK YOU. HELLO, MY NAME IS
TERESA SMITH AND I AM THE CEO OF
DREAMS FOR CHANGE, WHO ALSO
PROVIDES IT SERVICES. AND HERE
IN SUPPORT OF 2191 DREAMS FOR
CHANGE, HAS BEEN A LEADER IN
EITC AND EITC SERVICES FOR 13
YEARS IN SAN DIEGO AND FOUR
YEARS IN IMPERIAL COUNTY. THE
EITC GRANT PROGRAM HAS BEEN A
CRITICAL FACTOR IN PROVIDING
TARGET OUTREACH IN OUR
COMMUNITIES, WHO HAVE
TRADITIONALLY HAD A LACK OF
TRUST AND UNDERSTANDING OF THE
TAX SYSTEM, WHILE INCREASING
ACCESS TO THE FREE TAX
PREPARATION SERVICES. THE
INITIAL OUTREACH AND EDUCATION
GRANT ALLOWED US TO DOUBLE OUR
TAX PREPARATION FROM 2300
RETURNS TO 4200 RETURNS, WITH
THE ADDITIONAL GRANT FOR THE TAX
PREPARATION, WE INCREASED OUR
PRODUCTION TO 8100 RETURNS.
PRIOR TO THE PANDEMIC. WITH THE
REMOVAL OF FUNDS IN 2021, ONLY
4400 RETURNS WERE COMPLETED WITH
LAST YEAR AN INCREASE BACK TO
THE 8500 RETURNS AND AN
ADDITIONAL 88 I-10 APPLICATIONS
COMPLETED. AND I'D LIKE TO SHARE
THESE NUMBERS WITH YOU BECAUSE
THEY ARE A TRUE REFLECTION OF
THE IMPACT OF THE CALI EITC
GRANT PROGRAM TO OUR NONPROFITS
ABILITY TO REACH MORE
INDIVIDUALS WHO ARE IN NEED OF
THE TAX, EDUCATION, AND
PREPARATION. OUR MOBILE TAX TEAM
CONDUCTS WORKSHOPS TO HELP
EDUCATE OUR CLIENTS ON TAX RATES
AND CREDITS, ALONG WITH
COMPLETING THEIR TAX RETURNS.
MARY AND JOHN AND THEIR KIDS
WERE EXPERIENCING HOMELESSNESS.
OUR TEAM LEARNED THAT THEY HAD
NOT FILED THEIR TAXES FOR THE
PAST THREE YEARS. BOTH PARENTS
WERE WORKING GIG JOBS RELATED
AND FEARED FILING THE RETURNS
DUE TO OWING SELF-EMPLOYMENT TAX
AND ALSO DIDN'T HAVE THE $200 TO
FILE THOSE TAX RETURNS. OUR TEAM
WORKED WITH THEM TO GATHER ALL
THE NECESSARY INFORMATION AND
COMPLETED THE RETURNS THAT
RESULTED IN OVER $17,000 IN TAX
CREDITS AND RECOVERED STIMULUS
PAYMENTS, WHICH PROVIDED THEM
THE RESOURCES NEEDED TO MOVE
BACK INTO HOUSING. OUR ANNUAL
SURVEYS RESULTS OF OUR TAX
CLIENTS REVEAL THAT 80% OF THE
TAXPAYERS UTILIZE THEIR REFUNDS
TO PAY RENT AND OTHER BASIC
HOUSEHOLD BILLS. THIS PROGRAM
AND GRANT FUNDS ARE A VITAL
LIFELINE TO OUR COMMUNITY. WE
WANT TO MAKE SURE CLIENTS LIKE
MARY AND JOHN HAVE ACCESS TO
THESE SERVICES AND RESOURCES
EACH YEAR WITH THE RIGHT
OUTREACH AND EDUCATION, MARY AND
JOHN MIGHT NOT HAVE HAD BEEN
ABLE TO PREVENT THEIR
EXPERIENCING HOMELESSNESS IF
THEY WERE ABLE TO ACCESS THOSE
TAX CREDITS. FOR THESE REASONS,
AND ON BEHALF OF TAXPAYERS LIKE
MARY AND JOHN, I STRONGLY URGE
YOU TO VOTE YES ON THIS. THANK
YOU. THANK YOU VERY MUCH, DO WE
HAVE ANY OTHER SPEAKERS IN
SUPPORT? GOOD AFTERNOON. ANNA
HASSELBLAD WITH UNITED WAYS OF
CALIFORNIA AND A CO-LEAD OF THE
EITC COALITION IN STRONG SUPPORT
. GOOD AFTERNOON, CATHY VAN
AUSTIN. ON BEHALF OF JOHN
BURTON, ADVOCATES FOR YOUTH IN
SUPPORT. GOOD AFTERNOON, AMY
EVERETT, PRESIDENT OF GOLDEN
STATE OPPORTUNITY AND CO-LEAD OF
THE CALI IJC COALITION, IN
STRONG SUPPORT. THANK YOU. GOOD
AFTERNOON. SAVANNAH JORGENSEN,
ON BEHALF OF THE LUTHERAN OFFICE
OF PUBLIC POLICY, CALIFORNIA, A
MEMBER OF THE CALI EITC
COALITION AND STRONG SUPPORT. HI
THERE, SAM WILKINSON, ON BEHALF
OF GRACE AND END CHILD POVERTY
IN CALIFORNIA AS WELL AS
ECONOMIC SECURITY CALIFORNIA AND
THE CALI EITC COALITION IN
SUPPORT. THANK YOU. REBECCA
GONZALEZ WITH THE WESTERN CENTER
ON LAW AND POVERTY, ALSO A
MEMBER OF THE COALITION IN
SUPPORT. DO WE HAVE ANY
WITNESSES IN OPPOSITION?
QUESTIONS FROM THE COMMITTEE,
QUESTIONS OR COMMENTS? OF COURSE
. ALL RIGHT. I LOVE YOUR STORY.
HOW IT ALL COMES AROUND. AND
OBVIOUSLY VITA IS A REALLY, YOU
KNOW, VERY SUCCESSFUL PROGRAM.
