Transcript Highlights:

• No, it is not required under federal law. I guess they just...
• administration has placed California in.
• That is, well, every state has a specified federal match.
• Programs that we have that draw down federal funds.
• That was done during the first administration with the current administration, and that was not resolved

Summary: The Senate Budget and Fiscal Review Committee heard AB 109, the Budget Act of 2026, as the main item. Committee leaders described the legislative budget agreement as a balanced two-year plan with about $355.9 billion in total spending, $253 billion from the General Fund, and $36.5 billion in reserves. The Legislative Analyst and Department of Finance said the package assumes about $5.5 billion in higher revenues than the May Revision and uses those resources for a mix of spending changes, including higher Proposition 98 support, additional child care slots, housing and homelessness funding, delayed Medi-Cal reductions, and added support for counties, public hospitals, and distressed hospitals. The administration said the plan resembles the May Revision’s overall structure but includes new spending and revenue assumptions, and members noted that separate revenue trailer bills would be heard later in the week. Much of the committee discussion focused on Medi-Cal, H.R. 1, and the impact on immigrants, low-income workers, counties, and hospitals. Several senators criticized the budget for locking in savings from delayed or reduced Medi-Cal coverage and for not including a mechanism to restore eligibility, while administration and LAO staff said the package delays some reductions but does not automatically reinstate coverage. Finance staff said roughly 1.5 million to 2 million people with unsatisfactory immigration status would move from managed care to fee-for-service, with coverage largely unchanged except for certain services not federally allowed. Members also discussed county administrative funding, indigent care, public hospital support, and the expected rise in uncompensated care. Other topics included In-Home Supportive Services, child care, homelessness funding, Prop. 36, courthouse construction and new judgeships, transit and cap-and-invest/GGRF funding, local journalism, and workforce or reentry programs. Committee members split along party lines in their comments. Democratic members generally supported the agreement as a difficult but responsible compromise that protects core services, preserves reserves, and makes targeted investments in education, housing, health care, and justice system capacity. Republican members argued the budget relies on unrealistic revenue assumptions, does not sufficiently reduce spending, and includes costly policy choices and tax increases. Public testimony largely came from advocates and stakeholders who supported IHSS, Medi-Cal, child care, domestic violence services, hospitals, transit, and other programs, while some business and health plan representatives raised concerns about tax proposals and the shift from managed care to fee-for-service. The chair then moved the committee to public comment and indicated that the revenue bills would return later in the week; no final vote on AB 109 is reflected in the portion provided.

Transcript Highlights:

• The Trump administration is slashing federal funding for HIV prevention, and the U.S.
• What is the federal government and Trump administration doing to—can you say that part again?
• Nonprofits are under attack right now from the federal administration.
• And I just want to lift up again that the expected cuts to Medicaid from the federal administration and
• And so in that regard, I think this is just our mechanism to safeguard ourselves from the federal administration

Committee: House Health

Summary: The committee heard several health-related bills, with most testimony focused on access to care, patient safety, and health system costs. AB 554 (Prepare Act) would expand and clarify protections for HIV prevention medications, including PrEP and injectable PrEP, by limiting prior authorization and step therapy, extending no-cost coverage requirements, and improving reimbursement for small clinics. Supporters said the bill would protect access amid federal threats to HIV prevention, while insurers opposed it as an expensive mandate that could raise premiums and conflict with state affordability targets. The author argued the bill would prevent infections and preserve California’s existing public health protections. AB 577 would limit health plans and PBMs from restricting physicians’ ability to administer or dispense medications directly to patients when medically necessary. Supporters, including physicians and patient advocates, said the bill would improve continuity of care and prevent delays for vulnerable patients; opponents argued it was too broad, could increase drug costs, and could undermine specialty pharmacy networks. The author said amendments narrowed the bill to in-network providers, required patient consent and cost transparency, and exempted hospital outpatient facilities, but the measure still drew opposition over cost concerns. The committee also heard AB 546, which would require coverage of portable HEPA purifiers for vulnerable enrollees during wildfire emergencies, and AB 224, which would codify California’s updated essential health benefits benchmark plan to add infertility treatment, hearing aids, and expanded durable medical equipment coverage if approved by CMS. AB 1032 would require plans to reimburse additional behavioral health visits for wildfire survivors, and AB 849 would require trained chaperones for sensitive ultrasound exams after testimony about sexual abuse in a hospital setting. AB 1196 would update outdated rules requiring three surgeons for certain heart-lung bypass procedures, and AB 1113 would codify a right to wear a mask for health reasons. AB 1386 would add perinatal care as a required hospital service, but the author said the bill would be amended further to address hospital closures and workforce concerns. Several bills drew support from patient advocates, medical groups, and county officials, while insurers and hospital groups often opposed or sought amendments over staffing, cost, and implementation concerns. Some measures were held pending quorum or were scheduled for later action, and no final votes were taken on the bills discussed in the transcript excerpt.

