Transcript Highlights:

• It is already generating economic activity.
• They can generate revenue, and they're always profitable.
• They have gate fees for airlines that they use for generating revenue.
• They are generating over 160% to 170% of their operational costs.
• And that's, again, value capture in terms of revenue generation.

Summary: The Senate Transportation Committee held an informational hearing on the California High-Speed Rail Authority’s 2026 draft business plan and next steps for the project. Chair Cortese opened by noting major changes since the 2024 plan, including new leadership, a bottoms-up review, scope changes in the Central Valley, loss of federal funds, and renewed interest in private investment and value capture. The Authority’s CEO, Ian Chaudhary, presented the project as moving into a construction and track-laying phase, citing progress on Central Valley structures, right-of-way acquisition, utility relocations, and a new procurement for track and systems. He said the plan reflects a more disciplined, optimized approach, with the Merced-to-Bakersfield segment targeted for revenue service around 2033 and the broader Phase 1 corridor envisioned as commercially viable through ancillary revenues, public-private partnerships, and future private financing. Committee members questioned the Authority about station relocations, single-tracking, tax increment financing, utility relocation authority, transparency, and the feasibility of private financing. Chaudhary said the Merced and Bakersfield station locations were still under discussion with local governments and that no contracts had been finalized. He defended the reduced scope and single-track approach as a just-in-time strategy to avoid overbuilding, while maintaining high-speed standards. He also said the Authority was exploring land value capture, broadband, energy, and other corridor-based revenue sources, but acknowledged that some tools would require legislative action and that private financing options were still being evaluated. Several senators expressed support for the project but raised concerns about permitting delays, local opposition, constitutional and statutory limits, and the need for stronger accountability. The Legislative Analyst’s Office and the High-Speed Rail Inspector General then gave critical assessments of the draft plan. LAO staff said the plan assumes major statutory changes, understates risk, lacks transparency about scope changes, and may not fully fund even the smaller Merced-to-Bakersfield segment once borrowing costs and other uncertainties are considered. Inspector General Ben Belknap said the draft plan does not comply with newer statutory requirements in SB 198 and AB 377, citing three main deficiencies: unauthorized scope changes to the Merced-to-Bakersfield segment, an inadequate funding plan that omits financing costs, and missing procurement milestone dates. He said the Authority’s presentation obscures the true cost and schedule impacts of the project changes, and that incomplete reporting limits legislative oversight. The Authority responded that it would address the OIG’s findings in the final business plan, and committee members indicated they expected a written response on compliance issues.

Transcript Highlights:

• It includes general fund reserves of $23 billion.
• Generally, we understand that there is...
• General Fund money... ...all General Fund spending for labor and workforce development, all legislative
• , all General Fund money for transportation, and all General Fund money for UC and CSU, we would still
• Did that take the place of general fund funding for those projects?

Summary: The Senate Budget and Fiscal Review Committee heard opening remarks on the Governor’s 2026-27 budget, which the chair described as roughly balanced in the budget year but still facing large out-year structural deficits. The vice chair criticized the revenue assumptions as overly optimistic and stressed the need to review recent program expansions and address the state’s $20 billion federal unemployment insurance debt. The Department of Finance said the budget is a “workload” plan with about $350 billion in total spending, $23 billion in reserves, a projected $2.9 billion budget-year deficit, and out-year gaps above $20 billion, while the LAO warned of downside revenue risk tied to stock market volatility and urged earlier action on the structural deficit rather than waiting for May. Finance and the LAO discussed major budget components, including Proposition 98 funding, higher education base increases for UC and CSU, climate and wildfire spending, a new ZEV incentive, child care COLAs, and tax proposals involving marketplace facilitators, renewable aviation fuel, and an extension of the California Competes tax credit. Members raised concerns about proposed Medi-Cal and CalFresh changes tied to federal HR1 impacts, the MCO tax extension, hospital finances, county costs, and the decision not to backfill all federal funding losses. Finance said the administration is not in a position to replace all lost federal funds, but wants to work with the Legislature on priorities and timing before the May Revision. Several senators used the hearing to preview subcommittee priorities and request more detail on spending growth, reserves, and program cuts. Topics included homelessness funding, Care Court throughput, wildfire and climate investments, AB 617, data centers, the judicial branch’s facilities backlog, displaced workers, transit funding, and preparations for the 2028 Olympics and Paralympics. No budget action or vote was taken at this hearing; the committee mainly received presentations and member questions, with public comment scheduled later.

