Transcript Highlights:

• And from the Franchise Tax Board, Jennifer Barton, Director of the Legislative Services Bureau, Franchise
• And from the Franchise Tax Board, Jennifer Barton, Director of Legislative Services Bureau, Franchise
• Hello, Delinda Tamani with the Franchise Tax Board.
• I guess it's the Franchise Tax Board question.
• And there was agreement that the international... ...answering that, and there was agreement that the

Summary: The joint informational hearing examined California’s taxation of multinational corporations, especially the state’s water’s-edge election versus worldwide combined reporting. The LAO and Franchise Tax Board explained the basic mechanics of unitary taxation, apportionment, and how water’s-edge generally excludes most foreign subsidiaries while worldwide reporting includes the full unitary group. FTB officials said water’s-edge filers are a small share of corporate filers but account for a large share of tax liability, and they described filing trends, industry mix, and the administrative steps needed to administer either system. Members and witnesses debated the policy trade-offs. Supporters of moving away from water’s-edge argued that it enables profit shifting, especially for large multinational and IP-heavy firms, and that eliminating it could raise significant revenue and improve fairness for smaller domestic businesses. They cited estimates of billions in potential revenue and said California already has the audit and reporting infrastructure to handle worldwide reporting, though some transition time would be needed. Opponents argued that worldwide reporting would tax foreign activity unrelated to California, create double taxation, increase compliance burdens and litigation, and could be difficult for foreign-based multinationals to document. They also warned that some of the revenue estimates are highly uncertain because foreign affiliate income is not directly observable. Committee members asked about foreign government pushback, the risk of companies leaving California, the effect on intellectual property shifting, and whether federal or Supreme Court action could block a change. Witnesses generally said major firms would be unlikely to leave because California taxes sales rather than physical presence, but some costs could be passed on to consumers. The panel also discussed alternatives such as conforming to federal international tax rules like NCTI/GILTI and adding anti-abuse rules. No vote or bill action was taken; the hearing was informational only.

Transcript Highlights:

• We're also going to talk with the Franchise Tax Board about possible impacts to California revenues from
• I am Roger Lackey with the Franchise Tax Board. Thank you for inviting me.
• About 60% of tax that comes in through the Franchise Tax Board.
• And so the franchise tax board does have agreements with the IRS to receive information from the IRS
• Also, if I refer to the pandemic is that I think we like the franchise.

Keywords: 988, house, all

Transcript Highlights:

• We're also going to talk with the Franchise Tax Board.
• I am Roger Lackey with the Franchise Tax Board. Thank you for inviting me today.
• are received by Franchise Tax Board are from professional tax software.
• And so the Franchise Tax Board does have agreements with the IRS to receive information from the IRS
• For the Franchise Tax Board, what we try to focus on is we try to complete the...

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:

• </c> corporate franchise taxes. corporate franchise taxes.
• A bill that would require disclosure of franchise tax information.
• </c> franchise tax. franchise tax. Representative<00:46:51.120><c> Johnson.
• </c> uh uh subject to the corporate franchise uh uh subject to the corporate franchise tax,<00:47:19.680
• </c> understand and the corporate franchise understand and the corporate franchise tax<00:52:23.520><

Keywords: 1183, house

Transcript Highlights:

• Today our hearing will cover the Governor's Tax Proposals, Franchise Tax Board, California Department
• Tay Luong from the Franchise Tax Board.
• Tane Wong, Franchise Tax Board. So, issue number six is the asset forfeiture accounts.
• I'm Roger Lackey with Franchise Tax Board. I'm here to present on item number 7.
• ITD is not in a position to enter into an interagency agreement with them.

Keywords: 988, house, all

Transcript Highlights:

• Franchise tax grew by 25%.
• The franchise tax is a tax that is levied, uh, on the privilege of doing business in Texas.
• Uh, the various rates for the franchise tax are listed for you on page 4 of your handout.
• Uh, for tax year 2024, there were a total of 2.9 million registered franchise taxpayers.
• Franchise taxes, not necessarily. A property tax.