Transcript Highlights:

• Or if we're dealing with federal funds, we will refer to federal authorities, things like that.
• And it, among other things, had some significant changes to the federal administration of the Supplemental
• So historically, administrative costs have been split 50-50, with the federal government picking up half
• If it is above 10%, you have up to a 15%... ...federally funded, but beginning in federal fiscal year
• This was federal HHS data.

Summary: The Senate Finance Committee met to hear interim charges on higher education transparency and on preventing fraud, waste, and abuse in state government. The chair emphasized accountability for taxpayer dollars and asked witnesses to address financial reporting, audit practices, and whether more frequent or comprehensive audits would improve oversight. Legislative Budget Board staff described how public university systems and most community colleges respond to requests about internal audit practices, noting that university systems generally follow a similar annual audit timeline and that community colleges use a more varied mix of internal and external audit arrangements. Members focused on gaps in reporting, especially Texas Southern University’s missing submissions for several years and Collin County Community College’s nonresponse to the LBB survey. The State Auditor’s Office then outlined its higher education audit work, including mandatory statewide single audits, DEI compliance audits, HUB and State Use Program audits, benefits proportional audits, and discretionary audits based on risk. The auditor said the office has released 43 higher-ed audit reports since fiscal year 2021 and has two audits in progress, and explained that internal audit reports from institutions help guide future audit selection. Senators pressed the office on the lack of enforcement authority, the value of internal auditors at each institution, and whether community colleges should have more standardized reporting and audit requirements. The auditor and general counsel said the SAO can refer suspected fraud to law enforcement but cannot itself enforce findings, while several senators suggested stronger clawback authority and more robust internal audit structures. The Texas Higher Education Coordinating Board explained that it collects annual financial reports, sources-and-uses data, and community college finance reports, and uses them for funding formulas and other reporting. It also trains governing board members and said it has limited regulatory authority, though community colleges must certify compliance annually and can lose eligibility for state funds if they do not. Members questioned the reliability of self-attested data, the adequacy of board training, and whether a single reporting structure would be more efficient. During public testimony, a ScholarShot representative argued for clearer, student-facing financial transparency so students can see total cost of attendance and the gap they must cover before enrolling.

Transcript Highlights:

• </c> had their laws enjoined by the federal had their laws enjoined by the federal courts<01:11:10.880
• <c> federal</c><01:36:48.639><c> government</c> uh federal my federal government uh federal my federal
• They are protecting their area, but it is federal land.
• They are protecting their area, but that's federal land.
• Now, at the federal level, engagement.

