Transcript Highlights:

• Fairly significant if you're trying to balance the budget looking at mandatory spending.
• This is the fast track, and it's supposed to only deal with mandatory spending.
• Should more spending be diverted over?
• Real quickly, on page 3, we talked about the fact that you presented the mandatory spending...
• date to spend that money.

Committee: House Federal Funding Stabilization Subcommittee

Transcript Highlights:

• Again, this is really more of an authorization for our spending.
• Phelps, it is mandatory. I did hear the word allowed, but... So, Rep.
• Phelps, it is mandatory once the system comes live.
• Right, but mandatory for the consumer to use this process?
• Mandatory for the consumer to use this process.

Summary: The committee met on March 30 and first took up House Resolution 1, which approves the Coastal Protection and Restoration Authority’s annual State Integrated Coastal Protection Plan for fiscal years 2026-2027. CPRA leaders described the plan as a roughly $1.54 billion coastal investment, with most funds directed to construction and project implementation. They outlined funding sources including GOMESA, BP settlement dollars, state surplus, and new coastal sediment revenues, and reviewed major work across the coast such as marsh creation, barrier island restoration, levees, pump stations, shoreline protection, and nonstructural flood mitigation. Members asked about specific regional concerns, including the Sabine River area, the Chafalaya Basin, Bayou Sorrel, and tidal flooding in inland parishes. The committee heard public support cards and then reported H.R. 1 favorably without objection. The committee then considered House Bill 838, as substituted, dealing with vehicle inspection stickers and related inspection requirements. The bill would repeal inspection requirements for assembled vehicles, adjust inspection rules for commercial and student transportation vehicles, allow out-of-state inspections in some cases, and move toward a QR-code-based system tied to the vehicle identification number. OMV officials said the QR code would contain only the VIN and would be used by law enforcement through existing or upgraded ticketing systems, with the change taking effect January 1, 2027. Members asked about privacy, local law enforcement compatibility, unsafe vehicles, and the annual fee structure. The committee adopted the substitute and reported the bill favorably via substitute. Next, the committee heard House Bill 888, also with amendments, on temporary dealer plates and temporary registration plates. Supporters said the bill cleans up last session’s temporary tag law, increases security features for print-on-demand plates, clarifies placement rules for dealer tags, extends certain temporary tag periods from five to ten days, and delays fee changes until the electronic issuance system is implemented. A question was raised about whether the new plates would be readable by license plate recognition cameras, and the sponsor said that would be checked with State Police. The committee adopted the amendment set and reported the bill favorably as amended. The committee also advanced House Bill 885, which authorizes electronic titles, electronic lien recordation, and electronic signatures for motor vehicle transactions. The sponsor and industry witnesses said the bill is intended to modernize vehicle sales, reduce duplicate paper signatures, and make the process more secure and efficient, while preserving anti-fraud protections and allowing the OMV to set rules. Members asked whether the process would be mandatory, how fraud would be handled, and how identity would be verified; the sponsor said the system would become mandatory for participating commercial entities once implemented, with security standards and good-faith protections. The committee reported the bill favorably via substitute. Finally, the committee approved House Bill 723, as amended, allowing certain two- and three-wheeled motorcycles and mopeds to proceed through a red light when sensors fail to detect them. The sponsor framed it as a safety measure to avoid riders being stranded at malfunctioning signals and to reduce rear-end collision risk. The committee also took up House Bill 882 on outdoor advertising, which would increase spacing between billboards on state highways from 150 feet to 1,000 feet, with an amendment preserving certain nonconforming signs rebuilt after acts of God. Supporters said the change would reduce billboard clutter and improve aesthetics, while opponents argued it would hurt smaller billboard owners, shift power to larger companies, and override local control. The committee adopted the amendments and continued debate on the bill, with testimony focused on its economic and local-government impacts.

Transcript Highlights:

• </c><00:47:33.280><c> minimums</c> what we've done it's mandatory minimums what we've done it's mandatory
• </c> uh stated that when there's a mandatory uh stated that when there's a mandatory sentence,<01:12:
• </c> would argue that putting mandatory would argue that putting mandatory minimums<01:21:39.120><c>
• 01:26:49.840><c> are</c> rehabilitation, mandatory minimums are rehabilitation, mandatory minimums are
• </c> accountable instead of having to spend accountable instead of having to spend their<01:51:41.360

Committee: Senate Judiciary

Transcript Highlights:

• We're not spending enough time working together.
• We're not spending enough time working together.
• And minimum mandatories, they serve their mandatory sentence before they're parole eligible.
• It's not a minimum mandatory case. It's not an 85% case.
• It's not a minimum mandatory case. It's not an 85% case.

