Senate Revenue and Taxation Committee
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Senate Revenue and Taxation Committee California State Senate
Follow its sittingsSpeaker 4
Scott Coppenhauer, Jarvis Taxpayer Association in support. Thank you. Speaking to you.
Speaker 1
Thank you. Are there any other witnesses in favor of the bill, in support of the bill? Any witnesses opposed to the bill? With that, I'll ask committee members if anyone has comments or
Speaker 1
have a comment, and then we will move the bill. Senator, this bill grants basic fairness to California taxpayers who have lost a parent or a grandparent who then have to endure the probate process to obtain ownership of their property. And you have accepted the committee amendments?
Speaker 1
Next we have SB three forty seven, Senator Choi. Mr. Senator Choi, would you present your bill?
Speaker 6
Good morning, committee members, chair chairperson, and I wanna wish you a happy New Year, one of the first meetings. Thank you for giving me this opportunity to present to you Senate Bill three forty seven, which is my state annual tax reduction bill. I wanna start off by stating that I will be accepting the committee's amendment recommendations. As amended, SB two thousand three and forty seven will reduce the state annual tax from $800 to $600 for every LLC, LLP, Limited Partnerships, S corporations, or C corporations. Currently, under state law, California imposes an annual tax of $800 to all business partnerships regardless of gross profits.
Even if they lose the money in operating, still they have to pay minimum of $800. Originally, I wanted to reduce it from $800 to $80 to encourage many entrepreneurs could begin without such a burden and encourage them. But since we have a budget deficit problem in the state, I compromised to reduce a moderate level of $200 from $800 to $600. Currently, under state law, California imposes an annual tax of 800 doll dollars to all all of them regardless of their profit status. Paying such a high annual rate creates a financial burden for family owned and small businesses who can be affected by this tax.
Although, legislation in the past provided some relief with the first year exemption from this tax, that law no longer in effect. Small businesses with the slim profit margins are up, forced to pay the $800 with little to no exceptions. California's tax structure disproportionately affects smaller partnerships and harming our state's economy as we continue to compete with the other states to attract new businesses. This bill will help California businesses by reducing this tax to a more affordable amount of $600 making our state more competitive and business friendly. I would appreciate your support.
Speaker 1
Are there any witnesses in the audience that wish to come up in support of the bill? Seeing none, are there any witnesses opposed to the bill? Seeing none, I'll ask the committee members if anyone has, comments or questions.
Speaker 1
Motion has been made to move the bill, and I want to thank you, senator, for your work on this. This measure does strive to strike a balance between reducing business costs and ensuring the burden of paying for public services is spread fairly. Finding that balance can be challenging, so thank you for working with the committee to achieve that goal. I'm pleased to support your bill. Senator, would you like to close?
Speaker 6
Thank you so much, chairperson. And your support of Westby three forty seven will help so many startup companies and then also existing ones who are struggling to make it. I appreciate your support.
Speaker 1
Thank you. Thank you. Well, the bill has been moved. Will secretary call the roll?
Speaker 2
Excuse me. Motion is due pass as amended to the committee on appropriations. Senators McNerney.
Speaker 2
McNerney. Aye. Valadares. Aye. Valadares.
Aye. Ashby. Aye. Ashby. Grayson.
Grayson. Aye. Umberg.
Speaker 1
Joy? I'm gonna skip this. Okay. Next, we have bill s b six twenty three. Senator Archuleta, would you like to support your present your bill?
Speaker 8
And I'd like to thank you all for giving me the the time to present SCA four. I am here to present senate constitutional amendment four, which seeks to provide property tax relief for veterans and their families. SCA four removes a provision in the California constitution that prevents veterans claiming the homeowners exemption from also claiming the disabled veterans or veterans exemption, thereby allowing eligible veterans to stack the exemptions. If approved by the voters, this measure would allow a veteran who qualifies for the veteran's homeowners exemption or the disabled veteran's exemption to also receive the homeowner's exemption. Under current law, in order to qualify for the veteran's exemption, the veteran may not own property, real or personal, worth more an average of 5,000 if the claimant is single or 10,000.
Wow. We gotta bring this up to date, don't we? SCA four modernizes the veterans exemption to by removing those arbitrary limitations a veteran must meet in order to qualify for the exemption. In California, we're all proud of our veterans. We support them.