Transcript Highlights:

• Um, happy to be here laying out HB 3830 relating to a franchise tax credit for certain watershed protection
• And, and if, and my, if my memory serves me correctly, we had an agreement that, that just a verbal agreement
• So the agreement was that if there was any issue with that, that there would be a That we would just
• A dog in this fight when it comes to trying to with the franchise tax piece of this, but it, but we're
• It is my honor to lay out HB 1879 before you today, which will provide franchise, excuse me, franchise

Bills: SB 4, SB 23, SJR 2

Keywords: redistricting, election, Texas legislature, district composition, political representation, congressional redistricting, Texas House of Representatives, U.S. House, Congressional districts, district map, district boundaries, gerrymandering, voting rights, election law, apportionment, representation, special committee, PLANC2308, redistricting plan, elections

Transcript Highlights:

• House Bill 313, an act relating to city franchises. Representative Bivens.
• agreement.
• agreement.
• Utility franchise agreements carry lasting financial and operational impacts, and cities should be able
• For these reselling these agreements.

Keywords: Convene 00:00 Senate Message 05:09 Calendar/2nd Readings 05:59 Report of Committees 07:10 Orders of the Day 08:11 HJR 25 08:26 HB 66 11:58 HB 305 16:20 HB 432 22:44 HB 313 27:29 HB 44 30:26 Motions, Petitions, and Communications 34:30 Introduction of New Bills and Resolutions 42:07 Recess for ConC/Rules Meeting 43:38 ConC/Rules Report 47:26 Floor Amendments 48:25 Adjournment 48:54, 958, all

Transcript Highlights:

• New motor vehicle dealers operate under franchise agreements with the original equipment manufacturers
• </c> which represents our state's franchise which represents our state's franchise new<00:34:56.639><
• original</c> franchise agreements with the original franchise agreements with the original equipment<
• </c> also increase the corporate franchise also increase the corporate franchise tax<00:54:35.760><c>
• </c> franchise tax to 12.45%. franchise tax to 12.45%.

Keywords: 1187, senate, all

Transcript Highlights:

• For 45 years, community television has been funded by cable franchise fees and PEG fees.
• Beyond funding, our franchise agreement has helped ensure the buildout of cable infrastructure in our
• </c><01:14:50.560><c> agreement</c><01:14:50.920><c> has</c> funding our franchise agreement has funding
• our franchise agreement has helped<01:14:51.400><c> ensure</c><01:14:51.719><c> the</c><01:14:51.880
• </c> internet and Broadband is not franchised internet and Broadband is not franchised like<01:15:06.400

Bills: HF1679, HF1019, HF2321, HF1740, HF2278

Keywords: public television, funding, grants, arts and culture, Minnesota, Minnesota Public Radio, arts education, cultural heritage, community engagement, public radio, community radio, educational grants, community cable, public access, programming funding, civic engagement, ethnic media, public access television, Minnesota Humanities Center, funding appropriation

Transcript Highlights:

• In fact, there's an existing loophole that allows for franchise business tax and business trusts that
• Agreements that those individuals don't pay their bills, but they don't.
• So, I would describe them more as the developers, whoever it is that entered into the agreements with
• certain contracts or agreements pertaining to electric utility infrastructure.
• Indemnity agreements with listed exceptions.