Transcript Highlights:

• On this one, the administration and our office are both in general agreement.
• Are you talking specific to transit or in general? All of the discretionary funding.
• What is generally Other? Because that seems like a lot of money that we are now losing.
• I would say yes, just generally.
• I have one general question in the bulk of my questions.

Summary: The Assembly Budget Committee opened its hearing on the Governor’s 2026-27 budget with remarks emphasizing the start of a months-long process, the need for fiscal responsibility, and concerns about structural deficits, federal funding losses, housing and homelessness, and oversight. The vice chair echoed those concerns, warning against budgets built on short-term fixes and urging accountability. The Department of Finance presented a balanced budget year proposal of about $349 billion in total expenditures, including $248 billion General Fund, while acknowledging a structural imbalance in the out years and proposing a workload budget with limited new spending or cuts. Finance said the budget relies on stronger-than-expected revenues, but also on constitutional obligations such as Proposition 98 and Proposition 2, and on suspending a rainy-day fund true-up deposit to cover a projected $2.9 billion budget-year deficit. The administration highlighted higher education funding, climate and wildfire resilience investments, a new ZEV incentive, added Health and Human Services costs tied to H.R. 1, child care funding, and three tax proposals: third-party delivery tax compliance, a sustainable aviation fuel tax credit, and an extension of the California Competes tax credit. The LAO, by contrast, warned that the budget is “precariously balanced,” cited downside risk from stock market-driven revenues, and urged the Legislature to use reserves, avoid suspending rainy-day deposits, and begin shrinking multi-year deficits sooner rather than later. Member questions focused on wildfire mitigation and insurance, transit and GGRF funding, federal cuts affecting CalFresh and Medi-Cal, the proposed tax credits, homelessness accountability language, and education funding. Several members pressed for earlier partnership on deficit solutions and for more scrutiny of budget choices. The committee also discussed declining enrollment in K-12, community colleges, and CSU, with concerns about whether funding formulas are aligned with actual student demand. No formal votes or final actions were taken in the hearing.

Transcript Highlights:

• I would have to defer again to the attorney general for that.
• Well, I'll definitely follow up with the attorney general and the governor.
• I'd have to defer to the attorney general, but I can follow up.
• And again, I can't speak to the legal aspects, but I can definitely have the attorney general prepare
• </c><00:07:14.800><c> for</c> folks would be the attorney general for folks would be the attorney general

Keywords: 912, senate, all

Summary: The committee first took up a series of House bills in decision-making. HB 309 was recommended to pass with amendments deferring the effective date to 2050 and was adopted unanimously by members present, with one member excused. HB 344 was recommended to pass with amendments changing the EV charger-ready parking stall requirement from a fixed 25% to a standard allowing the Department of Accounting and General Services to determine the number needed in a new facility; that recommendation was adopted. HB 423, HB 833, HB 987, and HB 988 were each recommended to pass unamended and were adopted without objection. HB 596 was recommended to pass with amendments deferring the effective date to 2050 and adding the Department of Defense’s concerns and testimony to the committee report. HB 750 was passed unamended because of the filing deadline, with concerns to be noted in the committee report for conference committee review. HB 1161 was also passed unamended, with the committee report to reflect requested Department of Transportation amendments. HB 1483 was recommended to pass unamended, with the chair voting no with reservation on that measure. The meeting then shifted to a separate agenda item involving the governor’s office and a proposed settlement related to Lahaina. Members questioned why the legislature had not been kept informed during negotiations and expressed concern that the committee was being asked to approve the settlement without meaningful ability to amend it. The governor’s representative said the administration would defer legal questions to the attorney general, but stated that amendments could jeopardize the legal agreement and potentially have significant impacts on the state. Members also raised concerns about transparency, the public nature of the process, and uncertainty over how Hawaiian Electric would cover its share of the judgment. In response, the governor’s office said it would follow up with the attorney general and governor and provide answers directly. The chair then moved to reconsider the prior action and recommended passing the settlement measure with the attorney general’s suggested amendments removing language from page 7, lines 3 to 17, while preserving prior committee-report concerns. That reconsidered recommendation was adopted by the committee.