AND WE NEED TO CONTINUE TO MAKE
SURE THAT IT IS AS EFFECTIVE AS
POSSIBLE. AND WE'RE BIG FANS OF
EITC. WE KNOW THAT IT LIFTS,
LIFTS WORKING PEOPLE OUT OF
POVERTY. IT REALLY IMPACTFUL
PROGRAM. BUT WE HAVE BEEN
STRUGGLING FOR THE LAST FEW
YEARS TO TRY TO GET ENOUGH
PEOPLE TO APPLY WHEN THEY ARE
ELIGIBLE. SO THIS IS CRITICALLY
IMPORTANT. SO A LOT OF US ARE
EXCITED BY THE ROLLOUT OF DIRECT
FILE WITH IRS. HOW WILL THAT
CHANGE THE, KIND OF THE WORKFLOW
. SO AT, UNITED WAY? WELL, I
MEAN, AGAIN, I THINK WHAT WE ARE
HOPING IS TO ACTUALLY GET THE
WORD OUT. AND SO ONE OF THE
THINGS WE'RE ADVOCATING FOR HERE
IS EVEN HAVING THAT, MAKING SURE
THAT PEOPLE KNOW THAT THEY, THEY
CAN FILE SHOULD FILE THAT IT
WON'T BE USED AGAINST THEM. SO I
THINK THERE'S A LOT OF EDUCATION
AND OUTREACH ASSOCIATED WITH
THAT AS WELL. YEAH WILL IT MAKE
ANY DIFFERENCE IN YOUR. SO WHEN
I THINK ABOUT THE DIRECT FILE,
ONE OF THE BARRIERS THAT WE RUN
INTO IS OUR CLIENTS STILL HAVE
THAT HESITATION AND FEAR OF THE
SYSTEM, AND SO THE EDUCATION
CONTINUES TO BE IMPORTANT NOT
ONLY TO BE, NOT SCARED OF THE
SYSTEM AND THE TAX SYSTEM, TO BE
ABLE TO GET TO THE POINT WHERE
THEY CAN FILE ON THEIR OWN,
FORTUNATELY, I FEEL A LOT OF OUR
HARD TO REACH POPULATIONS,
ESPECIALLY THOSE WHO ARE LOOKING
FOR I-10'S, OR OTHER CITIES
STATIONS ARE STILL THAT FEAR IS
REAL. OF THE TAX SYSTEM, AND
THAT'S WHAT WE HEAR OVER AND
OVER AGAIN OF THEY'RE SCARED.
AND SO EVEN WITH THE DIRECT
FILE, THEY'RE SCARED THEY'RE
GOING TO SCREW IT UP, AND REALLY
WANT THAT GUIDANCE TO MAKE SURE
THAT THEY GET IT RIGHT AND GET
ALL WHAT THEY QUALIFY FOR. ALL
RIGHT, MR. SANTIAGO, WOULD YOU
LIKE TO CLOSE, RESPECTFULLY ASK
FOR AN AYE VOTE. AND THANK YOU
ALL RIGHT. DO I HAVE A MOTION
AND A SECOND? SO I HAVE A MOTION
BY ASSEMBLY MEMBER GETS GIBSON A
SECOND BY ASSEMBLY MEMBER
GRAYSON. AND THE MOTION IS DUE
PASSED TO APPROPRIATIONS. MISS
HIGHLAND, PLEASE CALL THE ROLL
ON ITEM NUMBER TWO, AB 2191, THE
MOTION IS DUE. PASS TO
APPROPRIATIONS. IRWIN IRWIN I TO
NOT VOTING TO NOT VOTING.
BAINES. BAINES I GIBSON. I
GIBSON I GRAYSON. GRAYSON I JIM
PATTERSON. JIM PATTERSON I THREE
OF US 23550. ALL RIGHT THAT BILL
IS OUT FIVE ZERO. THANK YOU VERY
MUCH. THANK YOU. THANK YOU TO
NEXT UP WE HAVE FILE ITEM THREE
AB 2312. ASSEMBLY MEMBER WALLACE
, BEGIN WHENEVER YOU ARE READY.
THANK YOU, MADAM CHAIR. GOOD
AFTERNOON, MADAM CHAIR AND
COMMITTEE. I HAVE BEFORE YOU
TODAY ASSEMBLY BILL 2312. AS WE
KNOW, AFFORDABILITY IS A TOP
PRIORITY FOR MANY OF US HERE AND
FOR RESIDENTS IN CALIFORNIA.
MANY CALIFORNIANS STRUGGLE TO
MAKE ENDS MEET DUE TO HIGH
LIVING COSTS, AND STUDENT LOAN
DEBT IS OFTEN A SIGNIFICANT
FINANCIAL BURDEN FACING THE HIGH
COST OF HOUSING, ENERGY AND
LIVING IN THE STATE LEAVES MANY
CALIFORNIA COLLEGE GRADUATES
STRUGGLING TO GET BY OR EVEN
CONSIDERING LEAVING THE STATE
FOR NEIGHBORING STATES WITH
LOWER COSTS OF LIVING, WHICH
NEGATIVELY IMPACTS CALIFORNIA'S
WORKFORCE AND ECONOMY. AB 2312
WILL ADDRESS THESE ISSUES BY
REMOVING THE CURRENT CAP ON THE
ABOVE THE LINE DEDUCTION AND
ALLOWING COLLEGE STUDENTS AND
GRADUATES TO DEDUCT THE FULL
AMOUNT OF INTEREST ON THEIR
STUDENT LOANS FROM THEIR TAXES.
THE BILL WILL HELP CALIFORNIANS
NAVIGATE THE CHALLENGES POSED BY
THE AFFORDABILITY CRISIS AND
ALLEVIATE THE FINANCIAL BURDEN
OF OBTAINING HIGHER EDUCATION.