Committee: Joint Judiciary Committee

Summary: The committee opened with a moment of silence honoring a deceased member, then approved the April minutes. The first major presentation was from Chelsea Florey of Child and Family Services on the Diversion Task Force and related grant programs created with one-time funding from HB 1012. She reported that five of six proposals were funded, with youth diversion services operating in Bismarck, Fargo, Grand Forks, Minot, and a Red River Children’s Advocacy Center program focused on problematic sexualized behavior. Members discussed barriers such as staffing shortages, voluntary family engagement, service fatigue, and the need for better coordination, broader outreach, and possible changes to diversion eligibility rules so low-level cases can remain in diversion longer. Several legislators pressed for more practical system changes and clearer service navigation, while Florey said the task force is trying to build a service array or hub and is leaning on the Children’s Cabinet for broader recommendations. The committee then heard from North Dakota Lottery Director Thomas Lawler, who gave an operational overview and biennium report. He described the lottery’s history, games, retailer commissions, Pick and Click subscriptions, Players Club membership, and revenue distribution. For the 2023-25 biennium, about $67 million in tickets were purchased, with roughly $16.2 million transferred overall, including money for the general fund, drug task force grants, and compulsive gambling prevention and treatment. Members asked about the compulsive gambling allocation and whether the amount is set by statute. A lengthy presentation followed from the Department of Corrections and Rehabilitation on criminal justice data connectivity and reentry. Adam Anderson explained that North Dakota’s jail, court, HHS, and correctional systems use multiple separate databases that do not communicate in real time, requiring manual cross-checks and staff communication. He said the department is exploring a centralized hub or other integration approach, but noted challenges with identifiers, vendor contracts, confidentiality, and cost. Robin Schmolenberger then updated the committee on a Medicaid data-sharing project with HHS, saying monthly application assistance is now occurring in correctional facilities and that automated bi-directional data exchange is expected in late 2026 to help suspend and reactivate Medicaid coverage and identify former foster care youth. Members also discussed parole, probation, transitional housing, and the need for better real-time notifications and clearer data definitions. The committee also received an update from county representatives on the 24/7 sobriety program, including a recent attorney general opinion that if a court waives 24/7 fees, sheriffs may use the cheaper twice-daily breath test or urine testing instead of SCRAM bracelets or drug patches. Finally, Bruce Johnson of the Racing Commission presented on an audit report, acknowledging serious findings involving overspending from the promotion fund, grant documentation failures, a breeders fund eligibility reversal, and repeated procurement violations. He said the commission has already changed its procedures by tracking fund limits monthly, requiring grant applications and itemized reports, enforcing breeders fund rules as written, and routing purchases through procurement with written contracts. The committee asked follow-up questions throughout but took no formal votes on these presentations.

Transcript Highlights:

• Others are, and we all know this, more willing to just spend their money on what most of us would not
• This bill is about whether or not we’re going to allow them a 15% increase on tuition and on mandatory
• And on mandatory fees. So I don’t think we can debate the entirety.
• But also this and mandatory fees. Members, but this also this and mandatory fees.
• Reed—is that each university deems what they think mandatory fees are. Is that close? Okay.

Committee: Senate Education

Transcript Highlights:

• Mandatory cameras and vulnerable.
• <01:05:55.680><c> 69.6%</c> spend 69.6% spend 69.6% of<01:05:57.440><c> their</c><01:05:57.599><c> earnings
• It's not mandatory across all daycares. They have the choice.
• It's not mandatory across all daycares. They have the choice.
• </c> It's not mandatory across all daycarees. It's not mandatory across all daycarees.

Committee: House Children and Families Finance and Policy

Transcript Highlights:

• They are all mandatory reporters.
• They are all mandatory reporters. who to make ends meet. They are all mandatory reporters.
• Representative Collins: Well, should you, does it have to be mandatory for them to do their job?
• Mandatory training, you just pass out your paperwork, you talk among yourselves.
• So what's it going to cost to implement it, to make it a state law and make it mandatory?

