Budget & Taxes

Existing law establishes the Wildlife Conservation Board within the Department of Fish and Wildlife. Under existing law, the board administers various habitat conservation and restoration programs. This bill would require, upon appropriation by the Legislature, the sum of $21,500,000 to be allocated to the board for floodplain acquisition, habitat restoration, and associated conservation projects on floodplains in the Counties of Kern, Kings, and Tulare, as provided. This bill would make legislative findings and declarations as to the necessity of a special statute for Counties of Kern, Kings, and Tulare.

This measure would call on members of the United States Congress to oppose reductions to funding that negatively impact educational services for students with disabilities and would call on the President of the United States and Congress to ensure that services and funding for students with disabilities are uninterrupted.

Existing law establishes the Richard Paul Hemann Parkinson's Disease Program, which, among other things, requires the State Department of Public Health to collect data on the incidence of Parkinson's disease in California, as specified. Existing law allows an individual taxpayer to contribute amounts in excess of their personal income tax liability for the support of specified funds and accounts, including, among others, to the California Alzheimer's Disease and Related Dementia Research Voluntary Tax Contribution Fund. This bill would also allow an individual to designate on their tax return that a specified amount in excess of their tax liability be transferred to the Parkinson's Disease Research Voluntary Tax Contribution Fund, which would be created by this bill. The bill would continuously appropriate the moneys in the fund to the State Department of Public Health to support the above-referenced program relating to Parkinson's disease in California. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first. By establishing a continuously appropriated fund, this bill would make an appropriation.

Under existing law, if sufficient appropriations are not available for the payment of certain claims, settlements, or judgments, the Attorney General is required to report the claims, settlements, and judgments to the chairperson of either the Senate Committee on Appropriations or the Assembly Committee on Appropriations, who is then required to cause introduction of legislation appropriating the funds necessary for payment. This bill would appropriate $1,221,491.30 from the General Fund to the Attorney General for the payment of claims, settlements, or judgments against the state arising from 3 specified actions. This bill would declare that it is to take effect immediately as an urgency statute.

(1) The California Constitution generally limits the maximum rate of ad valorem tax on real property to 1% of the full cash value of the property and defines "full cash value" for these purposes as the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. Pursuant to constitutional authorization, existing property tax law excludes from the definition of "newly constructed" for these purposes the construction or addition of any active solar energy system, as defined, through the 2025–26 fiscal year, as provided. Existing law provides the exclusion for an active solar energy system applies to the initial purchaser of a new building, as provided, and requires the initial purchaser to file a claim with the assessor. This bill would state a claim filed by an initial purchaser is timely if it is filed within three years of the date of purchase. The bill would also provide that an otherwise valid claim for exclusion filed after the three year deadline would be applied beginning on the lien date for the assessment year in which the claim is filed. The bill would make these provisions operative beginning January 1, 2027. (2) Existing law, with respect to supplemental property tax assessments, specifies various limitation periods for assessments on the supplemental tax roll. Existing law provides for the application of property tax exemptions to those supplemental assessments provided, among other things, that an assessee file an exemption application within a specified time. Existing property tax law allows taxes, penalties, and interest imposed for late filings of property tax exemption applications for the supplemental roll that exceed $250 in total to be canceled or refunded up to 85% or 90%, as applicable, in the case of the exemption for a college, cemetery, church, religious, exhibition, or veterans' organization. This bill would expand this reduction to be applied to exemptions for public schools, as provided. (3) Existing property tax law provides, with respect to property eligible for the college, cemetery, church, religious, exhibition, veterans' organization, free public libraries, free museums, public schools, community colleges, state colleges, state universities, tribal housing, or welfare exemption but for which a timely application for exemption was not filed, that 90% of any tax or penalty or interest on that property shall be canceled or refunded if an appropriate application for exemption is filed on or before the lien date in the calendar year next succeeding the calendar year in which the exemption was not claimed by a timely application. Existing property tax law requires, if an appropriate application for exemption is filed within 90 days from the first day of the month following the month in which the property was acquired or by February 15 of the following calendar year, whichever occurs first, any tax or penalty or interest imposed upon property owned by any organization qualified for the college, cemetery, church, religious, exhibition, veterans' organization, tribal housing, or welfare exemption that is acquired by that organization during a given calendar year, after the lien date but before the first day of the fiscal year commencing within that calendar year, if the property is of a kind that would have been qualified for the college, cemetery, church, religious, exhibition, veterans' organization, tribal housing, or welfare exemption if it had been owned by the organization on the lien date, to be canceled or refunded. This bill would add public schools to the list of entities eligible for the cancellation or refund of any tax or penalty or interest imposed on property acquired in a given calendar year after the lien date but before the first day of the fiscal year commencing within that calendar year. The bill also would make conforming changes. By expanding the duties of local tax officials, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing property tax law permits, at the election of the assessee, the installment payment of delinquent taxes on tax-defaulted property under an installment payment plan. Existing law also permits a one-year deferral of payment under an existing installment plan if the county was declared by the Governor to be in a state of emergency or disaster due to a major misfortune or calamity and specified conditions are met, including that the installment plan was already in existence at the time deferral is requested by the assessee or the agent of the assessee. This bill would modify the above-described condition to be that the installment plan was already in existence, or that the taxpayer had submitted an application for the installment plan, at the time deferral is requested by the assessee or the agent of the assessee. The bill would also remove an obsolete definition from these provisions.