Transcript Highlights:

• Generally The California Office of the Small Business Advocate, also known as CalOSBA, is generally,
• You know, the program is generally well designed, as we've testified in recent years.
• At the local level, the general plan guides long-range land use planning.
• I... any sense at all to be increasing general fund spending, frankly, for anything.
• It is worth underscoring that these credits are not current General Fund obligations.

Keywords: 987, senate, all

Transcript Highlights:

• The estimated savings in the budget year are $331.8 million General Fund.
• And as those revenues have gone down, we're backfilled by General Fund.
• For general support of the Medi-Cal program, the amount is $2 billion.
• Funded by the biggest cuts to health care in a generation.
• serve as a general fund backfill.

Summary: The subcommittee heard a lengthy Department of Health Care Services presentation on the governor’s Medi-Cal budget, including a $229.1 billion total-funds proposal, projected Medi-Cal enrollment declines as redeterminations continue, and several major cost drivers such as managed care growth, Medicare-related costs, pharmacy spending, and changes tied to federal policy. Members focused heavily on the elimination of Prop. 56 dental supplemental payments beginning July 1, 2026, questioning the likely impact on provider participation and utilization. DHCS said it is completing the required rate reduction/access analysis for CMS, has been holding stakeholder meetings and issuing provider bulletins, but could not yet quantify the real-world effect. The committee also discussed a $50 million savings proposal tied to new hospice utilization management authority and asked about possible effects on emergency dental care and provider participation. The hearing then moved through the November 2025 family health estimate and several county and program administration issues, including CCS, GHPP, and Every Woman Counts. DHCS said family health costs are rising despite slight caseload declines because of higher utilization and medical costs, and members raised concerns about CCS website accessibility, county administrative funding, and the transition of youth aging out of CCS. The department said most CCS beneficiaries are also on Medi-Cal, that counties have long raised funding concerns, and that it had clarified use of maintenance-and-operations dollars to address some county workload issues. Members also asked about Every Woman Counts potentially seeing higher demand as Medi-Cal changes take effect; DHCS said that is possible and that the program has multiple funding sources including General Fund. A major portion of the hearing focused on provider taxes and federal changes under H.R. 1, especially the Medi-Cal managed care organization tax and the hospital quality assurance fee. DHCS explained that H.R. 1 restricts new or increased health care-related taxes, phases down allowable tax levels over time, and tightens “generally redistributive” rules, which could sharply reduce the state’s ability to use the MCO tax for Medi-Cal financing. Members asked whether the Legislature could amend Prop. 35 or whether voters would need to act; DHCS said a three-fourths legislative amendment may be possible if it aligns with the measure’s purpose, but the department is still evaluating options. The committee also discussed hospital financing, with DHCS describing recent increases in state-directed payments and the effect of H.R. 1 in capping those payments at Medicare levels, and the LAO noting the tradeoff between preserving provider taxes and maintaining Medi-Cal funding. The subcommittee also reviewed a series of DHCS budget change proposals and trailer bill items, including managed care final-rule implementation, managed care operations, a hospital value strategy, a one-year extension of skilled nursing facility financing, long-term care payment transparency, and interoperability/prior authorization requirements. Members repeatedly questioned the use of limited-term versus permanent positions, the overlap among proposals, and the timing of new financing reforms. DHCS said the SNF extension would preserve current workforce standards, sanctions, growth limits, and the SNF quality assurance fee while the department develops a broader 2027-28 redesign. No votes were taken; items were repeatedly held open for later action. Covered California then presented on the expiration of the federal enhanced premium tax credit and the resulting affordability crisis. The agency said Californians will lose about $2.5 billion in premium assistance for 2026, average premiums could nearly double for many enrollees, and as many as 400,000 people could eventually leave marketplace coverage. Open enrollment ended with 1.9 million sign-ups, down 3% from the prior year, with especially steep declines among middle-income consumers and increased movement into bronze plans. Covered California said the state’s $190 million affordability subsidy is helping lower-income enrollees retain coverage, but cannot fully replace the lost federal assistance. Members also asked about the Health Care Affordability Reserve Fund, repayment of loans from that fund, the status of federal review of California’s essential health benefits benchmark, and implementation of the new gender-affirming care benefit under AB 144.