I'D LIKE TO SAY THANK YOU TO THE
COMMITTEE STAFF FOR THEIR
ANALYSIS, AND I LOOK FORWARD TO
CONTINUING OUR WORK ON THIS BILL
TOGETHER FOR ANY OTHER POTENTIAL
ISSUES THAT ARISE WHILE THE BILL
IS ON SUSPENSE. VERY GOOD. DO
YOU HAVE A PRIMARY WITNESS? I DO
NOT. ALL RIGHT. ANY OTHER
WITNESSES IN SUPPORT? WITNESSES
IN OPPOSITION. THÀNH. BRANDON AB
CALIFORNIA TAX REFORM
ASSOCIATION IN OPPOSITION. ALL
RIGHT. QUESTIONS OR COMMENTS
FROM THE COMMITTEE. ASSEMBLY
MEMBER GIBSON. SO RIGHT, I, I
WANT TO ASK THE AUTHOR, I WAS
READING IT, BUT CAN YOU DESCRIBE
FOR ME WHAT KIND OF SAFE WOULD
QUALIFY FOR. THAT'S AN EXCELLENT
. OH, I'M SORRY. THAT'S THE NEXT
BILL. MY APOLOGIES. I'LL HOLD
OFF UNTIL THAT TIME COMES. OKAY.
ALL RIGHT. SO, YOU GIVEN THAT,
DEDUCTIONS TEND TO BE MORE, MORE
VALUABLE FOR WEALTHIER
TAXPAYERS, AND THAT THIS BILL
BRINGS US OUT OF CONFORMITY WITH
THE FEDERAL TAX CODE. SHOULD WE
FOCUS OUR EFFORTS ON, LESS
ADVANTAGED STUDENTS OR IS THIS A
PROBLEM FOR EVERYBODY? I THINK
THAT'S A FAIR QUESTION. WE SEE
IT AS A PROBLEM FOR EVERYBODY.
WHEN YOU LOOK AT OUR WORKFORCE
CHALLENGES IN CALIFORNIA, WE
WANT TO MAKE SURE THAT WE'RE NOT
PICKING WINNERS AND LOSERS AND
CAN APPLY IT ACROSS THE BOARD SO
THAT WE CAN MAKE CALIFORNIA MORE
AFFORDABLE FOR EVERYONE. ALL
RIGHT, MR. WALLACE, WOULD YOU
LIKE TO CLOSE? JUST RESPECTFULLY
ASK FOR AN AYE VOTE WHEN THE
TIME IS APPROPRIATE? ALL RIGHT.
AND WITHOUT OBJECTION, THIS BILL
WILL BE REFERRED TO OUR SUSPENSE
FILE. AND FOR FILE ITEM FOUR.
MR. GIBSON, YOU'LL GET READY
WITH YOUR QUESTION. IT'S AB
2861, YEAH. THANK YOU. THE
SECOND BILL I HAVE BEFORE YOU
TODAY IS ASSEMBLY BILL 2861. GUN
SAFETY IS A PRESSING ISSUE IN
CALIFORNIA. EACH YEAR, OVER 3000
PEOPLE IN CALIFORNIA DIE FROM
GUN RELATED INCIDENTS, INCLUDING
SUICIDE, HOMICIDE AND ACCIDENTAL
SHOOTINGS. AB 2861 WILL PROMOTE
RESPONSIBLE FIREARM SAFETY AND
STORAGE BY PROVIDING A TAX
CREDIT OF UP TO $300 FOR
TAXPAYERS WHO PURCHASE A GUN
SAFE. THE PROPER STORAGE OF A
FIREARM IN A LOCKED SAFE
PREVENTS UNAUTHORIZED ACCESS TO
A FIREARM AND ENHANCES COMMUNITY
SAFETY, ESPECIALLY IN HOUSEHOLDS
WITH CHILDREN OR INDIVIDUALS WHO
ARE UNFAMILIAR WITH GUN SAFETY.
THE BILL PROMOTES FIREARM SAFETY
AND ENCOURAGES RESPONSIBLE GUN
OWNERSHIP. I'D LIKE TO SAY THANK
YOU TO THE COMMITTEE STAFF FOR
THEIR ANALYSIS, AND I LOOK
FORWARD TO CONTINUING OUR WORK
ON THIS BILL TOGETHER FOR ANY
OTHER POTENTIAL ISSUES THAT
ARISE WHILE THE BILL IS ON
SUSPENSE. ALL RIGHT. VERY GOOD.
DO YOU HAVE ANY PRIMARY
WITNESSES? DO NOT, WITNESSES IN
SUPPORT. MADAM MEMBERS, MY NAME
IS ELIZABETH ROSEMAY, AND THIS
IS ALEXIS, SO I AGREE WITH YOU
ABOUT HOW IMPORTANT IT IS FOR
PEOPLE TO STORE THEIR GUNS IN A
SAFE, PROTECTED WAY, I ALSO
THINK THAT, THERE ARE SOME BILLS
ON THE TABLE RIGHT NOW THAT
POTENTIALLY COULD MAKE IT,
CONSIDERABLY MORE EXPENSIVE FOR
GUN OWNERS TO EXERCISE THEIR
SECOND AMENDMENT RIGHTS. AND I
THINK THIS BILL IN PARTICULAR IS
AN IMPORTANT AND SYMBOLIC
GESTURE FROM THE LEGISLATURE, IN
REGARDS TO JUST KIND OF SHOWING
SOME COOPERATION AND A
WILLINGNESS TO WORK WITH
RESPONSIBLE, LAW ABIDING GUN
OWNERS. SO I WOULD JUST ASK YOU
TO SUPPORT THIS BILL. THANK YOU
VERY MUCH. DO WE HAVE, WITNESSES
IN OPPOSITION? HI. KATIE
HARDIMAN WITH THE CALIFORNIA
TEACHERS ASSOCIATION,
UNFORTUNATELY IN OPPOSITION DUE
TO THE IMPACT ON THE GENERAL
FUND AND PROPERTY. THANKS. THANK
YOU. BRANDON NH█P CTRA, IN
OPPOSITION. ALL RIGHT, QUESTIONS
OR COMMENTS FROM THE COMMITTEE.
MR. GIBSON, THANK YOU VERY MUCH.
JUST FOR THE AUTHOR, IS THERE A
PARTICULAR SAFE THAT WOULD BE
QUALIFIED TO RECEIVE THE TAX
CREDIT IF A PERSON PURCHASED IT?
YOU KNOW, I'M HAPPY TO GET BACK
TO YOU ON SPECIFICS OF THAT. WE
DIDN'T HAVE ANYTHING IN MIND.
THE IDEA WAS, HOW CAN WE HELP
INCENTIVIZE RESPONSIBLE GUN
OWNERSHIP HERE IN CALIFORNIA?