Existing law allows an individual taxpayer to contribute amounts in excess of their personal income tax liability for the support of specified funds and accounts, including, among others, to the California Cancer Research Voluntary Tax Contribution Fund. This bill would allow an individual to designate on their tax return that a specified amount in excess of their tax liability be transferred to the continuously appropriated California Pediatric Cancer Research Voluntary Tax Contribution Fund, which would be created by this bill. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first. By establishing a new continuously appropriated fund, this bill would make an appropriation. The bill would require that the above provisions remain operative only until January 1 of the 7th calendar year following the first appearance of the California Pediatric Cancer Research Voluntary Tax Contribution Fund on the tax return, except as specified.

This measure would urge the United States Congress to avoid any cuts to the Supplemental Nutrition Assistance Program (SNAP) , which could harm the state's children, older adults, and families, and impact the state's economic well-being.

(1) Existing law provides that a provision of a memorandum of understanding reached between the state employer and a recognized employee organization representing state civil service employees that requires the expenditure of funds does not become effective unless approved by the Legislature in the annual Budget Act. Existing law requires the Department of Human Resources to provide a memorandum of understanding to the Legislative Analyst, who then has 10 calendar days from the date the tentative agreement is received to issue a fiscal analysis to the Legislature. Existing law prohibits the memorandum of understanding from being subject to legislative determination until either the Legislative Analyst has presented a fiscal analysis of the memorandum of understanding or until 10 calendar days have elapsed since the memorandum was received by the Legislative Analyst. This bill, notwithstanding the above-described statutory provisions, would approve provisions of the agreements entered into by the state employer and specified state bargaining units. The bill would provide that the provisions of the agreements that require the expenditure of funds will not take effect unless funds for these provisions are specifically appropriated by the Legislature. The bill would authorize the state employer or the bargaining units to reopen negotiations if funds for these provisions are not specifically appropriated by the Legislature. The bill would require the provisions of the agreement that require the expenditure of funds to become effective even if the provisions are approved by the Legislature in legislation other than the annual Budget Act. By approving provisions of the agreements that require the expenditure of funds, this bill would make an appropriation. (2) Existing law, for the 2026–27 fiscal year, continuously appropriates to the Controller from the General Fund unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment and compensation and employee benefits to state employees covered by specified memoranda of understanding if the Budget Act of 2026 is not enacted by July 1, 2026. This bill would additionally include the memoranda of understanding for State Bargaining Unit 2 (effective July 1, 2025, to June 30, 2028, inclusive) , State Bargaining Unit 7 (effective July 1, 2023, to June 30, 2027, inclusive) , State Bargaining Unit 13 (effective July 1, 2025, to June 30, 2027, inclusive) , State Bargaining Unit 16 (effective July 1, 2025, to July 1, 2028, inclusive) , and State Bargaining Unit 19 (effective July 1, 2025, to June 30, 2028, inclusive) . Existing law, for the 2027–28 fiscal year, continuously appropriates to the Controller from the General Fund unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment and compensation and employee benefits to state employees covered by specified memoranda of understanding if the Budget Act of 2027 is not enacted by July 1, 2027. This bill would additionally include the memoranda of understanding for State Bargaining Unit 2 (effective July 1, 2025, to June 30, 2028, inclusive) , State Bargaining Unit 16 (effective July 1, 2025, to July 1, 2028, inclusive) , and State Bargaining Unit 19 (effective July 1, 2025, to June 30, 2028, inclusive) . Existing law, for the 2028-29 fiscal year, continuously appropriates to the Controller