Bills: HJR98, HJR8, HJR133, HB23, HB33, HB144, HB 109, HB 103, HB148, HB3809, HB1686, HB2217, HB2156, HB220, HB2421, HB2363, HB3773, HB421, HB2584, HB2615, HB2455, HB3711, HB2559, HB3747, HB2775, HB2886, HB3126, HB3666, HB3595, HB3260, HB3506, HB1638, HB3376, HB3826, HB3628, HB1349, HB3770, HB1831, HB1762, HB2614, HB3113, HB267, HB322, HB431, HB869, HB 1203, HB 1201, HB 1244, HB1875, HB1950, HB2152, HB2290, HB2341, HB2436, HB2809, HB2856, HB3012, HB2954, HCR56, HCR102, HB 107, HB1587, HB3684, HB658, HJR99, HB1399, HJR5, HJR2, HJR6, HJR31, HB1971, SJR3, HB1775, HJR72, HB502, HB3109, HJR98, HJR8, HJR133, HB 118, HB388, HB 114, HB205, HB2789, HB2791, HB499, HB2960, HB3163, HB3135, HB2427, HB1618, HB1672, HB1722, HB1338, HB787, HB2618, HB879, HB 1126, HB4134, HB3513, HB718, HB1536, HB1445, HB1640, HB1893, HB1734, HB3229, HB3306, HB 1276, HB3272, HB3276, HB3516, HB4145, HB1585, HB4810, HB2989, HB2558, HB3014, HB2742, HB1695, HB23, HB33, HB144, HB 109, HB 103, HB148, HB3809, HB1686, HB2217, HB2156, HB220, HB2421, HB2363, HB3773, HB421, HB2584, HB2615, HB2455, HB3711, HB2559, HB3747, HB2775, HB2886, HB3126, HB3666, HB3595, HB3260, HB3506, HB1638, HB3376, HB3826, HB3628, HB1349, HB3770, HB1831, HB1762, HB2614, HB3113, HB267, HB322, HB431, HB869, HB 1203, HB 1201, HB 1244, HB1875, HB1950, HB2152, HB2290, HB2341, HB2436, HB2809, HB2856, HB3012, HB2954, HCR56, HCR102

Keywords: Article V, federal government, fiscal restraints, constitutional amendment, term limits, nuclear energy, electric generation, funding, Texas nuclear development fund, advanced reactors, HJR 133, Texas constitutional amendment, ad valorem tax, property tax exemption, homestead exemption, surviving spouse, veteran, veterans benefits, service-connected death, presumed service-connected condition

Transcript Highlights:

• Franchise tax grew by 25 percent.
• The franchise tax is a tax that is levied on the privilege of doing business in Texas.
• The various rates for the franchise tax are listed for you on page 4 of your handout.
• Taxes, franchise taxes, not necessarily.
• So I'm in partial agreement and I want to be a resource and Hopefully, that's a good answer.

Keywords: 1184, house, all

Transcript Highlights:

• The other bill, uh... but the AR21 NSS-1, this is a negotiated agreement that is a consensus that was
• Obviously, this does not have anything to do with the future of medical cannabis and removes the franchise
• You said it removed the franchise language. Can you give a little bit more information about that?
• But, uh, the franchise language just doesn't protect somebody in a franchise agreement to say that they
• It would be a franchise with any other type of beverage or product. It just...

Bills: HB194, SB87, SB237

Keywords: healthcare, advanced practice nursing, nurse collaboration, medical board, nursing board, committee structure, midwifery, licensed midwives, State Board of Midwifery, licensure fees, professional liability insurance, complaints investigation, emergency care plan, out-of-hospital care, hemp, hemp beverages, psychoactive cannabinoids, psychoactive hemp products, delta-8 THC, delta-9 THC

Transcript Highlights:

• We have seen more revenue sharing agreements, and we have that information on our website, and we're
• Now we turn our attention to agenda items involving the Franchise Tax Board.
• I'm Roger Lackey, the Chief Financial Officer at the Franchise Tax Board.
• Today I'll be covering item 12, the overview of the Franchise Tax Board, as well as item 13, which is
• I am Abel Escobar, Director of Financial Management for the Franchise Tax Board, here to present item