Transcript Highlights:

• revenue, uh, from the general revenue Fund, and 24% or 819,000 from the general revenue dedicated Water
• a general term, what does self-leveling mean?
• Additionally, the program does generate $800,000 in fees each biennium to the credit of the General Revenue
• Y'all were generous enough to give it, give to us.
• Uh, to general revenue on $9.4 million in appropriated funds.

Transcript Highlights:

• I am a third-generation miner, second-generation steel worker, been working in mining for 28 and a half
• I’m a fourth-generation farmer as well.
• </c> predecessor uh I am a third generation predecessor uh I am a third generation Miner<00:01:25.479
• > Miner second generation steel worker Miner second generation steel worker been<00:01:27.680><c> working
• </c><00:01:56.600><c> have</c> community and multiple Generations have community and multiple Generations

Keywords: 1183, house

Transcript Highlights:

• :32:44.720><c> the</c><00:32:44.960><c> initial</c> general consultant, provided the initial general
• So that was the general range.
• So that was the general range.
• So that was the general range.
• </c> of the fund in future generations. of the fund in future generations.

Bills: HF3900

Keywords: permanent school fund, school endowment fund, Minnesota constitutional amendment, school aid, public school funding, State Board of Investment, investment income, distributable amount, school districts, property taxes, income taxes, voter approval, ballot question, constitutional amendment 2026, education finance, fund perpetuity, purchasing power, trust lands, swamp lands, internal improvement land fund

Transcript Highlights:

• Lower-cost alternatives, like generics and biosimilars, offer the same safety and efficacy, Like generics
• And I also just want to remind people that right now that happens with generics.
• And so the concern of side effects, low, same thing with generics as well.
• Similar to the scenarios that you have with your generic medication. Okay.
• Generic equivalent of that drug. Now, presumably, physicians know this.

Summary: The Senate Business, Professions and Economic Development Committee heard SB 1094 by Senator Weber Pearson, which would expand pharmacist and health plan authority to substitute biosimilars for reference biologic drugs in order to lower prescription drug costs. The author and supporters, including Blue Shield of California, Sharp HealthCare, and several business and health groups, argued that biologics are a major driver of rising health care spending and that biosimilars can provide substantial savings while maintaining safety and efficacy. The bill also included transparency provisions and committee amendments, including notice requirements and clarifications around substitution and exceptions. Opposition came from the Biotechnology Innovation Organization, the California Rheumatology Alliance, and Biocom, who said the bill was not scientifically justified, could undermine FDA standards, and might lead to unwanted switching, side effects, or delays in care for patients with chronic conditions. They emphasized that pharmacists can already substitute interchangeable biosimilars and that non-interchangeable products can be changed with prescriber contact. Committee discussion focused on patient safety, the meaning of “do not substitute,” the 30-day notice provisions, and the distinction between biosimilars and interchangeable biosimilars. After debate, the committee adopted a due pass as amended motion to the Senate Health Committee. The bill passed the committee on a 10-0 roll call vote and was sent onward.

Transcript Highlights:

• general fund dollars in 5.15 million general fund dollars in FY28.
• &gt;&gt; General<01:24:53.840><c> Todd.</c> &gt;&gt; General Todd. &gt;&gt; General Todd.
• General<01:42:38.159><c> from</c><01:42:38.320><c> Todd.</c> General from Todd. General from Todd.
• &gt;&gt; General<02:03:07.199><c> Todd,</c> &gt;&gt; General Todd, &gt;&gt; General Todd, I'm<02:03:11.360
• . generations. generations.