from the General Fund unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment and compensation and employee benefits to state employees covered by the memorandum of understanding for State Bargaining Unit 6, if the Budget Act of 2028 is not enacted by July 1, 2028. This bill would additionally include the memorandum of understanding for State Bargaining Unit 16 (effective July 1, 2025, to July 1, 2028, inclusive) . (3) Existing law states that it is the policy of the state that the workweek of the state employee shall be 40 hours, and the workday of state employees 8 hours, except that workweeks and workdays of a different number of hours may be established in order to meet the varying needs of the different state agencies. Existing law also requires state employees in Bargaining Units 6, 9, and 12, except as specified, from July 1, 2025, to June 30, 2027, inclusive, to participate in the Personal Leave Program 2025 (PLP 2025) , either as required by an applicable memorandum of understanding reached or by the direction of the department for excluded employees, under which each employee receives a reduction in pay not greater than 3% in exchange for a specified number of hours per month of PLP 2025 leave credits. This bill would also require state employees in Bargaining Units 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 16, 17, 19, 20, and 21 to participate in the PLP 2025, for the period from July 1, 2025, to June 30, 2027, inclusive, either as required by an applicable memorandum of understanding or by the direction of the department for excluded employees. Under the program, in exchange for a reduction in pay not greater than certain listed amounts, those employees would receive monthly PLP 2025 leave credits, subject to certain exclusions. The bill would make other related and conforming changes to these provisions. (4) The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System for the purpose of providing public employees pension and other benefits, which are funded by employee and employer contributions and investment returns. Contributions and investment returns are deposited in the Public Employees' Retirement Fund, which is continuously appropriated for the payment of benefits and administration of the system. PERL vests management and control of PERS in its board of administration. PERL and labor agreements prescribe different normal rates of contribution for employees depending on bargaining unit, employer, and inclusion of service in the federal social security system, among other factors. Under PERL, effective July 1, 2023, the normal contribution rates for state miscellaneous or state industrial members who are represented by State Bargaining Unit 2 are adjusted in accordance with specified procedures based on increases or decreases in normal cost rates, as determined by the board. This bill would change the above-described effective date to July 1, 2027. The bill would also provide that, effective July 1, 2025, to June 30, 2027, inclusive, specified employee contributions for state miscellaneous and industrial members represented by State Bargaining Unit 2 will remain in place. Existing law adjusts the normal contribution rate for state miscellaneous and industrial members who are represented by State Bargaining Unit 12 in accordance with certain procedures. Under existing law, effective July 1, 2026, certain employee contribution rates are to remain in effect for those members unless the board makes certain determinations regarding cost rate increases or decreases. This bill would suspend increases to those employee retirement contributions effective July 1, 2025, to June 30, 2027, inclusive. Under existing law, effective July 1, 2026, the normal rate of contribution for state safety members who are represented by State Bargaining Unit 12 is to remain in effect unless the board determines that certain total normal cost rates have increased or decreased, as prescribed. This bill would suspend increases to those employee retirement contributions effective July 1, 2025, to June 30, 2027, inclusive. Existing law establishes that, effective July 1, 2026, the employee contribution rates for state miscellaneous, state industrial, and state safety members who are represented by State Bargaining Unit 19 shall remain in effect unless the board determines that specified conditions have been met regarding increases or decreases in normal cost rates. This bill would revise the above-described effective