Transcript Highlights:

• For instance, our pharmacists use an online pharmacy formulary that provides them with the most up-to-date
• are proposing trailer bill language to remove the June 30, 2026 sunset date for the Independent Placement
• The Independent Placement Panel Program, also known as IPP, was piloted as an independent panel to improve
• The independent placement panel could thereby expand the availability of state hospital beds for IST
• The Independent Placement Panel largely met its objectives, with increasing step-downs to the CONREP

Transcript Highlights:

• communication dealing with measurable and outcomes-based conversations around services, therapies, and formularies

Committee: Senate Health and Human Services

Transcript Highlights:

• So while we recognize the difficulties in the placement process right now and the good intentions in
• this bill, it ultimately does not solve the placement problem, and it ultimately also prolongs the issue
• The placement problem, and it ultimately also prolongs the issue and further delays access to treatment
• In the meantime, we need to utilize existing resources to learn what's working right now in the placement
• And if they're taking this medication, they can avoid a nursing placement, and that frees up the bed

Transcript Highlights:

• covering all of the May Revision items, with the exception of the IST solutions and the independent placement
• covering all of the May Revision items, with the exception of IST solutions and the independent placement
• The independent placement panel was piloted as an independent panel to improve CONREP access and participation
• The independent placement panel largely met its objectives by increasing step-downs to the CONREP continuum
• The problem that we've run into is we may have something like the online pharmacy formulary, right?

Transcript Highlights:

• covering all of the May Revision items, with the exception of IST solutions and the independent placement
• The independent placement panel was piloted as an independent panel to improve CONREP access and participation
• The independent placement panel largely met its objectives by increasing step-downs to the CONREP continuum
• The problem that we've run into is we may have something like the online pharmacy formulary, right?
• workforce programs aid the overall behavioral health workforce continuum and allow flexible post-program placement

Summary: The committee first heard May Revision child care and human services items. The Department of Child Support Services described two technical adjustments, which the analyst supported. The Department of Social Services then walked through child care proposals, including a reduction in federal and Proposition 64 funding absorbed through a shift from General Child Care to the Alternative Payment program, a 2.01% child care COLA, disaster-related infrastructure grants, a new administrative support cost structure for Alternative Payment agencies, the removal of prospective pay funding after a federal rule change, a reappropriation for existing infrastructure grants, and estimates of unspent child care funds. The Legislative Analyst’s Office recommended asking for more justification for shifting reductions to CAP, supported the COLA reduction but wanted consistency across programs, recommended removing prospective pay funding, opposed the administrative cost shift, and suggested further review of disaster grant alignment. Members pressed the administration on why more slots would be cut for the same savings, why the COLA was reduced, and whether the administrative percentage would grow over time. The administration said the changes were intended to avoid disrupting currently enrolled families, reflect point-in-time relinquishments and unspent funds, and stabilize contractor operations. Public commenters, including providers, advocates, and county representatives, urged full COLA funding, rejection of child care slot reductions, preservation of prospective pay, and continued investment in child care infrastructure and access. The subcommittee then recessed before moving to health items. In Part B, the Department of State Hospitals presented its May Revision proposals, including a central utility plant replacement project at Metropolitan State Hospital, funding for a continuum electronic health record system, reduced county bed billing authority to reflect phase-in of additional LPS beds, limited contract exemption authority for online clinical subscription services, reversion of prior-year unspent operating funds, and a workforce development proposal to use Behavioral Health Services Act funds instead of General Fund for training programs. The department said the EHR would modernize records and improve continuity of care, and that the contract exemption would prevent delays in essential clinical information services. No votes were taken in the excerpt provided.

Transcript Highlights:

• reliability and bias monitors, tools designed to assess credibility, accuracy, and risk in media placements
• those ads are placed, agencies must consider where taxpayer dollars are going and whether those placements
• failure, especially seeing as New College has the lowest median starting salary for graduates and job placement
• failure, especially seeing as New College has the lowest median starting salary for graduates and job placement
• First, mandate implementation of a formulary for the state group insurance program beginning in 2027.