Keywords: Several minutes after the convene vote and before the introduction failed to properly steam. This version was pulled from a local back up., 958, all

Summary: The House convened with 97 members present, declared a quorum, approved excusing absent members, and suspended the rules to allow co-sponsorships and vote modifications. The journal for February 25, 2026 was approved. The clerk also reported that the Senate had passed Senate Bills 98 and 122 and requested concurrence. The House then received second-reading reports on a range of bills, including measures on prison educational programs, respiratory care, dietitians, wildlife depredation, temporary structures, military families, civil rights, local boards of education, light pollution, controlled-substance prescribing licenses, youth health services, class sizes for exceptional children, the athletic trainer compact, limited commercial driver’s licenses, and Senate Bill 145 relating to the Department of Agriculture and Alcohol Beverage Control. Committee reports moved several bills forward, including the main budget bills House Bill 500 and House Bill 504, along with measures on workforce investment, data centers, domestic violence, guardians ad litem, domestic relations, health delivery and “food is medicine” initiatives, state personnel, open records, and fish and wildlife resources. House Bill 500 and House Bill 504 were taken from the Rules Committee and placed on the orders of the day. House Bill 500, the executive branch budget bill, was then taken up for third reading and explanation. Members presented extensive floor explanations of House Bill 500 and House Committee Substitute 1, describing it as a “good first draft” of the executive budget. Supporters said the proposal emphasizes restrained spending growth, base reductions with exemptions for key areas, employee salary increments, and deposits to the Budget Reserve Trust Fund for future one-time investments. They highlighted funding for K-12 education, postsecondary aid and workforce training, Medicaid and behavioral health, public health infrastructure, pensions, veterans, public safety, economic development, tourism, and state technology and facility maintenance. The budget substitute was adopted by voice vote, and the discussion continued with detailed descriptions of the bill’s provisions; no final passage vote was shown in the excerpt.

Transcript Highlights:

• generally for the bill author um will we generally for the bill author um will we have<00:01:28.119><
• </c><00:15:16.240><c> money</c> afford it to make it generating money afford it to make it generating
• </c> to a carbon- free electric generation to a carbon- free electric generation sector<00:48:00.680>
• <01:14:20.040><c> our</c> generally our generally our mission<01:14:22.880><c> we</c><01:14:23.000><c
• </c><01:14:44.040><c> and</c> who live nearby energy generation and who live nearby energy generation

Keywords: 1183, house

Transcript Highlights:

• Madam Attorney General, good afternoon. All yours, Madam Attorney General. Thank you so much.
• I am proud to be your Attorney General.
• Thank you, Madam General. Thank you. Thank you. Thank you, Madam General.
• Inspector General. Good afternoon, Mr. Inspector General. You're welcome. Thank you.
• Any further questions for the Inspector General?

Keywords: 995, all

Summary: The joint budget hearing opened the FY27 budget process with remarks from the Senate and House Ways and Means chairs, who described the fiscal outlook as challenging because of slow revenue growth, rising health care and other costs, and uncertainty from federal policy changes. Governor Healey and Secretary of Administration and Finance Matthew Gorzkowicz then presented House 2, a $62.8 billion budget that they said grows by about 1% and does not raise taxes or fees. They emphasized affordability, fiscal discipline, protection of core services, and continued investment in education, transportation, housing, child care, health care, and public safety. The administration also discussed a separate bill to delay and phase in certain federal tax-code changes from the so-called OB3 law, especially research and experimental expense provisions, to reduce immediate budget impacts and preserve competitiveness. A major portion of the hearing focused on education and municipal aid. The administration said House 2 provides about $7.6 billion for Chapter 70 aid, fully funds the final year of the Student Opportunity Act, increases special education circuit breaker funding, and raises rural school aid. Senators and representatives from both parties raised concerns that Chapter 70 and other aid formulas are not equitable for small, rural, and low-wealth communities and are not keeping pace with inflation, and several called for broader review of the formula and related funding streams. The governor and secretary said they are open to further discussion, pointed to additional support through rural aid, special education, transportation reimbursements, and minimum aid, and said total Student Opportunity Act investment would reach about $2.1 billion over the life of the law. Transportation, housing, and fair share spending were also central topics. The administration said fair share revenues are being used holistically, with education-heavy spending in the operating budget and transportation-heavy spending in the supplemental budget, and estimated the overall split to date at roughly 57% education and 43% transportation. They highlighted MBTA stabilization, regional transit authority support, microtransit, fare-free regional transit, and bridge and commuter rail investments, while noting the MBTA remains a major fiscal concern. On housing, the governor stressed production, permitting reform, ADUs, down-payment assistance, and support for public housing authorities, while lawmakers pressed for more funding for local housing authorities and for ways to address out-migration, energy costs, and affordability. The governor also said the administration will not withhold fire safety grants from communities over MBTA Communities Act noncompliance and will handle such issues case by case. No votes were taken at the hearing; it was an informational presentation and question-and-answer session.

