ok I can't help on the HSA question I'm not familiar with CA taxes and wasn't aware HSAs are taxable in this way. The logic looks sound if Treasuries are similarly exempt here but they are usually exempt at the state level if taxed federally, here you have a oddball state situation where it's just being taxed at state level, I would check the CA tax code to see if there is guidance either way and maybe others will weigh in here.