Summary: The committee first discussed a budget-related issue involving liquor commission enforcement staff and tobacco enforcement funding. A member explained that proposed cuts to “group two” enforcement positions at the liquor commission could jeopardize the tobacco enforcement money that flows to Health and Human Services, and expressed confidence that the enforcement division would ultimately be preserved. The main hearing was on Senate Bill 19, which would modernize hotel and motel statutes by repealing outdated requirements. The sponsor and the New Hampshire Lodging and Restaurant Association said the bill would remove obsolete rules such as the old guest book/card system and antiquated posting requirements for room rates and motel signs. Members questioned whether the bill would eliminate the requirement to record guest departure dates or affect inspection rights, and the witnesses said the intent was only to remove the book-and-card reference while leaving the rest of the recordkeeping requirement in place. Supporters argued the rate-posting rules are widely ignored, hard to enforce, and outdated in an era of digital reservations and variable pricing; the committee also discussed whether any consumer-protection purpose remained. The public hearing on SB 19 was then closed. The committee then heard Senate Bill 280FN, which would require food delivery services to have an agreement with a restaurant or food retail store before offering delivery from that business. The sponsor said the bill restores a prior law that had sunset and was intended to prevent third-party platforms from listing restaurants without consent. Restaurant industry testimony strongly supported the bill, describing problems with unauthorized listings, delayed deliveries, and reimbursement disputes, and saying the agreement requirement protects restaurant brands and consumer expectations. Members shared examples of delivery problems and voiced support for reinstating the safeguard.

Transcript Highlights:

• trigger the federal veterans status.
• </c> don't necessarily meet this the federal don't necessarily meet this the federal definition<00:03
• </c> annual training don't qualify as federal annual training don't qualify as federal service,<00:03
• And as you the the federal veterans.
• </c><00:10:34.240><c> So</c> have that administrative process. So have that administrative process.

Transcript Highlights:

• the new administration, with the release of executive orders, saw quick adjusting by all levels of government—federal
• In addition to the impacts of congressional action, there are potential impacts from federal administrative
• </c> potential impacts from federal potential impacts from federal administrative<00:41:36.480><c> action
• The benefits and the administrative costs are split between the, um, or sort of shared with the federal
• ><c> a</c><01:10:28.560><c> federal</c> the federal there was a federal the federal there was a federal

Committee: House Ways and Means

Transcript Highlights:

• portion of Access in a manner called an administrative services organization.
• Access provides federal dollars to help care for low-income and disabled people, but because of federal
• DDD and ALTCS have federal Medicaid funding. SMI people don't.
• Another placement had no medication administration help.
• My understanding is federal law supersedes state law.

Committee: Senate Senate Health and Human Services COR

Summary: The committee first approved the February 4 minutes, then heard Senate Bill 1086, which would require AHCCCS contractors to reimburse non-contracting providers for certain lab services when a member was referred by a contracting provider and would bar prior authorization for diagnostic services. The sponsor said the bill was intended to address unpaid claims and improve access, while Access testified neutral but warned the prior-authorization ban could increase utilization and create a fiscal impact. The committee adopted the Warner amendment limiting non-contracting reimbursement rates to no more than contracting rates, then passed SB 1086 as amended on a 4-2 vote. The committee then took up Senate Bill 1611, an emergency measure to require Access to contract with an administrative services organization for the American Indian Health Plan, while keeping Access ultimately responsible for administration. The chair’s amendment expanded ASO duties to include provider support, quality improvement, and data analytics, removed Access claims-payment authority, added tribal observers to the selection committee, and exempted IHS and tribal-facility services. The sponsor and tribal witnesses described the bill as a response to fraud, provider nonpayment, and harm to Native communities, while Access raised concerns about the fast timeline, tribal consultation requirements, possible duplication of program-integrity functions, and fiscal uncertainty. After debate over the emergency clause and tribal consultation, the committee adopted the amendment and passed SB 1611 as amended on a 5-2 vote. The committee also heard Senate Bill 1630, which would direct Access to seek federal approval for a Medicaid home- and community-based services program for adults with serious mental illness. Supporters said the bill would create a long-term community-care option for the sickest SMI members, reduce cycling through hospitals, jails, and homelessness, and potentially save state general fund dollars; family members and advocates testified in support. Access was neutral and said it was finalizing a fiscal estimate. The Angus amendment narrowed eligibility to long-term SMI, reduced the enrollment cap from 500 to 250, changed reporting to semiannual, and removed priority-order language; the committee adopted the amendment and passed SB 1630 as amended unanimously. Later, the committee passed Senate Bill 1193, which protects emergency medical care technicians’ personal identifying information from sale or disclosure by the Department of Health Services, after adopting a clarifying amendment expanding the protected information and addressing commercial requests. It then heard Senate Bill 1318, which repeals the state’s separate dense-breast notification requirement so Arizona law aligns with the FDA’s newer mammography notice standard; the sponsor and DHS said the change would reduce confusion from duplicate, slightly different notices, and the bill was moving forward with discussion of possible future amendment language.