Transcript Highlights:

• fund in 25-26 and growing to $500 million general fund savings in 28-29.
• It's a reduction of $42.7 million general fund in 2025-2026 and ongoing.
• But at this time, the full 21.1 million is scored. it as a general fund.
• We think it's a realistic contribution to the general fund solution.
• It's a 3.3 million dollar general fund in year one and 3.1 ongoing.

Keywords: 988, house, all

Transcript Highlights:

• General said.
• </c> raise what the Attorney General said. raise what the Attorney General said.
• </c> general election. general election. Mhm. Mhm. Mhm.
• That's general fund money.
• That's general fund money. 600,000? That's general fund money.

Bills: SB1

Keywords: special primary election, redistricting, State Senate districts, federal court ruling, injunction, vacated order, election calendar, 2026 general election, 2026 primary election, runoff election, party nominee, Governor proclamation, Alabama elections, district boundaries, court-ordered redistricting, special election, nomination process, Secretary of State, election law, 923

Transcript Highlights:

• These general reductions, this is not directed at CDFA.
• That's general funding. The coordination piece.
• But in general we... ...and there's been a lot of variability in the total sales amounts, but in general
• of the illicit market in general.
• It seems like generally enforcement in this area...

Summary: The subcommittee heard a series of budget presentations from the Department of Food and Agriculture (CDFA), the Department of Cannabis Control (DCC), and related agencies. CDFA discussed its overall budget, ongoing support for the Farm to School program and climate-smart agriculture, and a proposed climate bond expenditure plan. Members focused heavily on whether the Farm to School proposal should become ongoing, how schools and suppliers are selected, whether the program is reaching disadvantaged and food-insecure communities, and whether the trailer bill language creates new duties. The LAO recommended rejecting the ongoing Farm to School proposal as presented, suggesting the Legislature consider Prop. 98 funding instead, while CDFA argued the program supports children, farmers, and local economies and helps build long-term supply-chain infrastructure. Several members also questioned the bond plan’s timing, program metrics, and workforce impacts, while LAO said the bond plan was generally reasonable and should be guided by legislative input. The committee also discussed CDFA’s proposal to eliminate vacant positions; the department said the positions were largely long-vacant or unfunded and could be reclassified if needed, while LAO recommended retaining the special-fund positions and weighing the General Fund positions on their merits. CDFA’s IT support request for additional ongoing funding and four positions was presented as necessary to address staffing shortages, legacy systems, and cybersecurity risks, and LAO had no concerns. The committee then took public comment and voted to approve items 9 through 13, including CDFA dog importation and carcass disposal items, a Gambling Control Commission IT item and tribal grant fund item, and an ABC office relocation item. DCC presented a request to strengthen enforcement against the illicit cannabis market by opening a North State office in Redding and adding sworn and non-sworn staff. The department said most cannabis consumed in California still comes from the illicit market, that it receives about 1,500 complaints annually but can close only about 400 cases, and that it has a backlog of roughly 4,000 cases. DCC argued that a northern office would reduce travel time, improve coordination with local agencies, and help target cross-county and cross-border criminal networks. Finance supported the request as a targeted investment, and LAO had no comment. Members asked about public safety, office security, and whether a North State presence would increase complaints or referrals; DCC said safety is considered in every office opening and that a local presence would likely improve case development. The director also described the broader regulatory strategy as balancing consumer safety, illicit-market enforcement, consumer awareness, and reducing friction for legal operators. The discussion continued into broader concerns about the size of the illicit market and the long-term goals for the cannabis program.

