An act relating to taxation. An act to amend Sections 739.1, 2827.1, and 2851 of, and to repeal Section 739.9 of, the Public Utilities Code, and to amend Sections 17072, 17131.4, 17131.5, 17215.1, and 17215.4 of, and to add and repeal Section 17217 of, the Revenue and Taxation Code, relating to taxation.
AB 781, titled the “Stop Taxing Us Act of 2025,” combines two main policy areas: electricity rate design and personal income tax treatment of health savings accounts (HSAs). On the utility side, the bill would repeal existing Public Utilities Code provisions that authorize the California Public Utilities Commission (CPUC) to adopt or expand fixed residential electricity charges and to require income-graduated fixed charges for default residential rates. It also keeps and amends the CARE low-income assistance program, including enrollment improvements, eligibility coordination with other public assistance programs, inclusion of certain group living facilities and Homekey housing, and rules allowing utilities to require energy assessments or proof of income for very high-usage participants.
On the tax side, AB 781 would temporarily conform California law to federal HSA rules for taxable years beginning on or after January 1, 2026, and before January 1, 2031. During that period, it would allow an above-the-line deduction for HSA contributions and related federal-style treatment for rollovers from Archer MSAs, health flexible spending arrangements, and health reimbursement arrangements, while also adding state reporting requirements to the Franchise Tax Board. The bill would suspend several existing state provisions that currently do not conform to federal HSA rules, then restore them after 2031 unless further legislation is enacted.
The bill would also make a broad policy statement expressing legislative intent to enact later legislation eliminating, reducing, and restricting taxes and fees. In practical terms, its legal impact would be to change how residential electricity charges may be structured under CPUC authority, preserve and modify low-income rate assistance rules, and expand state tax conformity for HSAs for a five-year window. It would affect residential utility customers, CARE participants, electrical corporations, gas corporations, the CPUC, the Franchise Tax Board, and taxpayers eligible to contribute to HSAs.
The overall sentiment reflected in the available record is limited because there are no committee transcripts or recorded votes in the provided materials. The bill was still in the Assembly Revenue and Taxation Committee process and was filed with the Chief Clerk under Joint Rule 56, which suggests it did not advance through the normal committee path at that stage. Based on the bill’s framing, it appears designed to appeal to taxpayers and utility customers concerned about fees and electricity bills, while also preserving protections for low-income ratepayers.
The main points of potential contention are likely to be the repeal of CPUC authority over fixed residential charges and the bill’s treatment of low-income utility programs. Supporters may view the repeal as a consumer-relief measure, while opponents may argue it limits utility rate design flexibility and could shift costs elsewhere. The HSA provisions are less controversial on their face, but they still raise fiscal and administrative questions about conformity, reporting, and the temporary nature of the tax changes. No specific named opponents or supporters are identified in the available record.
AB 781 would amend the Public Utilities Code to repeal existing provisions authorizing fixed residential electricity charges and income-graduated fixed charges, while preserving and revising CARE low-income assistance rules. It would also amend the Revenue and Taxation Code to temporarily conform California law to federal HSA rules for 2026 through 2030, including deductions, rollovers, and reporting requirements, and would suspend nonconforming HSA provisions during that period. The bill would affect the CPUC, utilities, low-income ratepayers, HSA holders, and the Franchise Tax Board.
The available record shows no committee testimony and no votes, so there is no documented public debate in the materials provided. The bill’s title and structure suggest a generally anti-fee, tax-reduction posture, with consumer-facing provisions aimed at lowering electricity bills and expanding HSA tax benefits. At the same time, the bill preserves low-income utility assistance, indicating an attempt to pair ratepayer relief with protections for vulnerable customers.
The most likely area of contention is the bill’s repeal of CPUC authority to impose or expand fixed residential charges, which could be seen as constraining utility rate design and potentially affecting cost recovery. Another possible point of debate is the bill’s CARE program language, especially the provisions allowing income verification and mandatory energy assessments for very high-usage participants, which may raise privacy, administrative, and fairness concerns. The HSA tax conformity provisions are likely less contentious, but they still involve temporary state revenue effects and administrative reporting changes.