date for those provisions to July 1, 2027. Existing law, effective July 1, 2023, requires an adjustment in the normal contribution rates for state safety members represented by State Bargaining Unit 2 when specified conditions occur regarding normal cost rate increases or decreases, as determined by the board. This bill would revise the effective date of the above provision to July 1, 2027. The bill would also require the employee contribution for state safety members represented by State Bargaining Unit 2 to remain at 11.5% from July 1, 2025, to June 30, 2027, inclusive. (5) The Public Employees' Medical and Hospital Care Act (PEMHCA) , which is administered by the Board of Administration of the Public Employees' Retirement System, prescribes methods for calculating the state employer contribution for postemployment health care benefits for eligible retired public employees and their families and for the vesting of these benefits. PEMHCA establishes the Annuitants' Health Care Coverage Fund, which is continuously appropriated, for the purpose of prefunding health care coverage for annuitants, including administrative costs. PEMHCA requires employees in specified state bargaining units to prefund retiree health care and the state to make a matching contribution. PEMHCA suspends employer's and employees' monthly contributions for prefunding other postemployment benefits for the 2025–26 and 2026–2027 fiscal years for specified state bargaining units, including State Bargaining Unit 6. This bill would suspend the employee and employer monthly contributions for prefunding other post employment benefits for other employees in specified bargaining units for the 2025-26 and 2026-27 fiscal years, including State Bargaining Units 1, 2, 3, 4, 5, 7, 13, 14, 15, 16, 17, 19, 20, and 21. The bill would establish the percentage of pensionable compensation to be contributed for prefunding those benefits commencing July 1, 2027, and for each year thereafter, as prescribed. The bill would make other related changes to these provisions. (6) The Budget Act of 2025 makes various appropriations for the purpose of employee compensation. This bill would provide for the reduction of specified Budget Act item appropriations pursuant to agreements reached between the state employer and State Bargaining Units 1, 2, 3, 4, 5, 7, 8, 11, 13, 14, 15, 16, 17, 18, 19, 20, and 21 in accordance with a specified schedule. The Budget Act of 2025 also states that it is the expectation of the Legislature that all state employee bargaining units meet and confer in good faith with the Governor or the Governor's representative on or before July 1, 2025, to achieve savings through the collective bargaining process for represented employees and existing authority for the administration to adjust compensation for nonrepresented employees. This bill would provide that the reductions achieved through the PLP 2025 do not apply to employees of specified state entities. (7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

The California Constitution provides that all property is taxable, and requires that it be assessed at the same percentage of fair market value, unless otherwise provided by the California Constitution or federal law. The California Constitution and existing property tax law provide various exemptions from taxation, including, among others, a disabled veterans' exemption. Under existing law, the disabled veterans' exemption exempts from taxation part of the full value of property that constitutes the principal place of residence of a veteran, the veteran's spouse, or the veteran and veteran's spouse jointly, and the unmarried surviving spouse of a veteran, as provided, if the veteran incurred specified injuries or died while on active duty in military service, as described. Existing law exempts that part of the full value of the residence that does not exceed $100,000, or $150,000 if the household income of the claimant does not exceed $40,000, as adjusted for inflation, as specified. This bill would, until January 1, 2036, exclude service-connected disability payments from the definition of "household income" for purposes of the disabled veterans' exemption. The bill would also correct an erroneous cross-reference in the above-described provisions. By imposing additional duties on local tax officials, the bill would impose a state-mandated local program. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. This bill would take effect immediately as a tax levy.