Revenue and Taxation Committee advances transit funding, energy and veterans tax measures; several bills referred to suspense

The Assembly Committee on Revenue and Taxation on the floor advanced a slate of tax and revenue bills after public testimony and referred several items to the committee’s suspense file for later consideration.

Committee members voted to move several measures to the Appropriations Committee and held or made others two-year bills. Major items included SB 63, an authorizing bill that would allow Bay Area counties to place a 10- to 15-year local sales tax measure on the November 2026 ballot to shore up BART, Caltrain, Muni and AC Transit; SB 86, to reauthorize and expand the state’s sales-and-use tax exclusion program for clean-energy and advanced manufacturing projects; SB 711, an omnibus conformity bill updating California’s tax code to federal law as of Jan. 1, 2025; SB 328, which would cap certain Department of Toxic Substances Control monitoring fees charged to housing developers; SB 302, aligning state tax treatment with federal Inflation Reduction Act transferability rules for clean-energy tax credits; and two bills proposing expanded property-tax exemptions for disabled veterans (SB 56 and SB 296).

Why it matters: Committee members and dozens of witnesses told the panel the measures affect housing, public transit, jobs, clean-energy investment and veterans’ housing stability. Several bills carry fiscal impacts that the committee signaled need further review before final approval. The committee followed its rules on fiscal-impact bills by referring several items to the suspense file for additional consideration.

What the committee did and why

SB 63 (Wiener) — regional transit funding

SB 63 would authorize Bay Area counties to place a 10- to 15-year local sales tax measure on the November 2026 ballot to create a regional funding source for major transit agencies that the bill and witnesses said face persistent operating shortfalls. Robert Rayburn, a member of the BART Board of Directors, told the committee, “BART is working to reduce costs and closed a $35,000,000 deficit for fiscal year 26. However, we cannot cut our way out of this crisis, and we will face a $350,000,000 plus deficit starting in fiscal year 27.” Sue Nowak, mayor of Pleasant Hill and chair of the Metropolitan Transportation Commission, said the measure does not itself impose a tax but “simply gives the Bay Area permission to ask its voters whether they wanna invest in their own future.”

Opposition: Peter Block of the California Taxpayers Association urged caution about language that could permit taxes to be imposed by voter initiative, saying it “could circumvent Proposition 13 and Prop 218’s requirement for two-thirds approval for taxes.”

Committee action: The committee moved SB 63 out of the committee with a recorded outcome of yes 4, no 2; the measure was referred to Appropriations (motion: pass to Appropriations).

SB 56 and SB 296 — disabled-veterans property-tax exemptions

Two related measures addressed property-tax treatment for disabled veterans. SB 56 would amend statutory income calculations so that service-connected disability compensation is not counted as household income when determining eligibility for a low-income disabled-veterans property tax exemption. A presenter told the committee that counting disability compensation creates a “catch-22” where veterans who qualify for disability pay lose eligibility for exemptions because the compensation is treated as income.

Edward Skelton, Merced County Veterans Service Officer, told the committee, “Excluding service connected disability compensation from household income calculations will ensure that these Veterans can access the tax relief that they need to remain in their homes and communities.” Testimony came from veterans service organizations and county service officers in support; no primary opposition witnesses appeared.

SB 56: the committee referred the bill to the suspense file for later consideration; members indicated it would be held in committee pending fiscal review. SB 296, a separate bill presented by Senator Archuleta proposing a full property-tax exemption for 100% disabled veterans and the surviving spouse of a qualifying deceased veteran, was made a two-year bill.

SB 86 (McN—presenter) — sales-and-use tax exclusion for clean-energy and advanced manufacturing

SB 86 would reauthorize the state’s sales-and-use tax exclusion program administered by the alternative energy financing authority and expand eligible industries to include advanced technologies (the sponsor repeatedly called the authority “KATF/KAFTA/KAFTA/ST/E” in testimony). The bill as presented would reauthorize the program to Jan. 1, 2031, and increase the program cap; witnesses from industry and the program stressed the program’s role in luring manufacturing projects to California.