Transcript Highlights:

• We have medicines now on our formulary, our gene therapies.
• We have medicines now on<01:03:33.520><c> our</c><01:03:33.680><c> formulary</c><01:03:34.640><c> our
• </c><01:03:36.000><c> I</c> on our formulary our gene therapies.
• I on our formulary our gene therapies.
• who look at prescribing practices, where we can continue to refine the quality of prescribing and formulary

Summary: The committee first handled roll call and approved the prior meeting minutes. Members discussed attendance and substitutions, then moved to the DHS commissioner’s update, which focused on New Hampshire’s Medicaid 1115 waiver and the new community re-entry initiative for people leaving correctional facilities. The presenter explained that the waiver lets the state cover certain services not normally covered under Medicaid, including substance use disorder treatment, serious mental illness services, adult dental benefits, and the new community re-entry component. She also noted that a separate youth re-entry component is federally required, with youth defined up to age 21 and foster-care-related coverage extending to age 26. The update described how the adult re-entry program works for incarcerated individuals with behavioral health needs, providing up to 45 days of pre-release services, care coordination with managed care organizations and DOC staff, telemedicine assessments, discharge prescriptions, insurance cards, and connections to community mental health, primary care, and substance use providers. For youth, the program includes more intensive case management, 30 days of pre-release services, and 30 days of post-release care coordination, with a stronger emphasis on screening, diagnosis, and holistic assessment. The presenter said New Hampshire received the adult waiver in July 2024, has implemented the program in state correctional facilities, and is beginning work at the youth center. Members and the presenter discussed why the program is structured as a waiver rather than a standard Medicaid benefit, with the explanation that CMS is allowing this as a newer policy area and that states generally pursue waivers for certain services. The chair and others emphasized the need for real cost and outcome data, and the presenter said an independent evaluator and evaluation plan are required under the 1115 waiver. Early results cited included 30 adults enrolled so far, 10 released, five youth enrolled with one released, and anecdotal early successes such as housing, employment, and better continuity of medication and treatment. The committee did not take any additional votes or formal actions beyond approving the minutes.

Transcript Highlights:

• So we are working with a formulary management company now that is helping to reduce overall costs and

Summary: The Finance Advisory Committee approved the minutes from its May 14, 2026 meeting and then considered four fiscal transfers. FAC 2026-9 for the Office of the State Controller transferred $4.345 million among fringe benefit accounts in the General Fund and Special Transportation Fund. Members questioned several employee benefit accounts, including active and retiree health care, Social Security, higher education alternative retirement, and OPEB; agency staff explained the transfers were based on updated year-end projections, with some accounts showing surpluses and others needing additional funds. The item was approved, with two no votes noted. FAC 2026-10 for the Military Department transferred $150,000 from the Honor Guards account to personal services and Governor’s Guard accounts to cover operational needs, and it was approved without opposition. FAC 2026-11 for the Department of Social Services transferred $3.3 million among accounts. Most of the discussion focused on a surplus in the substance use disorder waiver/reinvestment account, lower-than-expected TANF/TFA caseloads, federal family planning backfill requirements, and staffing challenges in eligibility operations. DSS said some funds remained unused because a residential care vendor did not enter into a contract, some reserves were intended for future multi-year investments, and eligibility staff require 12 to 18 months of training; the item was approved. FAC 2026-12 for the Department of Children and Families transferred $3.05 million among accounts for year-end operational needs. Members asked about closures of day treatment and community-based prevention programs, and DCF said children were transitioned to other providers without service interruption, with closures driven by provider decisions and financial viability. DCF also explained that some prior funding had been used as gap funding and that ongoing support had been built into the budget. The committee approved the transfer and then adjourned.

Transcript Highlights:

• a higher level of care, and just over 24% qualified for inpatient rehab or skilled nursing home placement
• A hospital can have something like a non-opioid, a novel non-opioid, on their formulary, and now in that
• I would say generally based on the numbers I've seen fairly decent access or placement, again, in terms