Transcript Highlights:

• While the federal administration has attempted to justify these cuts with arguments that the funds were
• But as if that wasn't enough of an attack on California's health care system, the federal administration
• The administration is evaluating the significant administrative workload associated with the implementation
• The administration is evaluating this.
• Families are living in fear of federal immigration efforts.

Transcript Highlights:

• block grants, which are 100% federally funded.
• This amount includes $33.3 million in federal funds.
• There's some federal requirements.
• And we move through different administrations.
• Port Arthur and Orange County projects have already received federal appropriations the federal government

Bills: SB1 , SB 1

Committee: Senate Finance

Transcript Highlights:

• </c> administration might be working on. administration might be working on.
• </c> I don't think that bill, the federal I don't think that bill, the federal bill,<00:10:11.040><c>
• </c><00:15:00.160><c> level</c> able to advocate at the federal level able to advocate at the federal
• </c> federal level? federal level?
• </c> there not be a federal solution? there not be a federal solution?

Summary: The 2025 Artificial Intelligence Task Force met for its first meeting of the year and heard updates on federal AI policy, state implementation of Senate Bill 4, and the business community’s perspective on AI regulation. Co-chairs noted that federal legislation could affect the task force’s work later in the year, but said Kentucky still has significant issues to study, including energy, land use, education, social media, and children’s engagement with AI. The task force had quorum and no votes were taken. Kate Shanks of the Kentucky Chamber said the business community supports continued discussion but favors a federal approach over a patchwork of state laws. She described the Trump administration’s new AI executive order as emphasizing innovation over regulation, noted the pending federal AI action plan, and discussed congressional action including the Take It Down Act and industry-specific changes to existing laws. She warned that state-by-state AI rules could increase costs and burden businesses, and said the Chamber would prefer incremental, flexible policy that avoids conflict with existing law and limits private rights of action. Members asked about uniform model legislation, education uses of AI, and civil liability; Shanks said a model approach could help avoid fragmentation and that liability should generally be handled through consumer-protection-style enforcement rather than broad litigation. The Commonwealth Office of Technology then reported on implementation of SB 4, saying it has worked with industry, agencies, other states, and vendors to build an AI policy framework now in final review. Officials said an AI Governance Committee has been established and will meet in July, and a draft RFP is being prepared to meet the bill’s tracking and documentation requirements. They said no major implementation challenges have been identified so far, but the impact of pending federal rules remains uncertain. Members also discussed the need to educate students and teachers about AI, with one member emphasizing that schools should teach both how to use AI and how to think critically about information online.

Transcript Highlights:

• in different federal administrations.
• administrative hurdles.
• Act, under federal law...
• Court said weren't legitimate under the Administrative Procedures Act, under federal law, are actually
• We still do not have detail from the federal government.

Committee: Joint Joint Select Committee on Health Care and Behavioral Health Oversight