AND SO I'M HAPPY TO GET BACK TO
YOUR OFFICE WITH MORE DETAILS ON
THAT. GREAT, BECAUSE I THINK
IT'S A GOOD BILL. AND I
APPRECIATE YOUR WILLINGNESS TO
BE IN THIS SPACE, IT'S A TOUGH
SPACE TO BE IN, BUT IT'S A RIGHT
SPACE TO BE IN FOR ONE, AND TWO,
I WAS JUST LOOKING AT ANY
BECAUSE THERE'S A WHOLE BUNCH OF
DIFFERENT KINDS OF SAFES OUT
THERE, RIGHT. AND IF IT WAS
GERMANE OR VERY SPECIFIC TO A
SAFE THAT ABSOLUTELY WAS MADE
FOR NOT JUST BECAUSE, YOU KNOW,
PEOPLE HAVE SAFES FOR DEEDS OF
TRUST, WILLS AND THINGS OF THAT
NATURE. RIGHT? SO I JUST WANT TO
JUST MAKE SURE THAT AS FOR A
SPECIFIC MODEL, MAKE FOR SUCH
STORAGE OF GUNS. SO IF YOU CAN
GET BACK WITH ME ON THAT, I'D
APPRECIATE IT. I THINK IT'S A
GOOD IDEA. ABSOLUTELY THANK YOU.
ALL RIGHT, ANY OTHER QUESTIONS
OR COMMENTS? MR. WALLACE, WOULD
YOU LIKE TO CLOSE? I JUST
RESPECTFULLY REQUEST AN AYE VOTE
WHEN THE TIME IS APPROPRIATE.
ALL RIGHT. THANK YOU VERY MUCH.
ASSEMBLY MEMBER WALLACE. AND
WITHOUT OBJECTION, THIS BILL
WILL BE REFERRED TO OUR SUSPENSE
FILE. THANK YOU. THE NEXT ITEM
UP IS FILE ITEM FIVE AB 2524 BY
ASSEMBLY MEMBER. WARD ASSEMBLY
MEMBER. WHENEVER YOU ARE READY.
SIR. I GOT YOU. THANK YOU, MADAM
CHAIR AND MEMBERS. ASSEMBLY BILL
2524 IS BEFORE YOU AND AIMS TO
ALIGN STATE LAW WITH FEDERAL LAW
TO PROVIDE ADDITIONAL
FLEXIBILITY TO FAMILIES WHO WISH
TO START INVESTING TOWARDS THEIR
OWN OR THEIR CHILDREN'S FUTURE.
CALIFORNIA'S SCHOLARSHARE 529
ACCOUNTS ARE A VERSATILE SAVINGS
VEHICLE FOR FAMILIES WITH
NONTRADITIONAL POST-SECONDARY
EDUCATIONAL NEEDS. CURRENTLY,
FAMILIES WHO INVEST IN A 529
COLLEGE SAVINGS ACCOUNT CAN ONLY
ROLL OVER FUNDS INTO A ROTH IRA
UNDER SPECIFIC CONDITIONS. THE
529 ACCOUNT MUST HAVE BEEN OPEN
FOR 15 YEARS. CONTRIBUTIONS MUST
HAVE BEEN IN THE ACCOUNT FOR
MORE THAN FIVE YEARS, WITH THE
LIMIT OF $35,000 PER DESIGNATED
BENEFICIARY PERMITTED TO BE
ROLLED OVER. ONE OF THE PRIMARY
REASONS FAMILIES HESITATE,
DECLINE OR DELAY INVESTING IN
THESE ACCOUNTS IS THE FEAR THAT
THEIR CHILD MAY NOT ULTIMATELY
GO TO COLLEGE BY CONFORMING
STATE LAW WITH FEDERAL LAW, AB
2524 WILL PROVIDE INDIVIDUALS
AND FAMILIES WITH ADDITIONAL
FLEXIBILITY AND THE OPTION TO
AVOID TAXATION AND PENALTIES FOR
NONQUALIFIED WITHDRAWALS. THIS
BILL WILL RESULT IN HIGHER
CONFIDENCE IN INVESTING INTO A
529 ACCOUNT AND RESULT IN
INCREASED CONTRIBUTIONS AND
SAVINGS TO EXISTING AND NEW
ACCOUNTS WITH ME TO PROVIDE
TESTIMONY TODAY. I HAVE
WITNESSES JULIO MARTINEZ, JULIO
MARTINEZ WITH THE CALIFORNIA
STATE TREASURER'S OFFICE. I
RESPECTFULLY REQUEST YOUR AYE
VOTE. GOOD AFTERNOON, MADAM
CHAIR, AND MEMBERS. MY NAME IS
JULIO MARTINEZ, AND I'M THE
EXECUTIVE DIRECTOR OF THE
SCHOLARSHARE INVESTMENT BOARD,
WHICH OVERSEES THE STATE'S 529
COLLEGE SAVINGS PLAN. THANK YOU,
THANK YOU FOR ALLOWING ME TO BE
HERE THIS AFTERNOON. I'M
TESTIFYING ON BEHALF OF STATE
TREASURER FIONA MÀ, WHO IS WHO
SERVES AS CHAIR OF THE
SCHOLARSHARE INVESTMENT BOARD
AND IS PROUDLY SPONSORING
ASSEMBLY BILL 24, 2524 BY
ASSEMBLY MEMBER WARD BY
CONFORMING STATE LAW WITH
FEDERAL LAW TO ALLOW FOR THE
ROLLOVER OF UNUSED FUND BALANCES
FROM A 529 PLAN TO A ROTH IRA
RETIREMENT ACCOUNT, WE COULD
REMOVE ONE OF THE BIGGEST
PSYCHOLOGICAL BARRIERS THAT
PREVENT FAMILIES FROM OPENING
529 PLAN ACCOUNTS AND SAVING
MORE FOR FUTURE HIGHER EDUCATION
COSTS. WE SPEAK TO COUNTLESS
FAMILIES YEAR AFTER YEAR, AND
ONE OF THE MOST COMMON CONCERNS
WE HEAR IS ABOUT WHAT IF MY
CHILD DECIDES NOT TO PURSUE A
HIGHER EDUCATION? THÀNH THE MERE
THOUGHT OF HAVING TO PAY TAXES