Summary: The committee first approved the previous meeting minutes and then heard a detailed annual report from Dr. Thomas Arnold, chair of the Maternal Mortality Review Committee, on maternal mortality trends and policy issues. He explained the committee’s review process, confidentiality protections, and national and North Dakota data showing that most maternal deaths are preventable and that mental health conditions, substance use, cardiovascular issues, infection, hemorrhage, and embolism are the leading causes. Members asked about suicide, domestic violence, midwife training, home births, and whether pregnancy testing at death scenes should be expanded; Dr. Arnold said better coroner education, more investigation of unexplained deaths, and possible post-mortem pregnancy testing could improve case identification, especially in rural areas. He also noted that deaths often occur well after 42 days postpartum and that mental health-related deaths remain a major concern. The committee then heard from State Fire Marshal Dr. Matthew Clark on cigarette reduced-ignition-propensity standards and related fire prevention issues. He recommended updating the state’s cigarette propensity law to current national standards and also raised a separate recommendation to require fast-breakaway oxygen tubing for home oxygen users, citing fatal fires linked to smoking around oxygen. Members asked about implementation, cost, insurance coverage, and whether the standards apply in tribal communities; Dr. Clark said he would provide follow-up information and was willing to help with any legislation, but no agency bill had yet been planned. Next, Christine Greff of the Department of Health and Human Services reported on the North Dakota Stroke System of Care. She described the statewide network of stroke-ready hospitals, registry-based quality improvement, and performance data showing continued improvement in stroke recognition, imaging, thrombolytic treatment, transfers, and EMS pre-notification. She highlighted new quality measures for inter-facility transfers and intracerebral hemorrhage care, and said the system remains strong but depends on continued legislative and hospital support. Committee members asked about participation by the VA hospital and were encouraged to consider outreach to include it more fully in the stroke system. Finally, the committee began a presentation on prior authorization and non-opioid pain treatment from Taha Khan of Vertex Pharmaceuticals. He argued that prior authorization can delay access to non-opioid acute pain medications, especially in the 24- to 72-hour post-discharge window when pain is most severe, and said delays can push patients toward opioids. He emphasized that prior authorization has a role in utilization management but should not create barriers in acute pain care, and he noted that current use of the company’s non-opioid product remains very low. The discussion was still underway when the transcript ended.

Transcript Highlights:

• more in the short term than a skilled nursing-based program, but if they prevent a long-term SNF placement
• more in the short term than a skilled nursing-based program, but if they prevent a long-term SNF placement
• I specialize in formulary management and drug policy.

Committee: Joint Joint Committee on Financial Services

Summary: The Joint Committee on Financial Services held a lengthy public hearing with testimony on a wide range of health insurance and access-to-care bills. Early testimony focused on prescription drug pricing and pharmacy reimbursement, with supporters of H. 1326 arguing that pharmacy benefit managers and MassHealth managed care arrangements reimburse independent pharmacies too little, contributing to pharmacy closures and “pharmacy deserts.” The committee also heard repeated support for H. 1151/S. 742 on cognitive rehabilitation for acquired brain injury, H. 1288/S. 716 on telehealth parity for nutrition counseling, H. 1309/S. 761 on full-spectrum pregnancy care without cost-sharing, H. 1312 on insurance coverage for doula services, H. 309 on prompt access to health care by removing deductibles for certain services, H. 809/H. 1227 on biomarker testing, H. 1162/S. 810 on reducing inequities in access to medical procedures by limiting insurer cuts tied to Modifier 25, and S. 726 on insurance coverage for mobile integrated health. Testifiers included legislators, physicians, pharmacists, dietitians, emergency and rehabilitation clinicians, and patients and family members. Supporters of the brain injury bill said cognitive rehabilitation is medically necessary, improves long-term outcomes, and can reduce institutional care and public costs; they noted the bill has been heard repeatedly and has support from the Brain Injury Commission and prior favorable committee action. Supporters of the pregnancy care and doula bills described out-of-pocket costs as a barrier to maternal health and shared personal stories of high bills and unmet support needs. Biomarker testing advocates and cancer patients said coverage gaps deny patients access to precision treatment, can lead to avoidable suffering, and should be standardized across insurers; several speakers said insurers often deny claims despite clinical benefit. Dermatology witnesses said insurers’ use of Modifier 25 cuts reimbursement for same-day evaluation and procedure visits, forcing separate appointments and increasing patient burden. Mobile integrated health supporters described home-based care as a way to reduce emergency department use and hospital readmissions, especially for patients with transportation or mobility barriers. No votes or formal committee actions were taken during the hearing itself.