Summary: The committee first welcomed new DSHS Secretary Angela Ramirez, who described her background in public service and emphasized collaboration, relationships, and responsiveness to legislators as she begins her tenure. Members thanked her and noted they looked forward to working with her on the governor’s priorities and the state’s budget and service challenges. The committee then heard a presentation on the West Coast Health Alliance from Governor’s Office, Department of Health, and state health leadership. Witnesses said the alliance was formed by Washington, Oregon, California, and Hawaii to provide unified, science-based public health guidance, especially on vaccines, amid federal instability and misinformation. They said the alliance has already issued vaccine recommendations and statements rejecting a vaccine-autism link, and is working on return-to-work guidance and responses to federal ACIP actions. Members asked about workload and coordination with an East Coast public health group; witnesses said the main challenge is communicating unified guidance rather than reviewing studies themselves. Next, the Washington Health Benefit Exchange reported on open enrollment and the effects of federal changes, including the expiration of enhanced premium tax credits and HR1 provisions affecting immigrant eligibility and future auto-renewal rules. Officials said premium increases are driving some customers to drop coverage, while state actions such as silver loading and Cascade Care Savings are helping blunt the impact for many enrollees. They also described outreach through navigators, brokers, tribal organizations, and community groups, and noted rising website traffic and more customer questions during open enrollment. Members asked about enrollment trends, carrier participation, and how to communicate upcoming federal changes. Finally, the Health Care Authority and Office of the Insurance Commissioner reviewed the state’s health reform history and the impact of federal changes on Medicaid and the individual market. They highlighted ongoing state efforts on affordability, prescription drug oversight, primary care and behavioral health access, preventive services, and rural health funding. Witnesses said agencies are coordinating across DSHS, HCA, OIC, the Exchange, Employment Security, and others to prepare for Medicaid work requirements and other HR1 changes, while also trying to reduce administrative burden and preserve access to care. No votes were taken.

Transcript Highlights:

• The federal government, after I put this bill in drafting, we had a new administration, a new head of
• Robert Kennedy's administration.
• I think waiting on the federal government has proven to be I think waiting on the federal government
• That's why we think this should be a federal process.
• He's been nothing but gracious in doing so. federal solution that there's more energy for a federal solution

Committee: Senate Agriculture

Summary: The Committee on Agriculture met with a quorum present and heard four bills. CS/SB 150, by Senator Gates, would make it a third-degree felony to abandon a restrained animal during a declared weather emergency, such as a hurricane or tornado, and was presented as “Trooper’s Law” in response to a widely publicized rescue of a dog during Hurricane Milton. The bill drew supportive public cards and brief supportive remarks from Senator Boyd, then passed unanimously and was reported favorably. SB 374, by Senator Truenow, would refine the definition of farm product to include plant and plant products and bar local governments from adopting ordinances that limit the collection, storage, and processing of farm products on bona fide agricultural land. An amendment was withdrawn to allow further discussion on food waste issues. Speakers from composting, recycling, and poultry interests supported the bill, and it was reported favorably. SB 560, by Senator Martin, would restrict certain chemical additives in food products. The sponsor said the bill targets 10 chemicals he believes are harmful, noted that two have already been banned by the FDA, and argued Florida should act rather than wait for federal action. Industry and retail witnesses opposed the bill as creating a patchwork of state rules, raising costs, and disrupting supply chains, while some senators said they supported the bill for now but expected further changes. The committee reported the bill favorably, with Senator Rouson voting no. SB 572, the Pam Rock Act by Senator Collins, would create a statewide dangerous dog registry, add criminal penalties for certain dangerous-dog attacks, and require permits, microchipping, spay/neuter, and $100,000 liability insurance for dangerous dogs. The sponsor and the Rock family described severe attacks and deaths involving dangerous dogs and argued the registry would help protect the public. Some senators questioned the registry’s usefulness, the amount of information collected, and insurance availability, but the bill passed and was reported favorably. The committee then adjourned.

Transcript Highlights:

• More or less, this would require and at the federal level, the Trump administration has really talked
• That would need to be initiated by the federal government, and the federal government, I think up to
• </c> federal government, and the federal federal government, and the federal government,<00:06:41.200
• </c> federal policy. federal policy.
• </c> main federal holding facilities. main federal holding facilities.

Committee: House Public Safety Finance and Policy

Transcript Highlights:

• </c> and Republican administrations alike. and Republican administrations alike.
• </c> Donald Trump and his administration. Donald Trump and his administration.
• Federal employment dropped by 4,000 as the administration cuts government bloat.
• Federal employment dropped by 4,000 as the administration cuts government bloat.
• Federal employment dropped by 4,000 as the administration cuts government bloat.

Transcript Highlights:

• You'll see in the green bar that's the federal share.
• That's the federal share.
• from the state in federal funding per quarter.
• Federal standard is 45 days.
• Federal standard is 45 days.