Committee: House Special Committee on Urban Issues

Transcript Highlights:

• It is my pleasure to present this bill to you, a bill on mandatory fraud reporting.
• Section 5 deals with mandatory reporting on violations of grant processes.
• c><00:04:14.680><c> with</c> this bill section five deals with this bill section five deals with mandatory
• c> reporting</c><00:04:15.959><c> on</c><00:04:16.199><c> violations</c><00:04:16.799><c> of</c> mandatory
• reporting on violations of mandatory reporting on violations of Grant<00:04:17.560><c> processes</c>

Committee: House State Government Finance and Policy

Transcript Highlights:

• It's just very difficult for us to put a confident estimate on revenue gains from enacting mandatory
• And so if we were to move to mandatory worldwide combined reporting, we would have to make assumptions
• The strongest argument against moving for mandatory worldwide reporting?
• So the alternative, subjecting only U.S. multinationals to mandatory Waters Edge, would certainly put
• Mandatory worldwide combined reporting is going to put you somewhat at the mercy of a global economy.

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:

• close to se 67 millon were spending close to se 67 millon billion<00:09:20.839><c> dollars</c><00:09
• on obesity-related spending and, of course, investing in health outside of hospital settings reduces
• </c><00:15:20.800><c> statutory</c> communities with mandatory statutory communities with mandatory statutory
• So what do we spend our budget on in fiscal year 26?
• </c><01:06:44.480><c> our</c> comparison um so what do we spend our comparison um so what do we spend

Committee: House Health Finance and Policy

Transcript Highlights:

• We put contract vehicles in place to buy from, including mandatory state term contracts and optional
• But it doesn't work some spending more money, you know, and I think about the the fleet management that
• So state term contracts are considered mandatory for state agencies.
• Contracts are mandatory in nature. And then optional alternate contracts.
• So for some reason they're not purchasing off that mandatory state term contract.

Transcript Highlights:

• ><c> an</c> Primary care clinicians spend an Primary care clinicians spend an excessive<00:31:20.560>
• </c> In 2020, only 10.2% of medical spending In 2020, only 10.2% of medical spending went<00:31:39.400
• </c> Section four, primary care spending Section four, primary care spending agency<00:38:54.840><c>
• </c><01:15:18.320><c> compliance</c> That there would be mandatory compliance That there would be mandatory
• A mandatory PUC review every rationale.

Transcript Highlights:

• I think judges already spend a lot of time trying to make very difficult decisions.
• And this raising this to 25 years would, this 25 years is not mandatory.
• So your life sentence is a mandatory 30 years. It can't be suspended or deferred.
• It's mandatory. Let me put it this way, But the same amount of time, it's mandatory.
• Died, and that's going to be a mandatory 18 years.

Committee: House House Consumer & Public Affairs

Transcript Highlights:

• I spend many sleepless nights wondering if she had been stopped at any point prior to that horrific night
• One is this will eventually be mandatory.
• If I may, on the mandatory opt-in. This has been in other states.
• If I may, on the mandatory opt-in: this has been in other states since the 1990s.
• Yes, so we're spending a lot of time talking about new things that we're...