Transcript Highlights:

• and it finds that access to antipsychotic drugs through Medicaid programs in Florida, which has formulary

Committee: Senate Health Policy

Summary: The Senate Committee on Health Policy met with a quorum and heard five bills. SB 126, on prescription hearing aids, would remove Florida’s prohibition on mailing hearing aids when required tele-audiology testing and procedures are completed before sale. The sponsor said the bill would improve access, especially for people with travel or geographic barriers. The Florida Academy of Audiologists expressed support in concept but said it was still working with the sponsor on an amendment for consumer safety. The committee voted the bill favorably. SB 152 would require hospitals and ambulatory surgical centers to adopt policies using smoke evacuation systems during certain surgical procedures. Supporters, including the Florida Nurses Association and several nurses, described surgical smoke as a workplace and patient safety hazard containing harmful chemicals, viruses, bacteria, and other contaminants, and said evacuation technology is available and already required in some settings. The committee voted the bill favorably. SB 264 would expand step-therapy exemptions for severe mental illness, including certain postpartum and pregnancy-related mental health conditions, so physicians would not have to require patients to fail preferred drugs in specified circumstances. Support came from Otsuka Pharmaceuticals, NAMI Florida, and several medical and pharmacy groups, who argued that delays in effective treatment can worsen crises and increase hospital and crisis-care costs. The committee voted the bill favorably. SB 342 would create a public-records exemption for current and former AHCA employees and certain family information, citing threats and harassment directed at inspectors and regulators. President Gaetz said he generally opposes such exemptions but supported this one because the employees are not elected officials and face real safety risks. The committee voted the bill favorably. SB 294 would limit the Board of Pharmacy’s ability to add heart failure, coronary heart disease, and cardiac rhythm disorders to the list of chronic conditions eligible for collaborative pharmacy practice, keeping those conditions under direct physician management. The Florida Society of Thoracic and Cardiovascular Surgeons, Florida Medical Association, and the Florida chapter of the American College of Cardiology supported the bill, while the Florida Society of Health System Pharmacists opposed it. The committee voted the bill favorably. Senator Trumbull asked to be recorded in support of SB 126 and SB 152, and the meeting adjourned without further business.

Bills: SB1465 , SB2110 , SB1771 , SB206 , SB1584 , SB1386 , SB1696 , SB1806 , SB1428 , SB1390 , SB1381 , SB201 , SB1778 , SB1332 , SB1836 , SB1369 , SB1794 , SB1290 , SB175 , SB1379

Keywords: professional engineers, surveyors, licensure board, sunset extension, state board, occupational licensing, engineering license, surveying license, professional regulation, regulatory board, sunset review, emergency clause, Oklahoma O.S. 59, board appointments, lay member, SB2110, eggs, ungraded eggs, graded eggs, egg sales

Transcript Highlights:

• This is just a vehicle to find them placement faster rather than sticking them in a jail Cell or in an

Bills: SB1421 , SB1427 , SB1484 , SB1503 , SB1553 , SB1557 , SB1564 , SB1566 , SB1567 , SB1591 , SB1642 , SB1794 , SB1837 , SB2044

Committee: Senate Health and Human Services

Keywords: mental health, nonphysical intervention, training, youth care, conflict resolution, staff training, pediatric screenings, type 1 diabetes, health care providers, parental consent, reimbursement, state funding, public health, medicolegal investigation, medical examiner, coroner, sudden infant death syndrome, SIDS, sudden unexpected infant death, SUID

Bills: HB3790 , HB2941 , HB2959 , HB3087 , HB3974 , HB3500 , HB3697 , HB3262 , HB3582 , HB4226 , HB3037 , HB4139 , HB4143 , HB4144 , HB2936 , HB3322 , HB4296 , HB3278 , HB4202 , HB4176 , HB3303 , HB3648 , HB4119

Committee: House Civil Judiciary

Keywords: home repairs, consumer protection, contracts, homeowner rights, rescission, fentanyl, overdose, first responders, drug reporting, immunity, controlled substances, penalties, school abuse reporting, child abuse, neglect, mandatory reporting, student safety, school employee misconduct, administrator reporting, superintendent

Transcript Highlights:

• professional development, microcredentialing, as well as additional resources going through the formulary