Committee: House Human Services Finance and Policy

Transcript Highlights:

• You mentioned the federal government.
• And for me, when I think about all of the things that this administration has done that other administrations
• Obviously, there's a lot of attention to what the federal administration is seeking to do with California's
• And lastly, I did want to mention that federal delay And lastly, I did want to mention that federal delay
• Additionally, the federal funding landscape and uncertainties surrounding the consolidation of federal

Summary: The Assembly Budget Subcommittee on Climate, Crisis, Resources, Energy, and Transportation opened its first hearing on the governor’s natural resources budget with Secretary Wade Crowfoot of the Natural Resources Agency. Crowfoot reviewed California’s recent climate and environmental challenges—drought, wildfire, heat, sea level rise, and federal uncertainty—and highlighted progress on clean energy, zero-emission vehicles, wildfire resilience, water management, coastal planning, conservation, tribal land return, and streamlined project delivery. Members praised his engagement and the administration’s work with tribes, and Crowfoot emphasized that the administration is focused on finishing major projects, improving nature-based solutions, and considering whether some temporary streamlining measures should be codified. He also discussed the Mediterranean Climate Action Partnership and said the state is working with other Mediterranean-climate governments on wildfire, drought, and heat response. Members and the LAO then focused on budget conditions and priorities. The Legislative Analyst’s Office said the state budget remains precarious despite strong revenues, with the governor’s proposal relying on borrowing and reserves and leaving large out-year deficits unresolved. The LAO urged a high bar for new spending, especially in a deficit environment, and recommended prioritizing immediate health and safety needs, avoiding new ongoing commitments, and thinking carefully about special funds. On Proposition 4, the LAO said the administration’s approach generally appeared reasonable and consistent with the bond, but noted implementation has been slow and that the Legislature may want to use appropriations language to shape broad programs such as home hardening, outdoor recreation, and climate education. The chair stressed that climate and environmental funds should be used for their intended purposes and that wildfire spending should shift more toward community hardening and home protection. The hearing then turned to water resilience and Proposition 4 spending. Department of Finance and department staff outlined the bond’s water-related funding for safe drinking water, drought, flood, water recycling, stormwater, groundwater management, dam safety, and the State Water Project. Members pressed for details on how funds would be prioritized, how grants would reach disadvantaged communities, and how the state would track the bond’s 40% target for vulnerable communities. Staff said new tools and reporting systems are being used to monitor allocations, and that AB 107 and related changes should speed up grant implementation by reducing redundant regulatory steps. The committee also discussed dam safety needs, State Water Project repairs, groundwater implementation grants, and the risk of relying on uncertain future revenues from the Salton Sea lithium tax. No votes were taken, and the hearing was informational only.

Transcript Highlights:

• preemption directive, ...been the federal preemption directive from the executive order at the federal
• Has the federal government done anything, I guess, is done?
• Nor are they as dependent upon federal contracts and things like that.
• Things are happening at a federal level.
• Things are happening at a federal level.

Transcript Highlights:

• Federal funds are 7%.
• funds due to expired federal grants.
• funds due to expired federal grants.
• Federal funds are increasing by $15.1 million, which is the net effect of the decrease in federal funds
• So those have a more favorable federal match. That explains most of the federal decrease, not all.