Summary: The committee heard several insurance-related bills. AB 69, AB 1554, and AB 1680 all focused on California’s insurance market and the Fair Plan. AB 69 would require clearer notices to Fair Plan policyholders about coverage options, quarterly public reporting on clearinghouse programs, and additional broker/agent training to help depopulate the Fair Plan while preserving consumer choice. AB 1554 would require the California Earthquake Authority to post its annual report online and send it to relevant committees, and would direct the Insurance Commissioner to convene a working group on incorporating hazard mitigation into risk-transfer recommendations. AB 1680 would require the Fair Plan to comply with CDI examination findings, hire more staff, and improve clearinghouse operations; the Fair Plan moved from opposition to neutral after amendments, and the department said the bill would strengthen accountability and consumer protections. These bills were held pending quorum or taken up later, with authors requesting aye votes. AB 2198, by Assemblymember Rodriguez, would clarify title insurance rate-filing rules by specifying that title insurers file title rates and underwritten title companies file escrow rates, reducing duplicative filings and requiring rate schedules to be posted online. The California Land Title Association supported the bill, saying it codified longstanding practice and improved transparency, while the department continued discussions about possible revisions. The bill was left open for further questions and a later vote. AB 1795, by Assemblymember Gibson, would create statewide standards for inspecting, testing, and remediating smoke damage in wildfire-affected homes. The author and the Department of Insurance said the bill would establish science-based standards, protect survivors from unsafe reentry, require training and certification for relevant professionals, and improve claims handling; the department also described serious gaps found in its Fair Plan examination and recent wildfire claims. Insurers and some residents opposed or opposed unless amended, arguing the bill was still too broad, could raise costs, relied too much on industry standards, and left unresolved issues about legal standards, timing, and coverage. The bill remained under discussion, with the author saying negotiations would continue. AB 311, by Assemblymember McKinnor, would create an optional telematics-based auto insurance program to reward safer driving and improve road safety. Supporters, including road-safety advocates, victims’ families, and some insurance representatives, argued telematics could reduce speeding and distracted driving and save lives. Opponents, including privacy and consumer groups, argued the bill would create opaque surveillance pricing, undermine Prop. 103, and raise privacy and fairness concerns. After extensive debate, the committee passed the bill on a 3-0 vote and placed it on call. AB 1798, by Assemblymember Wilson, would bar life and disability insurers from using non-diagnostic genetic information from direct-to-consumer or other predictive genetic testing to deny coverage or raise premiums, while preserving use of medical history and family history and allowing consideration of certain high-value policies above $1.5 million. Supporters said the bill would reduce genetic discrimination and encourage testing; insurers argued genetic information is relevant to underwriting and warned the bill could raise costs and create inconsistencies. The committee chair and members noted the bill was close to agreement but still needed work, and the bill was moved with a 3-0 vote and placed on call.

Transcript Highlights:

• The next slide, slide 10, I'm not going to spend a lot of time on.
• </c> ultimately um we potentially could spend ultimately um we potentially could spend less<01:50:19.000
• You know, that's 31% of our total medical spend.
• You know, that's 31% of our total medical spend.
• </c><02:20:34.479><c> money</c> before we you know start spending money before we you know start spending

Summary: The House Finance Division III held an informational hearing on Medicaid, Medicare, Choices for Independence, and related financing, while postponing nursing facility financing and the county cap discussion to a later date. DHHS officials Ann Landry, Jonathan Ballard, and Medicaid Director Henry Litman provided an overview of Medicaid’s role, noting it is a federal-state partnership with state-specific eligibility and benefits, and emphasizing that Medicaid is a major funding and programmatic support for other DHHS initiatives. They also distinguished Medicaid from Medicare and explained that Medicaid funding is not the same as grant funding, though some providers may also receive federal grants through other channels. The presentation focused on New Hampshire’s relatively small Medicaid program and why it differs from national averages. Officials said about 184,000 residents are covered, roughly one in seven Granite Staters compared with one in five nationally, and attributed the difference largely to the state’s higher per-capita income and older population. They highlighted that about 65% of Medicaid-enrolled adults in New Hampshire are working, that only 22% of births are covered by Medicaid versus 42% nationally, and that the state’s uninsured rate is lower than the national rate. Members asked about covered services, income limits, federal matching rates, and the names of optional eligibility groups; staff explained that New Hampshire offers the optional groups discussed, with matching rates varying by category, including 90% for Granite Advantage and certain other groups, and 65% for children above the required level. A substantial portion of the hearing covered eligibility rules and recent policy changes. Officials reviewed the history of Medicaid, including HCBS waivers, the CFI program, Katie Beckett, the Olmstead decision, the ACA, and the end of continuous enrollment after the public health emergency. They also discussed the 2023 legislative expansion of postpartum coverage from 60 days to 12 months and child eligibility changes. In response to questions, DHHS said it is tracking utilization and costs for the postpartum expansion and reported that many maternal deaths occur after the prior 60-day coverage period, often involving substance use disorder or suicide; they said the longer coverage is intended to improve access to treatment and prevention. The committee also walked through household-income examples, clarified that Medicaid eligibility is based on household income and categorical rules, and confirmed that Granite Advantage ends at 138% of the federal poverty level unless another categorical basis applies. No votes were taken, and the hearing remained informational.