Summary: The subcommittee first received an informational update on the Governor’s Office of Service and Community Engagement (GoServe), including California Volunteers, the Office of Community Partnerships and Strategic Communications, and the Youth Empowerment Commission. GoServe reported strong participation in College Corps, Youth Service Corps, and Climate Action Corps, along with outreach results from OCPSC and the Trusted Messenger Network. The Department of Finance said the programs remain a priority but noted prior budget reductions, while the LAO said it had no new recommendations. Committee members raised questions about program diversity, geographic reach, administrative costs, and whether the programs duplicate existing volunteer opportunities; one member criticized the programs as costly and duplicative, while another emphasized the value of volunteerism and asked about the men’s service challenge. The item was informational only. The committee then heard an overview of the Board of Equalization’s property tax responsibilities and its first budget proposals since the 2017 reorganization. BOE described its role in county assessment oversight, state-assessed property valuation, and related tax administration. Members asked about BOE’s interaction with counties, property tax reassessments, and local tax notices; BOE explained it mainly works with county assessors and handles technical property tax questions, while local special district charges are generally outside its scope. The committee also considered a BOE proposal to implement SB 293, which would give additional time for certain intergenerational property tax transfer claims after the 2025 wildfires. BOE requested $154,000 for guidance, public materials, and inquiry response work, saying the change is urgent for wildfire-affected families, especially in Altadena. The LAO had no concerns, and the item was held open. BOE also presented an information technology modernization proposal for its state-assessed property program, seeking $3.2 million in 2026-27 and $3.1 million in 2027-28 to replace a 30-year-old mainframe system. BOE said the current system relies heavily on manual data entry and paper processes, creating inefficiencies, cybersecurity risks, and delays, while modernization would free staff for more audits and valuation studies. The LAO supported the need but urged a high bar for new IT projects; Finance said the project met the threshold of necessity. Members generally supported the upgrade but asked about audit gains, revenue impacts, and implementation risks, and the item was held open. Finally, CDTFA gave its department overview and then discussed a proposal to require all delivery network companies, such as Uber Eats and DoorDash, to be treated as marketplace facilitators for sales tax purposes. CDTFA said the current carve-out creates confusion for restaurants and small businesses because some DNCs collect and remit tax while others do not, and the change would improve compliance and shift reporting to larger platforms. Members debated whether the proposal amounts to a tax increase for consumers, with CDTFA and Finance arguing it is a consistency and compliance measure rather than a new tax, while others said it would likely raise consumer costs. The committee also discussed broader CDTFA issues, including local sales tax districts, revenue-sharing agreements, and the growth of special taxing jurisdictions. No votes were taken, and the agenda items were informational or held open.

Transcript Highlights:

• Only 41% of facilities with this new, this, this net lease agreement were approved.
• There are protections on homestead agreements, but not, not for the, yeah.
• Sure, for the franchise tax, yes.
• And therefore that they should not be included in the franchise tax.
• This is a almost forward looking hopeful projected future type of franchise tax, right?

Transcript Highlights:

• And from the Franchise Tax Board, Jennifer Barton, Director of the Legislative Services Bureau, Franchise
• Hello, Delinda Tamani with the Franchise Tax Board.
• I guess it’s a Franchise Tax Board question.” “So the frame.”
• “I guess it’s the Franchise Tax Board question.
• And there was agreement that the international... ...answering that, and there was agreement that the

Summary: The joint informational hearing examined California’s taxation of multinational corporations, especially the Water’s Edge election versus worldwide combined reporting. Chairs opened by framing the issue as a review of whether current rules fairly and sufficiently tax foreign subsidiary income, given profit shifting concerns, budget pressures, and the long history since Water’s Edge was adopted in the 1980s. The first panel from the Legislative Analyst’s Office and Franchise Tax Board explained the mechanics of unitary taxation, apportionment, and the Water’s Edge election, and provided filing data showing Water’s Edge filers are a small share of returns but account for a large share of corporate tax liability. FTB witnesses said the agency already administers both methods and could handle a shift to mandatory worldwide reporting with education and outreach, though revenue estimates are difficult because foreign affiliate information is not directly available. Committee members asked about foreign government pushback, administrative burden, industries with more profit shifting, revenue uncertainty, and whether companies would leave California. LAO and FTB witnesses said pushback from foreign governments was plausible, but they did not expect major business flight because California’s tax is largely based on sales rather than physical presence. They also said worldwide reporting could reduce profit shifting but might increase revenue volatility and litigation risk. A second panel of academic and tax policy witnesses argued that Water’s Edge is a loophole that rewards aggressive tax planning, that worldwide combined reporting would better capture income tied to California, and that modern federal and international rules such as NCTI/GILTI, CAMT, and Pillar Two reduce compliance concerns and make a return to worldwide reporting more feasible. They also said California’s current system can create selection effects and may under-tax large multinationals. In the next panel, a California Budget and Policy Center witness urged eliminating the Water’s Edge election, calling it a costly loophole that benefits large global corporations over smaller domestic businesses and deprives the state of billions in revenue that could support health care and other services. A Silicon Valley Leadership Group witness gave historical context for why Water’s Edge was adopted and began outlining concerns about compliance, double taxation, and the risk of overreaching beyond income truly connected to California. No bill was voted on or advanced; the hearing was informational only, with members using the testimony to weigh the policy trade-offs and possible transition periods if the Legislature were to change the current rules.