AND PENALTIES FOR TAKING
NON-QUALIFIED WITHDRAWALS CAUSES
PARENTS LIKE THE ASSEMBLYMAN
SAID, TO DELAY UNDERFUND OR
COMPLETELY AVOID PLANNING
FINANCIALLY, AND SAVING FOR THIS
VERY IMPORTANT ENDEAVOR. AND
THIS IS PROBLEMATIC FOR A NUMBER
OF REASONS. NUMBER ONE, THE
RESIDENT COST OF A FOUR YEAR
EDUCATION AT A CSU CAN BE AS
MUCH AS $113,000. NOW THAT
AMOUNT GOES UP TO ABOUT $168,000
FOR A èC EDUCATION FOR PRIVATE
INSTITUTIONS, THE AVERAGE IS
CLOSER TO $218,000. SECOND,
BECAUSE FEDERAL AND STATE AID
TYPICALLY DO NOT COVER THE
ENTIRE COST, MANY CALIFORNIA
FAMILIES OFTEN TURN TO STUDENT
LOANS. COLLECTIVELY,
CALIFORNIANS OWE MORE THAN $141
BILLION, WITH EACH CALIFORNIAN
OWING ON AVERAGE $37,000. YET
THE AVERAGE BALANCE FOR FAMILY
SAVING WITH A 529 ACCOUNT IS
ONLY $25,000 ANNUALLY. I MEAN,
NATIONALLY, PARENTS WHO
SACRIFICE BY HAVING A 529
ACCOUNT FOR THE LONG TERME
BENEFIT OF THEIR LOVED ONES
SHOULD NOT BE PUNISHED WITH
TAXES AND PENALTIES IF THE
BENEFICIARY ULTIMATELY DECIDES
TO PURSUE OTHER OPPORTUNITIES OR
INTERESTS, SUCH AS LESS
EXPENSIVE EDUCATIONAL AND
TRAINING OPTIONS, MILITARY
SERVICE, EMPLOYMENT, AND EVEN
ENTREPRENEURSHIP, ALLOWING
FAMILIES TO ROLL OVER THESE
UNUSED MONIES FROM A 5 TO 9 PLAN
TO A ROTH IRA WILL NOT ONLY MAKE
FAMILIES MORE CONFIDENT ABOUT
SAVING WITH A 529 PLAN, BUT IT
WILL GIVE FAMILIES COMFORT IN
KNOWING THAT THEY'VE TAKEN A
POSITIVE STEP IN PROVIDING THEIR
LOVED ONES WITH A BRIGHTER
FUTURE. FINANCIAL FUTURE,
REGARDLESS OF WHAT STEPS THEY
TAKE. AFTER GRADUATING FROM HIGH
SCHOOL. IT IS FOR THESE REASONS
THAT THE STATE TREASURER PROUDLY
SPONSORS AB 2524 AND
RESPECTFULLY REQUEST YOUR
SUPPORT, WITH ME TODAY IS VIVIAN
TSAI, WHO IS OUR REPRESENTATIVE
FOR TIAA-CREF TUITION FINANCE
AND WHO SERVES AS THE FINANCIAL
PLAN MANAGER FOR SCHOLARSHARE
529. AND WE'RE BOTH HERE
AVAILABLE TO ANSWER ANY
QUESTIONS YOU MAY HAVE. THANK
YOU VERY MUCH. THANK YOU. I'M
SORRY YOU SAID JUST FOR
QUESTIONS. YES OH, OKAY.
INTRODUCE YOURSELF. HI. YES, HI.
I'M VIVIAN CHIME WITH TIA ON THE
EDUCATION SAVINGS SIDE OF THE
BUSINESS. ALL WE DO IS MANAGE
529 PLANS ACROSS THE COUNTRY FOR
NINE STATES. MY I ALSO WEAR A
HAT INVOLVED IN THE COLLEGE
SAVINGS FOUNDATION, WHICH IS AN
ORGANIZATION OF STATE SPONSORS
AND STATE PARTICIPANTS IN 529
PLANS. AND AS JULIO MENTIONED,
AND, YOU KNOW, THESE PRODUCTS
HAVE BEEN AROUND FOR ABOUT 20
YEARS. THESE SAVINGS VEHICLES
AND THEY'VE REALLY YOU WOULD
HAVE THOUGHT THAT THE ADOPTION
WOULD HAVE BEEN MORE BECAUSE WE
ALL KNOW THE VALUES OF EDUCATION
IN THIS COUNTRY. BUT WHAT WE'VE
REALLY SEEN IS, IS THIS FEAR
THAT PARENTS HAVE WHEN THEIR
INFANT IS SIX MONTHS OLD. THEY
DON'T KNOW WHAT THE FUTURE IS
GOING TO BRING. SO WE'RE NOT
GOING TO START NOW FOR COLLEGE
BECAUSE WE'RE THINKING ABOUT THE
NEXT DAY. AND WHAT ENDS UP
HAPPENING IS MOST PEOPLE DON'T
OPEN THEIR 529 PLAN ACCOUNTS
UNTIL THEY'RE ABOUT 12 YEARS
OLD, AND BY THEN THEY HAVE MAYBE
SIX YEARS TO SAVE, AS SOMEONE IN
THE INDUSTRY, I PUT MONEY AWAY
IN SMALL AMOUNTS FROM THE DAY MY
KIDS CAME HOME FROM THE HOSPITAL
AND I, STILL HAVING SENT THEM TO
BOTH A UC AND CSU, HAVE HAD NOT
ENOUGH MONEY, I RAN OUT OF MONEY
AND HAD TO TAKE SOME STUDENT
LOANS ON THEIR BEHALF. SO
ANYTHING WE CAN DO TO FOR PEOPLE
TO THINK AND NOT NOT WORRY ABOUT
SAVING, BY THINKING ABOUT, WELL,
IF JUNIOR DOESN'T GO TO COLLEGE,
THIS IS THEIR KICK START ON A
ROTH 529 PLAN. THAT'S SOMETHING
PHENOMENAL WE CAN LEAVE OUR
KIDS. VERY GOOD. THANK YOU. ANY
OTHER, SUPPORTERS IN THE ROOM?