Transcript Highlights:

• Finally, in 2026-27, there's a mandatory withdrawal of $407 million.
• There's a mandatory withdrawal of 407 million.
• We're not recommending austerity for school spending.
• We're not recommending austerity for school spending.
• That's almost certainly going to mean spending reductions.

Summary: The subcommittee opened with remarks on the state budget and K-12 education, noting the large increase in the Proposition 98 minimum guarantee, the use of deferrals and reserves in the prior budget, and the challenge of balancing education funding against other state priorities. Superintendent Tony Thurmond described California education as improving overall, citing gains in test scores, graduation, and college readiness, but said major gaps remain for low-income students, students of color, agricultural communities, English learners, foster youth, and students with disabilities. He praised recent investments in universal meals, transitional kindergarten, community schools, arts, broadband, and special education, while warning that declining enrollment, chronic absenteeism, and the proposed $5.6 billion Prop. 98 settle-up create uncertainty for districts. He also urged a long-term literacy plan, expanded tutoring, universal kindergarten, and continued protections for students and families affected by immigration enforcement, including ICE-related fear and attendance loss. The committee then heard a detailed presentation on Proposition 98 from the Department of Finance and the Legislative Analyst’s Office. Finance explained that the Governor’s budget projects the minimum guarantee will rise by about $21.7 billion over three years, with a $5.6 billion settle-up obligation in 2025-26 intended to avoid overappropriation if revenues weaken. Finance also described revised reserve deposits and withdrawals, ending with about $4.1 billion in the Public School System Stabilization Account by 2026-27. The LAO said recent revenue collections were stronger than expected in the current year but warned that the outlook for 2026-27 is weaker and that stock-market-driven revenues remain volatile. The LAO supported maintaining reserves and one-time spending buffers, but recommended fully funding the guarantee and using other budget solutions rather than shifting the settle-up into future deficits. Members asked about the settle-up process, certification timeline, the effect of attendance declines tied to immigration enforcement, and wildfire-related impacts, including Pasadena Unified’s $4 million special appropriation. On LCFF and necessary small schools, Finance proposed a 2.41% COLA and about $2.2 billion in additional LCFF funding for districts and charters in 2026-27, plus a $30.7 million ongoing increase to raise the necessary small schools allowance by 20%. The LAO supported funding the COLA but said the small-school increase was not tied to a specific cost study and could be redesigned to better target small districts, noting that only a fraction of very small districts would benefit. Questions focused on how small schools access supplemental and concentration grants and how attendance recovery programs are being implemented. The Department of Education said only 130 LEAs had reported attendance recovery so far, likely because it is a new program with compliance requirements, though interest appears to be growing. FICMAT then reviewed the fiscal health of local districts, reporting an uptick in qualified and negative certifications, though still far below Great Recession levels. It said declining enrollment, rising special education costs, and higher labor and insurance costs are the biggest fiscal pressures, and that some districts are using fiscal stabilization plans and staff reductions ahead of second interim reports. FICMAT also discussed wildfire impacts on Pasadena Unified and Los Angeles Unified, explaining that Pasadena’s $4 million state appropriation was based on an early post-fire assessment and that the district is being monitored with the county office of education. Members raised concerns about Pasadena’s leadership, special education staffing shortages, AB 218 sexual abuse litigation costs, insurance premium increases, and the need for stronger prevention and training measures. FICMAT said SB 848 and related policies address some of those concerns by strengthening standards, training, and reporting requirements.

Transcript Highlights:

• 2024 after this bill was introduced that a thousand physicians were surveyed and, um, they spend, um
• , the PAs spend, there's an AMA<00:19:42.559><c> survey</c><00:19:42.880><c> from</c><00:19:43.039><c
• HB 1568, relative to mandatory minimum insurance coverage requirements for motor vehicles.
• </c><03:50:00.319><c> minimum</c> HP 1568, relative to mandatory minimum HP 1568, relative to mandatory
• The coverage is in here, the mandatory policy. >> Yeah.