Committee: House Appropriations

Summary: The committee first heard a budget presentation on LSU Health Care Services Division and Lallie Kemp Medical Center. Staff reviewed HCSD’s roughly $74.7 million budget, much of it tied to legacy obligations for former LSU hospital systems and support for Lallie Kemp. Committee members asked about prisoner care, risk management costs, declining admissions and emergency visits, and the hospital’s 340B drug program. Lallie Kemp officials explained that prisoner care serves multiple state and local facilities, that lower admissions largely reflect more patients being placed in observation status, and that the in-house 340B program provides major savings to patients and the prison system. Members also asked about care for unhoused patients and the hospital’s discharge practices, and the hospital said social services works to find placement when possible. The committee then moved to the Louisiana Department of Health budget, which was presented as just under $23.5 billion, with Medicaid making up more than 90 percent of the total. The presentation covered the Office of the Secretary, Office of Public Health, Office of Behavioral Health, Office for Citizens with Developmental Disabilities, and Medicaid. Major items included the new Rural Health Transformation Program, the transfer of several functions from DCFS to LDH under the One Door initiative, changes to SNAP administration, and large Medicaid adjustments driven by enrollment, utilization, and federal policy changes. Testimony also highlighted the statewide crisis hub and 988, the commodity food program for seniors, women’s health and maternal outcomes, and the department’s efforts to modernize technology and reorganize services. Members questioned LDH officials on a wide range of budget and policy issues, including the rural health grant, crisis services, Medicaid redeterminations, provider taxes, physician and hospital supplemental payments, nursing home rates, HCBS funding, and the impact of the federal One Big Beautiful Bill Act. LDH said the rural health grant would support workforce, technology, and care-delivery improvements; that the crisis hub and mobile crisis units are being expanded to improve access and reduce emergency room use; and that the department is working to keep the SNAP error rate below 6 percent to avoid a projected state cost increase. Officials also said they expect to return next year with additional funding requests for HCBS and other programs, while emphasizing that current budget changes are largely meant to realign funding with actual expenditures and new federal requirements. No votes or formal actions were taken in the portion provided.

Transcript Highlights:

• With the federal administration recklessly reducing staffing at the Internal Revenue Service of its tax
• While student loans have been moved now to the Small Business Administration, as of yet, no new administrative
• We don't make money like the federal government.
• administration.
• However, the federal timelines don't seem to normally be adhered to, even in prior administrations.

Summary: The Assembly Budget Subcommittee on Accountability and Transparency held a hearing focused on three issues: federal funding cuts and delays, possible state revenue impacts from reduced IRS enforcement, and the fiscal effects of AB 218 on local governments. The Franchise Tax Board described how state and federal tax systems are closely linked, how most returns are filed electronically through software, and how FTB relies on IRS information sharing for compliance, fraud prevention, offsets, and nonfiler work. Members raised concerns that federal staffing cuts at the IRS could weaken audits of large corporations and reduce California revenue, and asked about VITA and ITIN filers; FTB said it was not aware of VITA reductions, noted ITIN returns are processed the same as other returns, and said ITIN filing appeared slightly down this year. The Department of Finance said it is monitoring federal developments, summarized the continuing resolution and reconciliation process, and noted that California lost nearly $940 million in earmarked federal projects under the CR, while major federal budget decisions remain uncertain until the President’s budget and later congressional action. The University of California reported substantial federal pressure on research, student aid, and health care. UC said hundreds of millions of dollars in federal awards have already been canceled, with additional threats to NIH and DOE facilities-and-administration rates, graduate fellowships, student loan repayment plans, international student visas, Pell Grants, and Medicaid/Medi-Cal funding. Committee members pressed UC on the effects of DEIA-related federal restrictions, the loss of clinical trials and research staff, and the impact on low-income students and patients. UC said it is pursuing litigation with the Attorney General and other institutions, but emphasized that court action is only a temporary solution and that sustained state and private support may be needed. The second panel addressed the fiscal consequences of AB 218, which extended the statute of limitations for childhood sexual abuse claims against public agencies. FCMAT presented a report with 22 recommendations, including better statewide data collection, financing mechanisms, a possible victims compensation fund, and prevention measures. Los Angeles County described a tentative $4 billion settlement tied to AB 218 claims, saying it will require reserves, borrowing, and long-term annual payments through 2050, while also forcing curtailments and cuts to vacant positions to preserve services. Members discussed insurance pools, retroactive premiums, unidentified future claims, and the need for a compensation fund or other financing tools. No formal votes were taken; the hearing concluded with public comment, including testimony from local health officials about nearly $400 million in terminated federal public health grants and the resulting layoffs and service impacts.

Transcript Highlights:

• The law cuts federal Medicaid funding, putting benefits at risk.
• administration.
• administration.
• These federal cuts specifically...
• Recent federal court decisions...