No doubt. We have always recognized the sacrifices that they make in our country, and and bills like SCA four and senate bill six twenty three show we are committed to providing them with the support they need to succeed in California. With me today to testify in support of the bill is Seb Reeb, a veteran, who is also here today representing veterans and organizations across California. For these reasons, I respectfully ask for your I vote.
Speaker 4
Good afternoon or good morning, chair and members. My name is Seth Reeve with Reeve Government Relations, representing American Legion, Department of California, AMVET's Department of California, the California State Commanders Veterans Council, Military Officers Association of America, California Council of Chapters, and the Vietnam Veterans of America, California State Council. It has been over fifty years since this statute was updated, and it's time to correct an unfair discrepancy. Right now, veterans are forced to choose the homeowner's exemption to get a higher benefit. This means they effectively lose the recognition of their veteran exemption.
By combining these exemptions, we restore fairness. But this is about more than just a tax break. It's about stopping an exodus. In 2017, we had nearly 2,000,000 veterans. Today, that number is closer to 1,500,000 veterans.
We're losing the very people who bring stability, federal dollars, and leadership to our communities. We urge you to stop the bleeding. Help us retain these vital members of our community, and we respectfully request an I vote. Thank you.
Speaker 1
Any other witnesses in support? Seeing none, are there any witnesses that wish to speak in opposition? Seeing none, I'm gonna ask members of the committee if then anyone has comments or questions. Senator, you're recognized.
Speaker 5
Thank you, Mr. Chair. I just want to thank the author for bringing this forward again. You know, we recently worked on another bill that would exempt 100% disabled veterans from property taxes as well. And this just goes to show how committed you are to our veteran community and having served as well.
We thank you for that service. And again, this is yet another simple thing that we can do for veterans, but I also think that the people of California are going to agree that we should do for veterans. I want to thank you for that. Happy to support this bill and ask a motion to move it when appropriate.
Speaker 1
Thank you. Any other members of the committee? Seeing none. Senator, you have been a tremendous advocate in California for our veterans. To hear that veterans are leaving the state is not acceptable, and anything we can do to stop that and to give veterans the the support they deserve.
A lot of veterans, have have needs that the state should be providing, and so I'm willing to support this, bill, and I offer my support. And, with that, the bill do I hear a motion?
Speaker 8
Well, I I'm honored to, present this in front of such a distinguished, committee, which includes our veterans, Tom Humberg and and yourself, mister chair, serves on our military and veterans committee. So all of you know. And, of course, senator, your support, well received, believe me. And I know all the veterans that are listening and watching also agree. And this is a first step.
You're absolutely right. And I think by keeping the veterans in California, giving that that time that they need to readjust, come back in, and stay and be part of our California way of life, I think this is the first step, and I appreciate what you've done and said today. So with that, I ask and I vote.
Speaker 1
The author is closed, and the bill is moved. Will the secretary call the roll?
Speaker 2
Motion is to adopt, but first we refer to the committee on elections and constitutional amendments. Senators McNerney?
Speaker 8
Thank you, mister chair. And again, members, senate bill six twenty three is a companion bill, the SCA four, which was just presented, and thank you for approving the bill. Senate bill six twenty three makes conforming statutory changes to implement senate constitutional amendment four to allow a veteran who qualifies for the veteran's exemption or disabled veteran's exemption to also receive the homeowner's exemption. I respectfully ask your high vote.
Speaker 4
Seth Reeb with Reeb, government relations. American Legion representing the American Legion Department of California Ambets, California State Command and Infection Council, Military Officers of America, and Vietnam Veterans, all in support. Thank you. Thank you.
Speaker 9
Mister chair, Jeff Neal representing the county of San Diego, also in support.
Speaker 1
Any other witnesses in support? Seeing none, are there any witnesses in opposition? Seeing none, I will ask members of the committee if anyone has questions or comments. Seeing none, my comments will be very brief. This is the second presentation of yours, in a in a career of of serving veterans, and that's much appreciated by the committee and by the state of California.
Thank you for that presentation. I'm happy to support the bill. Senator, would you like to close?
Speaker 8
And I, again, would like to thank the committee, each and every one of you as I look you in the eye. I know you love our veterans and I know you'll stand up for them and I really, really appreciate it. And, what more can I say but thank you? The gratitude is there among the veterans in the state of California and I respectfully ask for your I vote.
Speaker 2
The motion is due passed to the Committee on Military and Veterans Affairs. Senator senators McNerney?
Speaker 2
McNerney? Aye. Valadares? Aye. Valadares?