Bills: HB1675 , HB3242 , HB1739 , HB3320 , HB3047 , HB4434 , HJR1089 , HB4432 , HB3718 , HB3705 , SR43 , HB1933 , HB4248 , SB1847 , SB1778 , HJR1086 , HB3001 , HB3002 , HB3003 , HB3004 , HB3005 , HB3007 , HB3008 , HB1590 , HB1242 , HB3818 , HB4305 , HB1979 , HB1225 , HB3931 , HB4454 , HB3849 , HB1746 , HB3720 , HB4275 , HB4300 , HB3586 , HB2268 , HB3755 , HB4117 , HB4294 , HB3650 , HB4298 , HB3270 , HB3145 , HB3056

Keywords: emergency management, severe weather, youth camp, summer camp, overnight camp, day camp, outdoor education, adventure camp, wilderness program, campground safety, tornado preparedness, flooding, flash flood, high winds, hail, lightning, extreme heat, extreme cold, wildfire smoke, evacuation plan

Transcript Highlights:

• Number one, the aggregate amount charged to employer plans for all drugs listed on respective formularies

Committee: House Human Services

Summary: The committee first addressed Senate Bill 2387, which had previously included language expanding the definition of a sexual assault victim advocate to include advocates from organizations serving victims of sexual trafficking or other sexual violence. After concerns were raised that the language could broaden participation in forensic interviews beyond appropriately credentialed organizations, the parties agreed to remove that added language. The committee then reconsidered its prior action, adopted the amendment striking the new language, and passed SB 2387 as amended on a 12-0-1 roll call vote. The bulk of the meeting focused on Representative Nelson’s proposed changes to a 340B-related bill, centered on expanding reporting and transparency requirements. His draft would require hospitals to report how 340B savings are used, and would also add reporting by drug manufacturers, pharmacy benefit managers, and health insurers on rebates, pricing, ownership interests, 340B savings, premiums, claims, and related data. Nelson argued the reporting was needed to give lawmakers better information about how the 340B program affects hospitals, insurers, pharmacies, and public costs, and noted the Department of Corrections also benefits from the program. Testimony was mixed but generally supportive of more transparency. Sanford Health Plan said it needed more time to review carrier impacts and had concerns about employer-related language and rebate reporting. The North Dakota Hospital Association supported hospital transparency and said the broader approach was appropriate because hospitals are only one part of the 340B system. Several members raised procedural concerns about the scope of the proposal and the lack of a drafted LC amendment. The committee decided not to take final action on the 340B proposal that day, instead forming a subcommittee led by Representative Hendricks, with Representatives Dobervich and Bolinske, to work with LC and return with drafted language for further review on Monday.

Transcript Highlights:

• For instance, our pharmacists use an online pharmacy formulary that provides them with the most up-to-date
• are proposing trailer bill language to remove the June 30, 2026 sunset date for the independent placement
• The independent placement panel could thereby expand the availability of state hospital beds for IST
• The independent placement panel largely met its objectives by increasing step-downs to the CONREP continuum
• workforce programs aid the overall behavioral health workforce continuum and allow flexible post-program placement