GOOD AFTERNOON, JOANNE
BETANCOURT, ON BEHALF OF SIFMA,
THE SECURITIES INDUSTRY AND
FINANCIAL MARKETS ASSOCIATION,
WE'RE A NATIONAL TRADE
ASSOCIATION OF BROKER DEALERS,
INVESTMENT ADVISORS AND ASSET
MANAGERS IN PROUD SUPPORT OF
THIS BILL. THANK YOU. THANK YOU.
GOOD EVENING, JOHNNY, VUELTA
CALIFORNIA STUDENT AID
COMMISSION IN SUPPORT OF THIS
BILL. THANK YOU. ALL RIGHT.
THANK YOU. ANY WITNESSES IN
OPPOSITION, QUESTIONS OR
COMMENTS FROM THE COMMITTEE, YOU
KNOW, THE GREAT THING ABOUT THIS
IS YOU'RE SOLVING TWO PROBLEMS
AT ONCE. PEOPLE DON'T SAVE
ENOUGH FOR COLLEGE, AND THEY
CERTAINLY DON'T SAVE ENOUGH FOR
A RETIREMENT. SO I, I THINK THIS
IS A GREAT APPROACH. AND, SO, DO
WE HAVE, WELL, WOULD YOU LIKE TO
CLOSE? WELL, THANK YOU, MADAM
CHAIR. I APPRECIATE THOSE
COMMENTS. AGAIN. IT'S ABOUT THE
FLEXIBILITY FOR THE FAMILY NOT
KNOWING WHAT THE FUTURE HOLDS,
TO BE ABLE TO CONFORM TO FEDERAL
POLICY AS WELL. I THINK THAT THE
STATE SHOULD FOLLOW SUIT. AND I
WOULD APPRECIATE AND
RESPECTFULLY REQUEST YOUR. I
VOTE. ALL RIGHT, SO WE'RE
LOOKING FOR A MOTION. OH IT'S.
OH. I'M SORRY. WITHOUT
OBJECTION, THIS WILL BE MOVED TO
OUR SUSPENSE FILE. THANK YOU.
GREAT. THANK YOU, THANK YOU. ALL
RIGHT. YOU'RE TAKING OVER THE
BILL. OH TOO FAST. OTHERWISE,
YOU WON'T GET OUT OF HERE. ALL
RIGHT, SO, THE, FINAL BILL IS
FILE ITEM SIX, AB 2854. OTHER BY
ASSEMBLY MEMBER ERWIN. ALL
RIGHT, GOOD AFTERNOON,
COLLEAGUES. TODAY I AM
PRESENTING AB 2854, WHICH WILL
BRING MUCH NEEDED TRANSPARENCY
TO LOCAL TAX REVENUE. HOW LOCAL
TAX REVENUES ARE ALLOCATED. THE
INSPIRATION FOR THIS BILL CAME
FROM AN INFORMATIONAL HEARING
THAT I ORGANIZED ON THIS TOPIC
LAST FALL, WHEN WE HEARD FROM
THE DIRECTOR OF THE CALIFORNIA
DEPARTMENT OF TAX AND FEE
ADMINISTRATION, NICK MEDEIROS,
THE LÀ, Ó AND SEVERAL CITY
LEADERS. EXISTING LAW AND
SUBSEQUENT DECISIONS BY THE
BOARD OF EQUALIZATION PROVIDE
THAT, FOR THE PURPOSES OF THE
BRADLEY BURNS UNIFORM SALES AND
USE TAX LAW, WHEN A RETAILER HAS
MULTIPLE PLACES OF BUSINESS IN
CALIFORNIA, THE SALES TAX SHOULD
BE ALLOCATED AT THE PLACE OF
PRINCIPAL NEGOTIATIONS. THIS HAS
CREATED OPPORTUNITIES FOR
BUSINESSES TO CONDENSE THEIR
OPERATIONS INTO A SINGLE
LOCATION, SUCH AS A STANDALONE
SALES OFFICE OR A BUYING
COMPANY. BY DOING SO, A BUSINESS
CAN NEGOTIATE WITH VARIOUS
CITIES AND ENTER INTO AN
AGREEMENT WHEREBY THEY AGREE TO
ALLOCATE THE BRADLEY BYRNE SALES
REVENUE TO THAT CITY IN EXCHANGE
FOR A CERTAIN PORTION OF THOSE
DOLLARS BEING REBATED BACK TO
THE COMPANY. THIS PUTS CITIES
AND COUNTIES. THIS PITS CITIES
AND COUNTIES AGAINST ONE ANOTHER
IN A ZERO SUM GAME, WHERE THE
JURISDICTION THAT HAS THE
AGREEMENT WITH THE BUSINESS SEES
AN INCREASE IN OVERALL REVENUE
AT THE EXPENSE OF OTHER
JURISDICTIONS. IN SOME CASES,
THESE AGREEMENTS MAKE SENSE. FOR
EXAMPLE, WE HEARD AT THE
INFORMATIONAL HEARING WHEN THE
CARQUINAS CHANNEL BRIDGE THAT
MAYBE THAT WAS PRONOUNCED
CORRECTLY, WAS BEING
CONSTRUCTED. THERE WAS AN
AGREEMENT TO ALLOCATE SALES TAX
DOLLARS TO THE CITY OF BENICIA
BECAUSE IT WAS SIGNIFICANT
IMPACTS IN THAT COMMUNITY AS THE
STAGING AREA FOR CONSTRUCTION.
IN MANY CASES, HOWEVER, THESE
AGREEMENTS ARE NEGOTIATED TO
MAXIMIZE THE AMOUNT OF TAX
DOLLARS THAT ARE REBATED BACK TO
SOME OF THE LARGEST AND MOST
PROFITABLE COMPANIES IN
CALIFORNIA. THE CITY MANAGER FOR
SIMI VALLEY TESTIFIED AT OUR
HEARING AND EXPLAINED HOW THEIR
COMMUNITY ROADS ARE IN A
CONSTANT STATE OF DISREPAIR DUE
TO A STEADY STREAM OF HEAVY
TRUCKS ENTERING AND EXITING A
CONCRETE BATCH PLANT IN THE
CITY. DESPITE THESE AND OTHER
ENVIRONMENTAL IMPACTS, THE CITY
OF SIMI VALLEY DOESN'T RECEIVE A
SINGLE CENT OF BRADLEY BURNS
REVENUE FROM THE CONCRETE SALES
BECAUSE ALL THE SALES MADE BY
THE CONCRETE MANUFACTURER ARE
BOOKED OUT OF THE SALES OFFICE.