Aye. Ashby? Aye. Ashby? Aye.
Grayson? Aye. Grayson? Aye. Umberg?
Aye. Umberg? Aye. 50. Again,
Speaker 9
Well, good morning, Mr. Chair, members of the Committee on Revenue and Taxation. It's my pleasure to present Senate Bill seven sixty two, which is a district specific bill addressing the unique revenue needs of the city of Hercules, which is in my Senate district. Hercules was founded in 1900 as a company town, later evolving into a residential suburb. Over the years, the city has struggled to generate sufficient revenue to meet the needs of its community due to its status as a low to no property tax jurisdiction, unlike many other jurisdictions in my district.
This lack of funding jeopardizes continuing services such as policing services, youth and elderly support services, and park and infrastructure improvements. Under SB seven sixty two, the City Of Hercules will be authorized to place on the ballot a sales tax increase of up to 1% that intends to ensure services and infrastructure maintenance continue. And I want to emphasize once again, this is increasing the cap to give the voters the choice to consider a sales tax increase. It's not imposing that increase. It's giving the voters the opportunity.
Here to testify in support of the bill, on behalf of City of Hercules, is Carby Shelby with Townsend Public Affairs.
Speaker 7
All right. Good morning, Chair McNerney, members of the committee. My name is Carolyn Shelby. I'm here on behalf of the City of Hercules in strong support of Senate Bill seven sixty two. Senate Bill seven sixty two provides a narrowly tailored and constitutionally sound solution to a challenge facing cities across California, the growing gap between the cost of delivering essential public services and the limited revenue tools available to local governments.
While cities are responsible for public safety, emergency response, infrastructure, parks, and community services, we operate within one of the most constrained local revenue systems in the nation. As the senator noted, Senate Bill seven sixty two does not impose a tax increase. It simply allows the city of Hercules to ask their voters for approval of a local transactions and use tax that may exceed the current statutory rate cap. Any measure would still be subject to full constitutional voter approval requirements. The authority granted under this bill preserves transparency, accountability, and local control.
The decision remains entirely in the hands of the city's residents. State imposed rate caps, while appropriate as a general policy, can function as a binding constraint that prevents communities like Hercules from even placing a locally supported self help measure on the ballot. If approved by voters, revenue generated under this authority would be used to protect and maintain essential city services, including public safety, emergency response, parks and facilities, economic development, and youth and senior programs that directly support the community's quality of life. On behalf of the city of Circules, of Hercules, we respectfully urge your support for this measure. Thank you.
Speaker 1
I thank the witness for your brief presentation. Any of the witnesses in support? Seeing none, are there any witnesses in opposition? Seeing none, I will ask the members of the committee for comments or questions. Seeing none, I wanna thank you, senator, for your testimony.
This measure allows the voters of the city of Hercules to decide whether they want to tax themselves to sustain city services. The legislature has granted other jurisdictions this sort of authority many times, and I'm pleased to support your bill. Senator, would you like to close?
Speaker 1
Very good. The bill has been moved. No, it hasn't. The bill now has been moved. Secretary, would you call the roll?
Speaker 2
McNerney, aye. Valadares? No. Valadares, no. Ashby?
Aye. Ashby, aye. Grayson? Aye. Grayson, aye.
Umberg? Aye. Umberg, aye. Four one?
Speaker 1
Four to one, the bill is out. Now, will we consider the calendar? Mhmm. I'll leave you that. Yeah.
Do I
Speaker 1
We will now take up the consent calendar, which is item number three SB five seventy five by Senator Laird. The author has accepted technical amendments from the committee. Would anyone like to remove this item from the consent calendar? Seeing no objection, we do have a motion. Do we have a motion on the consent calendar?
Right. Senator Grayson has moved bills. Will you, will the secretary call the roll?
Speaker 2
McNerney, aye. Valadares? Aye. Valadares, aye. Ashby?
Aye. Ashby, aye. Grayson? Aye. Grayson, aye.
Umberg? Aye. Umberg, aye. Five zero.
Speaker 1
Consent calendar is adopted. Have to lift the call on item number one. We will now lift the call on item number one with secretary Calero. Been.
Speaker 2
Is file item number one, s b 288 by senator Sarto. Motion is due, pass as amended to the committee on appropriations. Senator Ashby. Aye. Five zero.
Speaker 1
The vote is five zero. The bill is out. And this concludes the business of the committee, which is now, closed.
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