Summary: The Assembly Budget Subcommittee on Health held a May Revision hearing covering several health-related budget proposals and broader concerns about the state’s budget structure. The Chair opened by praising some May Revision changes, such as added health IT funding, county administration support tied to Medi-Cal changes, a delay in Medi-Cal cuts for some lawfully present immigrants, and additional support for Covered California subsidies, while criticizing proposed increases in Medi-Cal premiums, changes to senior eligibility, the lack of a Medi-Cal dental solution, and other reductions affecting counties, mobile crisis units, workforce incentives, and physician shortages. The Legislative Analyst’s Office said the state’s budget condition remains weak despite progress on the structural deficit, and the Department of Finance said the May Revision uses a mix of reductions, reforms, revenue proposals, and fund shifts to cut out-year deficits. The committee first heard Department of State Hospitals proposals, including adjustments to county bed billing authority, contract exemption language for online clinical/pharmacy subscriptions, reversion of unspent funds, a revised Metro Central Utility Plant replacement project, electronic health record implementation, and workforce development funded partly through Behavioral Health Services Act resources. DSH also described savings and realignments in incompetent-to-stand-trial and conditional release programs, including extending the independent placement panel program and shifting funds to support additional bed capacity and a mental health rehab center. Members asked about the use of BHSA funds for workforce programs, and the department said the proposal would replace General Fund support with BHSA reimbursements. The Emergency Medical Services Authority proposed funding for statewide behavioral health crisis response guidance and for enterprise system development, and the Department of Managed Health Care proposed modernization of its complaint system and claims-settlement data system to improve oversight and comply with AB 3275. The largest discussion centered on the administration’s BHSA spending plan under Proposition 1, including state-directed prevention, workforce, and other uses, plus General Fund offsets for existing programs. The LAO questioned whether some proposed offsets fit Proposition 1’s non-supplant and eligible-use requirements, while the administration argued the uses were consistent with the measure and that the state-directed share can be adjusted annually. The Commission for Behavioral Health’s proposals drew the most public and member concern. The administration proposed cutting the commission’s Innovation Partnership Fund from $20 million to $10 million and reducing the Community Advocacy Program by $6.7 million, while redirecting BHSA dollars to other state purposes and direct services. Commissioners, advocates, and several members argued the cuts would weaken community voice, reduce support for underserved populations, and disrupt grants already in process; they also objected to using BHSA funds to backfill General Fund commitments. Public commenters, including youth, disability, behavioral health, LGBTQ, tribal, veteran, immigrant, and community-based organization representatives, overwhelmingly opposed the cuts and urged preservation of prevention, advocacy, mobile crisis, and innovation funding. No votes or final actions were taken during the hearing.

Transcript Highlights:

• I am asking to put an additional $50 million into the Strong Readers Act formulary.
• I am asking to put an additional $50 million into the Strong Readers Act formulary.

Summary: The committee took up a long agenda of education bills, with several measures passing on bipartisan votes. Early items included SB 1632 on career readiness assessments and college credit pathways, SB 1594 requiring principals to be trained in special education law, SB 2045 establishing 30 minutes of daily recess for younger grades, and SB 1630 allowing districts to count a day of virtual instruction when high school students are taking statewide assessments. Other bills passed addressed school security funds (SB 1251, adding licensed mental health services as an allowable use), teacher association access (SB 1884), library book complaints and penalties (SB 1250), human trafficking survivors’ access to higher education (SB 1262), reduced-price meals moving students into free meal status (SB 1374), high-dosage tutoring for early literacy (SB 1292), and the repeal of the sunset on the Innovative Pathways to Teaching Program (SB 1432). Votes were generally favorable, though SB 1251 and SB 1884 drew the most debate and both passed 8-3, while SB 1250 passed 7-3 and SB 1374 passed 9-1. Several bills generated extended discussion over local control, school safety, and teacher retention. SB 1251 drew concerns that school security funds were being broadened beyond physical security, while supporters argued mental health supports can also improve safety. SB 1884 prompted questions about whether it would open collective bargaining or negotiation meetings to other associations; the author said the intent was to prevent “closed shops” and ensure equal access, while opponents argued equal access already exists and the bill could create confusion. SB 1790, the Protected Learning Environments Act, drew testimony from educator Dr. Elizabeth Pleasant about classroom discipline, teacher burnout, and student behavior; the bill would direct SDE to provide guidance for a three-tier discipline matrix, and it passed 7-2. SB 1481, increasing recess to 40 minutes and prohibiting it as punishment, and SB 1614, limiting adjunct teachers in early grades, also passed after brief discussion. The committee also heard broader policy proposals on federal uncertainty and school leadership. SB 1489 would prepare Oklahoma for a possible federal block grant of IDEA funds, fold some parent-rights and principal-training provisions into state law, and address the cost and backlog of special education dispute resolution; it passed 9-0. SB 1718 proposed an Oklahoma Principal Leadership Development Program for new and early-career principals, with discussion focused on program structure, portability, and stipends. Throughout the meeting, members repeatedly emphasized teacher support, student safety, and the balance between state guidance and local district discretion.

Transcript Highlights:

• The problem here in part is that the rest of the world doesn't use formulary apportionment.
• In the United States, for state purposes, we of course have formulary apportionment, where states can

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:

• The problem here, in part, is that the rest of the world doesn't use formulary apportionment.
• In the United States, we of course, for state purposes, have formulary apportionment where states can