BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1277


                                                                    Page  1





          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1277 (Brough) - As Amended April 29, 2015


           ----------------------------------------------------------------- 
          |Policy       |Revenue and Taxation           |Vote:|7 - 0        |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill increases, from $1,500 to $2,300, for a variety of  
          taxes administered by the Board of Equalization (BOE), the  
          maximum amount of levied funds the Taxpayers' Rights Advocate  
          may order returned to a taxpayer upon a finding that the levy or  
          notice to withhold threatens the health or welfare of the  
          taxpayer or the taxpayer's family, and requires the BOE to  
          adjust the maximum amount for inflation on or before March 1 of  
          each year, beginning March 1, 2016.


          FISCAL EFFECT:









                                                                    AB 1277


                                                                    Page  2






          Minor and absorbable administrative costs to BOE, expected  
          annual GF revenue losses of approximately $4,600 based on an  
          assumed return of funds by the Taxpayers' Rights Advocate twice  
          a year.


          COMMENTS:


          1)Purpose.  According to the author, this bill provides  
            additional relief for taxpayers in dire financial  
            circumstances.  AB 1277 increases the amount of levied funds  
            the Taxpayers' Rights Advocate may return to taxpayers in  
            cases where the levy threatens the health or welfare of the  
            taxpayer, the taxpayer's spouse, or the taxpayer's family.   
            The author asserts the amount has not been adjusted since the  
            authority was established in 1996.


            The bill's sponsor, the BOE, claims the increase in the  
            maximum returnable amount from $1,500 to $2,300 effectively  
            adjusts for inflation since 1996, and the bill's inflation  
            adjustment provision will provide future modifications as  
            needed.  The bill also includes levy return authority to the  
            remaining BOE-administered tax and fee programs.


          2)Return, Not Relief.  The BOE is authorized to levy funds,  
            including bank accounts, to collect delinquent tax due.   
            Occasionally, the seized taxpayer funds are essential to pay  
            the taxpayer's basic living expenses.  Only the Taxpayers'  
            Rights Advocate has the authority to return funds in such  
            instances, and decisions are made based on documented need,  
            not tax owed, and returned funds do not relieve the taxpayer  
            of any taxes owed.  While the amount returned is modest, the  
            author and sponsor believe a reasonable increase in the  
            maximum will help the amount returned keep pace with the cost  
            of living.








                                                                    AB 1277


                                                                    Page  3










          Analysis Prepared by:Joel Tashjian / APPR. / (916)  
          319-2081