BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 2686
Author: Assembly Revenue and Taxation Committee
Amended: 8/14/12 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 8-0, 6/28/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, La
Malfa, Liu, Yee
NO VOTE RECORDED: Kehoe
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/6/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
ASSEMBLY FLOOR : 73-0, 5/10/12 (Consent) - See last page
for vote
SUBJECT : Taxation: Taxpayers Rights Advocate
SOURCE : Franchise Tax Board
DIGEST : This bill reinstates, until January 1, 2016, the
authority for the Taxpayers Rights Advocate (Advocate) to
relieve taxpayers from penalties, interest, fees, and
additions to tax that are attributable to a Franchise Tax
Board (FTB) error.
ANALYSIS : Existing law, enacted by the Katz-Harris
Taxpayers' Bill of Rights (AB 2788 (Harris), Chapter 1573,
Statutes of 1988), establishes the position of the
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Taxpayers' Rights Advocate to coordinate the resolution of
taxpayer complaints and problems. Existing law in effect
from January 1, 2009 until January 1, 2012 provides the
Advocate with discretionary authority to abate penalties,
interest, fees, or additions to tax owed by a taxpayer as a
result of specified FTB errors or delays (AB 3078 (Assembly
Revenue and Taxation Committee), Chapter 305, Statutes of
2008). The Advocate could only provide relief if no part
of the error or delay could be attributable to the
taxpayer, and when relief is not otherwise available.
This bill reinstates, until January 1, 2016, the
discretionary authority for FTB's Taxpayers' Rights
Advocate to abate penalties, interest, fees, and additions
to tax that are attributable to: (1) erroneous action or
inaction by the FTB in processing documents or payments;
(2) unreasonable FTB delays; or (3) erroneous written
advice that does not otherwise qualify for relief.
The Advocate may only grant relief if no significant part
of the error or delay is attributable to the taxpayer and
relief is not available under existing law. The maximum
amount of relief that may be provided in any given case is
$7,500, which may be adjusted annually for inflation, and
any relief exceeding $500 must be approved by FTB's
executive officer. Whenever relief is granted, a public
record must be created in the executive officer's office
that documents the taxpayer's name, the total amount
involved, the amount payable or refundable due to the error
or delay, and a summary of why relief is warranted. This
bill prohibits any other entity from participating in the
decision to provide relief, and specifies that any
determination by the Advocate that amounts owed by a
taxpayer are attributable to an FTB error or delay are not
subject to administrative or judicial review.
Comments
This bill provides a process for taxpayers to receive
relief from penalties, interest, fees, or additional tax
liabilities when those amounts are a direct result of FTB
errors or delays, and if relief of those charges is not
available elsewhere under existing law.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
FTB indicates that any impacts on the staff of the
Advocate would be minor and absorbable, and that the bill
is expected to ultimately result in minor administrative
savings related to avoided litigation and appeals costs.
Unknown General Fund impacts; actual revenue impacts
would depend upon the frequency and value of any FTB
errors. Based upon historical experience when the
authority provided by this bill was in effect, FTB
estimates minor revenue impacts.
SUPPORT : (Verified 8/14/12)
Franchise Tax Board (source)
California Taxpayers' Association
ASSEMBLY FLOOR : 73-0, 5/10/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Pan, Perea,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Cook, Fletcher, Furutani, Jeffries,
Norby, Olsen, V. Manuel Pérez
AGB:d 8/14/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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