Transcript Highlights:

• One is the General Fund dollars, and that's the piece I was referring to.
• Absent that, that would revert to the General Fund.
• I'm here on behalf of Generate Power Systems and EcoB Smart Thermostats.
• My name is Evan Polisar, here for General Atomics.
• My name is Evan Polisar here for General Atomics.

Summary: The Senate Budget Subcommittee No. 2 on Resources, Environmental Protection and Energy heard presentations on six budget-related issues and took no votes; all items were held open for a future hearing. The first item concerned funding for the California Transmission Accelerator Revolving Fund under SB 254 and Proposition 4. GoBiz and IBank requested nearly $26 million over five years and 10 limited-term positions to evaluate and finance eligible transmission projects. The LAO said the proposal was broadly consistent with Prop. 4 but noted many implementation details remain unresolved. Senators questioned how the program would lower ratepayer costs, how funds would be protected, and whether the full requested amount was necessary; the administration said the financing strategy is still being developed and that consultants are needed. The committee then discussed trailer bill language to redirect $22 million in General Fund money from the DEPA program to DSGS for summer 2026, and to use roughly $70 million in CalSHAPE interest for ratepayer relief through ELRP or an equivalent program in 2027-28. CEC and CPUC staff said DSGS and ELRP are reliability tools, not PSPS programs, and explained that DSGS had enrolled over 1,000 MW and was expected to have about $52 million available for 2026. Senators and the LAO raised concerns about ending a successful DSGS program, the complexity of transitioning customers to ELRP, and whether CalSHAPE funds should instead continue school HVAC and plumbing projects. Public commenters largely supported extending CalSHAPE and continuing or expanding DSGS rather than shifting funds to ELRP. The subcommittee also heard on petroleum market oversight under SBX1-2 and ABX2-1. The CEC and its Division of Petroleum Market Oversight requested about $1.67 million and a small permanent staffing increase to implement new inventory, resupply, and market analysis duties. Senators pressed the agencies on gasoline price spikes, refinery maintenance, price gouging, and the status of the transportation fuels transition plan, which staff said would be released in draft form soon. Public testimony supported DPMO’s work and called for continued oversight of gasoline pricing. Finally, the CPUC presented three additional budget proposals: resources to implement AB 1207’s changes to the California climate credit, funding for a study of large electrical loads such as data centers under SB 57, and staffing for AB 825’s regional market participation requirements. The LAO said the AB 1207 request may go beyond the statute and urged the Legislature to decide whether it wants a simpler or more complex climate credit redesign. Senators questioned the cost of the work, the need for ongoing staffing, and how ratepayer interests would be protected. The CPUC said the work is needed to adapt to changing load patterns, electrification, data center growth, and potential regional market participation. Public commenters also supported DPMO funding, CalSHAPE, and DSGS, and some urged the Legislature to keep DSGS at the CEC rather than shift funds to ELRP.

Transcript Highlights:

• Now, we've already heard that it's going to initially generate revenue for the general fund, and then
• So bottom line, this bill generates revenue.
• We're going to be backfilling through the general fund.
• We're going to be backfilling through the general fund.
• Those are costs we must pass on to the state general fund in 2025.