Christina Saron, described in testimony as the program’s executive director, said the program has generated hundreds of projects and billions in investment and urged renewal. Andy Foster of Aemetis described company investments supported by the program and said the tax exclusion made large renewable-fuel and renewable-natural-gas projects feasible.

Committee action: The committee passed SB 86 as amended and moved the bill to Appropriations (motion: do pass as amended to Appropriations). The committee’s adopted amendment reduced the aggregate cap from the sponsor’s request to $100,000,000 annually; recorded vote on the motion was yes 7, no 0.

SB 711 (McN—presenter) — updating California’s federal-conformity date to Jan. 1, 2025

SB 711 would move California’s specified conformity date forward so that state income and franchise tax law more closely aligns with federal tax law as of Jan. 1, 2025. Witness Gina Rodriguez described the practical burden of the current practice and urged that updating the specified date simplify filing and audits for taxpayers and administrators.

Committee action: The committee passed SB 711 to Appropriations (motion: do pass to Appropriations); recorded outcome reported 4 yes, 1 no in the committee roll call recorded at the hearing. Supporters included tax professional groups; no primary opposition appeared during the hearing.

SB 328 (Grayson) — DTSC fee caps and timelines for residential infill projects

SB 328 would cap the Department of Toxic Substances Control’s generator/handling fees for certain residential infill and master-development projects ($100,000 per project per year for qualifying infill projects; $250,000 per project per year for master-developed projects in the sponsor’s presentation) and would impose timelines on DTSC review steps to reduce project delays.

Luis Marante of the Bay Area Council described projects whose monitoring fees rose from $100,000 to $800,000 after a 2022 fee change and warned uncapped fees “will push housing away from our urban areas and cause less soil remediation to occur.” Ali Saferman of the Housing Action Coalition recounted UC Law, San Francisco (formerly UC Hastings) paying roughly $240,000 in total fees, penalties and interest under the new structure when an unexpected billing change took effect.

Committee action: The committee passed SB 328 to Appropriations (motion: do pass to Appropriations); the recorded vote was yes 7, no 0.

SB 302 (Padilla) — state tax treatment for monetized IRA clean-energy tax credits

SB 302 would adjust California’s tax law so that transferred or sold federal clean-energy tax credits created by the Inflation Reduction Act are not treated in a way that defeats their intended financing value for projects. Hal Dittmer, CEO of Wellhead, said the federal credit is a critical piece of project finance and that nonconformity would make projects more expensive and raise costs for ratepayers.

Committee action: The committee passed SB 302 as amended to Appropriations; recorded outcome yes 7, no 0. The committee adopted a five-year sunset and set the bill to take effect Jan. 1, 2026 under the amendment described on the floor.

Votes at a glance (committee-level outcome)

- SB 86: Do pass as amended to Appropriations (7–0). Chair’s amendment reduced annual aggregate cap to $100,000,000. - SB 302: Do pass as amended to Appropriations (7–0). Chair’s amendment set a Jan. 1, 2026 effective date and a five-year sunset. - SB 328: Do pass to Appropriations (7–0). - SB 711: Do pass to Appropriations (recorded committee roll-call: 4–1 yes/no as announced on the floor). - SB 63: Passed the committee vote and was referred to Appropriations; committee floor announcement recorded the measure as passing 4–2. - SB 56: Held in committee and referred to the suspense file for later consideration. - SB 296: Made a two-year bill (will not advance this session).

Discussion and next steps

Several bills that carry fiscal impacts were placed on the committee’s suspense file for additional review before final passage. The committee chair noted the current state budget situation and said the committee must prioritize measures aligned with stated public-policy goals and fiscal constraints. Bills that the committee moved to Appropriations will receive additional hearings focused on budget and fiscal language before they can reach the Assembly floor.

Speakers from the hearing urged the committee to consider local impacts (transit access, housing development and remediation costs), program oversight and accountability for large funds, and the practical financing effects of tax conformity for clean-energy projects.

Ending note: The committee concluded its session after completing the suspense-file motions and roll calls; members said they would reconvene later in the legislative calendar as required by committee rules.