Committee: House Commerce and Consumer Affairs

Transcript Highlights:

• raised some concerns in regard to the DDA, including their budget, their financial management, and spending
• can bring some of these budget issues in line with the state, the financial management, and the spending
• can bring some of these budget issues in line with the state, the financial management, and the spending
• Mandatory requirements as outlined in statute. Follow-up? Any further questions, Senator Brodeur?
• requirements is outlined in statute mandatory requirements is outlined in statute follow up any further

Summary: The Joint Legislative Auditing Committee met to consider several audit requests and enforcement items related to local government accountability. The committee heard requests for operational audits of the City of Miami Beach, the Delray Beach Downtown Development Authority, and the City of Daytona Beach. In each case, the requesting member cited concerns about transparency, financial management, or compliance with state law. Representatives from Delray Beach DDA testified that an internal audit had already been completed, that findings were limited, and that they were working to cure issues such as procurement, credit card, and disbursement policies; the DDA chair also said the organization was willing to cooperate and was considering transitioning out of operating Old School Square. For Daytona Beach, the sponsor pointed to excess building permit revenues, vehicle purchases, and reported P-card irregularities as reasons for a broader audit. The committee approved all three audit requests, directing the Auditor General to finalize the scope while considering the stated concerns. The committee also received a presentation on the statewide performance reviews of 21 neighborhood improvement districts. The reviewers reported that 15 districts were active and six inactive, with common issues including outdated or missing performance plans, weak web presence, inadequate meeting notices, and limited management mechanisms. They said staffing levels often correlated with the ability to meet statutory requirements, and recommended that several districts be reviewed to determine whether they were still needed. Members asked about staffing, inactivity criteria, and how the districts were administered, and staff explained that city or county liaisons often supplement district staffing. Later, staff reviewed enforcement actions for local governments that failed to file required financial reports or omitted required information from submitted audits. The committee discussed a list of noncompliant counties, municipalities, and special districts, including the town of Rayford, which staff said had long-standing reporting problems, no apparent municipal services, and no response to repeated outreach. The committee voted to send a letter to the Union County legislative delegation encouraging a local bill to dissolve Rayford. It also approved staff recommendations to proceed against entities still missing required filings or missing audit information, with authority for the chair and vice chair to delay action if additional information is later provided in good faith.

Transcript Highlights:

• We know that mandatory minimum prison sentences do not work.
• However, I think that before the state spends, or the city or county or anybody spends, billions of dollars
• that there are numerous safety mechanisms to stop this if it goes the wrong way, so that before we spend
• Before we spend billions of dollars, we can at least know what we're going into and have information
• elected officials to evaluate what the options are, to have this broad brush that they approved spending

Transcript Highlights:

• I forget if we're going to move to make it mandatory.
• I forget if we're going to move to make it mandatory.
• Um going to move to make it mandatory.
• And so we are still spending $80 million a year. It goes up.
• And so we are still spending $80 million a year. It goes up.

Summary: The committee heard House File 2499, authored by Representative Lee, which would expand Minnesota’s renters’ credit to more closely match the homestead credit for homeowners. Lee explained that the bill would raise the income cutoff from about $75,389 to $143,140 and increase the maximum credit to $3,500, with the goal of addressing what she described as an inequity between renters and homeowners who both pay property taxes. She cited revenue estimates showing the change could make about 80,000 additional renters eligible, while acknowledging the bill would be costly to enact this year. Nan Madden of the Minnesota Budget Project testified in support, describing how the renters’ credit works, including the assumption that 17% of rent goes toward property taxes. She highlighted 2022 data showing most recipients had low incomes, many were seniors or people with disabilities, and participation was higher in greater Minnesota in some respects. Michael Dah of Homeline also supported the bill, saying renters face rising housing costs and use the credit for basic needs such as groceries, school supplies, medical care, and car repairs. Members discussed whether expanding the credit would simply benefit landlords or encourage rent increases. Representative Anderson opposed the bill on the grounds that policy should incentivize homeownership, while Representative Huitt argued the credit could help renters build savings and move toward homeownership if they choose. Representative Lee responded that the housing market is broken and that the credit is one tool to help renters in a broader housing continuum. The discussion also covered outreach and administration of the credit, including the recent move to file it with income taxes, electronic certificates of rent paid, and funding for tax-preparation assistance and outreach through VITA sites and community organizations. The bill was laid over for possible inclusion in the omnibus tax bill.