Fresh Start Grants: Personal Income Tax Law: credits.

Assembly Member McKinnor's Fresh Start Grants legislation transforms California's approach to providing financial assistance to low-income residents by converting three existing tax credits into direct grants for CalFresh recipients. Beginning January 2027, county welfare departments will calculate and distribute Fresh Start Grants equivalent to the California Earned Income Tax Credit, Young Child Tax Credit, and Foster Youth Tax Credit amounts that recipients would have qualified for under current law.

The bill establishes the continuously appropriated Fresh Start Grants Fund within the State Treasury to finance these grants. The Franchise Tax Board must annually estimate the total tax credits that would be issued in the upcoming year and transfer that amount from the Tax Relief and Refund Account to the Fresh Start Grants Fund. Recipients' tax credits will be reduced by any Fresh Start Grant amounts received to prevent duplicate benefits.

To implement this program, county welfare departments will determine grant eligibility and amounts for CalFresh recipients. The State Department of Social Services and county agencies will share necessary information with the Franchise Tax Board under strict confidentiality requirements. The bill grants the Franchise Tax Board authority to issue regulations and guidance for program administration.

As this change would result in some taxpayers paying higher taxes, the bill requires a two-thirds vote of both legislative houses for passage. While certain local implementation costs are not reimbursable, the Commission on State Mandates may determine that other state-mandated costs qualify for reimbursement to local agencies and school districts.