Summary: The committee heard briefings, sponsor presentations, and public testimony on several finance bills. HB 2038 would impose an additional B&O tax on businesses operating social media platforms beginning in 2027 and create a youth behavioral health account funded by the tax. The sponsor argued the bill would help address youth mental health harms linked to social media and support implementation of the Washington Thriving plan. Supporters in testimony, including youth advocates and some public health voices, said social media contributes to youth anxiety and addiction and that the revenue should be used for behavioral health services. Opponents, including technology and business groups, argued the tax unfairly singles out one sector, could be passed on to consumers, and may violate federal internet tax law. The hearing on HB 2038 was suspended and later reopened for public testimony; no vote was taken. HB 2297 would create tax incentives for grocery stores in underserved communities, including local B&O preferences, a sales tax exemption for security services, a 30-year property tax exemption program, a B&O tax credit, and a B&O exemption for certain locally owned or employee-owned stores. The sponsor and supporters said the bill is intended to preserve and attract grocery stores in food deserts, especially after recent store closures, and to help communities with limited transportation and access to healthy food. County representatives supported the goal but raised concern about the bill’s sales tax exemption and its effect on local revenues. Public testimony was largely supportive, with advocates, local officials, grocers, and residents describing grocery stores as essential community infrastructure. No action was taken. HB 2382 would raise cigarette taxes by $2 per pack, restructure vapor and other tobacco product taxes, and dedicate portions of the revenue to a time-sensitive emergency system, tobacco enforcement, and the foundational public health services account. The sponsor said the bill would generate needed revenue, support cancer research funding, and strengthen public health and enforcement. Supporters said higher tobacco taxes reduce use and help cover long-term health costs, while some public health witnesses supported the revenue but suggested directing more funds to existing tobacco prevention accounts. Opponents from retail and industry groups argued the proposal is regressive, could increase illicit sales and cross-border purchasing, and would hurt small businesses and low-income consumers. The committee also heard HB 2487, a Department of Revenue request bill that would narrow the B&O exemption for insurers to clarify that it applies only to premium income subject to insurance premium tax, and apply the change retroactively to 2019. The sponsor and supporters said the bill closes a loophole created by a recent Supreme Court ruling and preserves tax equity, while insurers and business groups objected to the retroactive application, warning of higher premiums and unfair taxation. Finally, HB 2018 would increase the solid waste tax by 0.5% per year for five years and direct the new revenue to a local government solid waste assistance account for county and city waste management plans. County officials supported the bill as a way to stabilize funding for solid waste systems, and testimony emphasized rising disposal and infrastructure costs. No votes were taken on any of the bills during the hearing.

Transcript Highlights:

• I'm a third-generation grape grower. But what it is is... I'm a third-generation grape grower.
• Many of these companies have remained family-owned for generations.
• Many of these companies have remained family-owned for generations.
• This work is funded by a combination of fees and general fund state.
• This work is funded by a combination of fees and general fund state.

Bills: SB5816, SB5971

Keywords: juice grapes, agriculture, commerce, state regulation, market access, green fertilizer, low-carbon, sustainability, incentive program, 904, all

Transcript Highlights:

• So on this first slide, if you could move the slide, under the April 4 sector, the general fund revenue
• Growth generally revised up.
• So what I don't think is having much of an impact so far is this so-called generative AI.
• Overall, generally, for the U.S. economy...
• And speaking of just general... In this process.

Keywords: 1182, all

Summary: At the April meeting of the Finance Advisory Committee, staff presented an updated state revenue forecast that was more cautious than January’s because of heightened economic uncertainty tied to the Iran conflict and broader national risks. The general fund’s available resources were revised down from $577 million in January to $378 million in the April forecast, with the lower estimate driven by reduced revenue projections while spending assumptions were unchanged. Staff said the outlook depends heavily on how long the Middle East conflict lasts and noted that a prolonged disruption could weaken the forecast further, while a quick resolution could improve conditions. George Hammond of the University of Arizona gave a broad economic overview, highlighting geopolitical risk, elevated oil and gasoline prices, sticky inflation, weak Arizona job growth, and uncertainty around federal policy, tariffs, immigration, and AI-related investment. He said Arizona’s recent job growth has been very weak and concentrated mainly in health services, while most other sectors lost jobs, and he attributed much of the slowdown to low hiring rather than layoffs. He also discussed population growth, noting that Arizona remains above the national average but is increasingly dependent on net migration as natural increase slows, and he warned that housing affordability remains strained even as Phoenix inflation has moderated. Panelists generally echoed the cautious outlook but pointed to some offsets. Liz St. Clair said Arizona’s near-term revenues could benefit from tourism tied to spring training and the Final Four, though higher fuel costs could dampen discretionary spending. Other panelists noted that the federal policy environment, tariffs, and immigration changes are likely to restrain growth, while productivity gains, especially from technology and AI, may help businesses maintain output. Several members also discussed housing, saying single-family permits have fallen while rental supply has improved affordability, and they raised concerns about labor-force growth, wage disparities, and the reliability of recent employment data revisions. No formal votes or actions were taken.