IN A CITY THAT IS MILES AWAY
FROM ANY OF THE BATCH PLANTS,
AND IT'S THEIR ASSOCIATED
IMPACTS. TO BE CLEAR, 2854 DOES
NOT CHANGE A CITY'S ABILITY TO
ENTER INTO ANY OF THESE
AGREEMENTS. IT DOES, HOWEVER,
ADVANCE A KEY POLICY
RECOMMENDATION THAT IS ENDORSED
BY A BROAD CROSS-SECTION OF
CALIFORNIA CITIES AND COUNTIES,
AS WELL AS THE STATE AUDITOR.
THE LEAGUE OF CITIES HAS BEEN
WORKING ON THIS ISSUE FOR YEARS,
AND AB 2854 ADVANCES ONE OF THE
RECOMMENDATIONS THEIR LEADERSHIP
HAS ADOPTED, AS OUTLINED IN THE
ANALYSIS. I WILL BE WORKING WITH
THE CITIES TO ADDRESS THEIR
IMPLEMENTATION CONCERNS WITH ME
TODAY TO PREVENT TECHNICAL
EXPERTISE IS MICHAEL COLEMAN
WHILE HE IS HERE REPRESENTING NO
ONE BUT HIMSELF, I WANT TO
MENTION THAT HE LITERALLY WROTE
THE BOOK ON MUNICIPAL FINANCE
THAT IS RELIED UPON BY NUMEROUS
CITIES ACROSS THE STATE. ALL
RIGHT. THANK YOU SO MUCH. AND
THANK YOU, CHAIR NGUYEN. IT'S
GOOD TO SEE YOU AGAIN, MEMBERS
OF THE COMMITTEE, I'M AN AUTHOR,
AN EDUCATOR AND A CONSULTANT ON
CALIFORNIA LOCAL GOVERNMENT
FINANCES. I WANT TO THANK THE
ASSEMBLY MEMBER FOR TAKING ON
THIS VERY IMPORTANT TOPIC, SALES
AND USE TAX REVENUES ARE SECOND
ONLY TO PROPERTY TAX REVENUES
AND THEIR IMPORTANCE TO CITY AND
COUNTY GENERAL FUNDS AND SOME
CITIES SALES TAX REVENUES ARE
THE TOP SOURCE OF GENERAL
REVENUES. WHILE WE'RE TALKING
HERE ABOUT THE LOCAL 1, BRADLEY
BURNS RATE, WHICH IS ALLOCATED
ACCORDING TO SITUS, THE LOCATION
OF THE TRANSACTION FOR A TAXABLE
EVENT OVER THE COUNTER
TRANSACTION, THE LOCATION IS
OBVIOUS, BUT SOMETIMES THE
SELLER AND BUYER ARE A DIFFERENT
LOCATION. AND WHEN THE WHEN THE
TRANSACTIONS OCCURS, THIS IS
OFTEN CALLED A REMOTE
TRANSACTIONS. WHAT I WOULD CALL
IT NOWADAYS IT'S MOSTLY ON
ONLINE SALES, BUT HISTORICALLY
IT'S ALSO INCLUDED TELEPHONE AND
MAIL ORDER TRANSACTIONS FOR THE
LOCAL BRADLEY BURNS TAX. THE LAW
DEFINES THE SITUS, THE LOCATION
OF THE SALE AS THE TAX OF THE
TAXABLE SALE AS THE SELLER'S
LOCATION, SPECIFICALLY THE
SELLER'S LOCATION THAT'S
INVOLVED IN THE PRINCIPAL
NEGOTIATE OF THE SALE. IN TAX
NERD PARLANCE, WE CALL THIS
ORIGIN BASED SOURCING. THE
REASON FOR THIS GOES BACK TO THE
50S, WHEN THE BRADLEY BURNS LAW
WAS FIRST ADOPTED, LONG BEFORE
COMPUTERS AND OUR DIGITAL
ECONOMY TO EASE THE
ADMINISTRATION OF THE TAX,
ESPECIALLY ON RETAILERS OF
TAXABLE GOODS WHO WERE
RESPONSIBLE FOR COLLECTING AND
REMITTING THE SALES TAXES. THE
LAW ESTABLISHED THE IN-STATE
RETAILERS LOCATION AS THE SITUS
FOR A TRANSACTION WITHOUT A WITH
AN OUT-OF-STATE RETAILER AND A
REMOTE TRANSACTION, THE USE TAX
APPLIES, AND THAT GENERALLY GOES
TO THE LOCATION OF THE PURCHASER
. BUT THE USE TAX IS ANOTHER
STORY. IT'S NOT AN ISSUE TODAY.