Transcript Highlights:

• And from the Franchise Tax Board, Jennifer Barton, Director of the Legislative Services Bureau, Franchise
• Hello, Delinda Tamani with the Franchise Tax Board.
• I guess it’s a Franchise Tax Board question.
• So the frame—” “I guess it’s the Franchise Tax Board question.
• And there was agreement that the international tax world now is not 1980.

Summary: The joint informational hearing focused on California’s taxation of foreign subsidiaries of U.S. corporations, especially the state’s water’s-edge election versus worldwide combined reporting. Committee members and witnesses discussed how unitary taxation and sales-factor apportionment work, why multinational corporations are a small share of filers but a large share of tax liability, and how foreign income, profit shifting, and double taxation concerns affect policy choices. The Franchise Tax Board explained current filing rules, the seven-year water’s-edge election, and recent filing statistics showing about 21,562 water’s-edge returns in 2023, roughly 6% of C corporation filers but about half of corporate tax liability. The Legislative Analyst’s Office and FTB staff emphasized that revenue effects from eliminating water’s edge are uncertain because foreign affiliate income is not directly observable, and they noted possible revenue volatility and administrative complexity. Several committee members asked about foreign government pushback, the burden on FTB, whether certain industries are more likely to shift profits, and whether companies would leave California; witnesses generally said there was no strong evidence that firms would exit the state because tax liability is driven mainly by California sales. They also discussed how California already administers both methods, how the election can be advantageous or disadvantageous depending on a firm’s facts, and how federal reforms like GILTI/NCTI, CAMT, and OECD Pillar Two may affect the issue. The second panel presented sharply contrasting views. One professor and a tax policy advocate argued that water’s edge creates unfairness, encourages profit shifting, and leaves California with billions in lost revenue, while a Tax Foundation witness argued that mandatory worldwide reporting would tax the wrong income, create double taxation and litigation risk, and impose heavy compliance burdens, especially for foreign-based multinationals. A later panel from the California Budget and Policy Center supported closing the “water’s-edge loophole,” saying it would raise needed revenue for public services and level the playing field between large multinationals and smaller domestic businesses. No vote or formal action was taken; the hearing was informational only.

Transcript Highlights:

• And from the Franchise Tax Board, Jennifer Barton, Director of the Legislative Services Bureau, Franchise
• Hello, Delinda Tamani with the Franchise Tax Board.
• I guess it's a Franchise Tax Board question. So the frame.
• I guess it's the Franchise Tax Board question.
• And there was agreement that the international... ...answering that and there was agreement that the

Keywords: 988, house, all

Transcript Highlights:

• Employers can then qualify for the corresponding franchise tax credit to offset costs. their costs.
• That's why part of the second part is talking about the franchise tax credit to help the employers who
• So, the question I have is because I also own a franchise.
• It's obviously not a pet franchise, but our franchise has a corporate level because I think there are
• I took him to their vet, per the agreement.

Bills: HB74, HB175, HB460, HB576, HB2271, HB2294, HB2874, HB3016, HB3133, HB3191, HB3458, HB3929, HB4063, HB4115, HB4394, HB74, HB175

Keywords: Puerto Verde, Port Authority, eminent domain, bonds, tax assessments, economic development, infrastructure, transportation, public welfare, child care, certifications, Texas Rising Star Program, grant program, disability inclusion, family income, affordability, economic impact, state study, cost analysis, government support

Transcript Highlights:

• It's relating to international cooperation agreements between certain state agencies in the United Mexican
• action relating to a security travel with that. security and the parties may agree to modify the agreement

Bills: HB74, HB175, HB460, HB576, HB2271, HB2294, HB2874, HB3016, HB3133, HB3191, HB3458, HB3929, HB4063, HB4115, HB4394, HB74, HB175

Keywords: Puerto Verde, Port Authority, eminent domain, bonds, tax assessments, economic development, infrastructure, transportation, public welfare, child care, certifications, Texas Rising Star Program, grant program, disability inclusion, family income, affordability, economic impact, state study, cost analysis, government support