ADD ON SALES TAX IS LEGALLY
CALLED TRANSACTIONS AND USE
TAXES. A DIFFERENT SECTION OF
THE STATUTE ARE ALSO ANOTHER
STORY, GENERALLY ALLOCATED TO
THE LOCATION OF THE PRODUCTS
DELIVERY RATHER THAN TO THE
RETAILER'S LOCATION. BECAUSE
THEY'RE ALLOCATED TO THE
LOCATION OF THE PRODUCT'S
RECIPIENT OR USE THESE ADD ON
SALES TAXES ARE TRANSACTIONS AND
USE TAXES AREN'T VULNERABLE TO
THESE TAX REBATES AND ARE ALSO
NOT AT AN ISSUE TODAY. SO THESE
TAX SHARING AGREEMENTS ARE
EXCLUSIVELY AN ISSUE WITH THE 1%
BRADLEY BURNS SALES TAX
TRANSACTIONS, WHERE THE
PURCHASER AND THE RETAILER ARE
LOCATED IN DIFFERENT WITHIN THE
STATE. AND WITH THE GROWTH OF
OUR DIGITAL ECONOMY, THE GROWTH
OF TAXABLE TRANSACTIONS FROM
ONLINE SALES IS FAR OUTPACING
THAT OF OVER-THE-COUNTER SALES,
AND THE PANDEMIC ONLY
ACCELERATED THIS TREND. CITIES
AND COUNTIES WITH SALES OFFICES
AND WAREHOUSES THAT ARE THE
RETAILER'S LOCATION IN THESE
ONLINE TRANSACTIONS ARE SEEING
MASSIVE GROWTH IN THESE REVENUES
AS MORE COMMERCE SHIFTS FROM
OVER-THE-COUNTER TO ONLINE. WITH
THIS HAS COME THESE TAX SHARING
AGREEMENTS, WHERE LARGE AMOUNTS
OF TAX REVENUES ARE REBATED BACK
TO BUSINESSES. WE CAN VIEW THESE
REBATES AS TAX EXPENDITURES, AS
SPENDING OF GOVERNMENT DOLLARS
FOR ECONOMIC INCENTIVES, RATHER
THAN FOR PUBLIC SERVICES. AND
THE PUBLIC POLICY QUESTION THAT
WE MUST ASK IS, ARE, IS THIS THE
BEST USE OF THESE PUBLIC FUNDS?
IS IT NECESSARY FOR OUR LOCAL
AND STATE ECONOMIES? WHAT ARE
THE TRADE OFFS FOR FUNDING LOCAL
PUBLIC SERVICES? THESE ARE
APPROPRIATE QUESTIONS FOR ANY
PUBLIC EXPENDITURE. WE CAN FIND
THE AMOUNT OF EACH LOCAL
GOVERNMENT THAT EACH LOCAL
GOVERNMENT IN CALIFORNIA SPENDS
ON PARK EMPLOYEES, ON LIBRARY
BOOKS, ON FIRE INSPECTIONS, ON
ROAD MAINTENANCE. THAT DATA IS
ALL PUBLISHED IN BUDGETS AND
STANDARD ANNUAL COMPREHENSIVE
FINANCIAL REPORTS AND IN THE
REQUIRED ANNUAL REPORTS TO THE
STATE COMPTROLLER. BUT YOU OR I,
OR ANY CITIZEN WOULD BE HARD
PRESSED TO FIND DATA ON THE
AMOUNTS AND DETAILS OF THESE
TAXES. SALES TAX REBATE
AGREEMENTS THAT TODAY AMOUNT TO
HUNDREDS OF MILLIONS OF DOLLARS.
AB 2584 WOULD STRENGTHEN THE
TRANSPARENCY AROUND THESE
AGREEMENTS AND THE TAX REVENUE
INVOLVED, AND PROVIDE US WITH
THE NECESSARY INFORMATION TO
EVALUATE THE UTILITY OF THESE
EXPENDITURES OF PUBLIC TAX
DOLLARS. THANK YOU SO MUCH. AND
WITH THAT, ARE THERE ANY
WITNESSES IN THE ROOM WISHING TO
SPEAK IN FAVOR? GOOD AFTERNOON,
BEN TREVOR WITH THE LEAGUE OF
CALIFORNIA CITIES. WE HAVE NO
OFFICIAL POSITION ON THIS BILL
YET, BUT WE'VE HAD A NUMBER OF
PRODUCTIVE CONVERSATIONS WITH
THE CHAIR'S OFFICE, AND WE LOOK
FORWARD TO CONTINUING THOSE AS
THE BILL MOVES FORWARD. THANK
YOU, BRANDON KNAPP CTRA GLADLY
IN SUPPORT. GOOD AFTERNOON,
DANIEL PEARL, ON BEHALF OF THE
AMERICAN FEDERATION OF STATE
COUNTY MUNICIPAL EMPLOYEES AND
STRONG SUPPORT, THANK YOU SO
MUCH. ARE THERE ANY OTHER
WITNESSES IN THE ROOM WISHING TO
SPEAK IN OPPOSITION? ALL RIGHT.
ANY QUESTION OR COMMENT FROM
COMMITTEE MEMBERS? GOOD. BEALL.
ALL RIGHT. SO, THANK YOU. DO WE
HAVE A MOTION AND SECOND. OH,
SORRY, MADAM, THIS IS JUST ABOUT
TRANSPARENCY AT THE VERY LOWEST
LEVEL. THANK YOU. OKAY, SO WE
HAVE A WE HAVE A MOTION AND A
SECOND ON THE FLOOR. ROLL CALL.
VOTE, PLEASE. ON ITEM NUMBER
SIX, AB 2854, THE MOTION IS TO
PASS, AS AMENDED, TO
APPROPRIATIONS. ERWIN, I ERWIN I
TO NOT VOTING TO NOT VOTING.
BAINES. BAINES I GIBSON I GIBSON
I GRAYSON. GRAYSON I PATTERSON I
PATTERSON I RIVAS THAT BILL IS
OUT 5 TO 0 THAT BILLS OUT 5 TO
0. ALL RIGHT SHOULD BE WITH OUT.
THANK YOU VERY MUCH. THANK YOU.
MAYOREDLEE, ADD ONS ON AB 1868
WHICH HAS PASSED DO PASS AS
AMENDED TO APPROPRIATION. BANE
BAINES I. SORRY YOU'RE CLEAR.
YES. YOU ARE. GREAT. OKAY.
ALL RIGHT. LET'S, DO ADD ONS.
ADD ONS? THE FIRST ITEM IS ITEM
NUMBER ONE, AB 1868. THE MOTION
IS TO PASS, AS AMENDED, TO
APPROPRIATIONS. THE BILL HAS
PASSED RIVAS RIVAS. I THE NEXT
ITEM IS ITEM NUMBER TWO, AB 21.
EXCUSE ME. 91. THE MOTION IS TO
PASS TO APPROPRIATIONS. THE BILL
HAS PASSED RIVAS RIVAS. I. THE
FINAL FINAL ITEM IS ITEM NUMBER
SIX AB 2854. THE MOTION WAS TO
PASS, AS AMENDED, TO
APPROPRIATIONS. THE BILL HAS
PASSED RIVAS RIVAS I. ALL RIGHT.
THANK YOU VERY MUCH. AND THE
MEETING IS ADJOURNED