BILL ANALYSIS                                                                                                                                                                                                    

                                                                      SB 35  

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          Date of Hearing:  July 8, 2015


                                 Jimmy Gomez, Chair

          SB 35  
          (Wolk) - As Amended June 16, 2015

          |Policy       |Revenue and Taxation           |Vote:|9 - 0        |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  Yes State Mandated Local Program:  NoReimbursable:  No


          This bill allows, for taxable years beginning on or after  
          January 1, 2014 and before January 1, 2024, a deduction under  
          the Personal Income and Corporation Tax Laws for certain losses  
          sustained from a disaster occurring in California that is  
          proclaimed by the Governor to have resulted in a state of  

          FISCAL EFFECT:

          1)Minor and absorbable administrative costs to the Franchise Tax  


                                                                      SB 35  

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          2)Minimal expected GF revenue decrease.


          1)Purpose.  According to the author, this bill allows taxpayers  
            that suffered from the 2014 Napa earthquake to apply losses to  
            their tax returns filed the previous year, and expands state  
            disaster loss treatment for state tax purposes to taxpayers in  
            Sonoma County.  The author contends the Legislature has  
            enacted identical treatment for almost every significant  
            disaster that has occurred in California for the past 25  

          2)Sonoma County Relief.  Currently, a taxpayer may elect to file  
            an amended return to deduct a disaster loss in the year the  
            loss occurred, resulting in an expedited refund, if the  
            President has declared a disaster.  The election is not  
            available for disasters declared only by the Governor unless  
            the Legislature has enacted specific legislation with respect  
            to that disaster.  On August 24, 2014, the Governor declared a  
            state of emergency for Napa, Solano, and Sonoma Counties;  
            however, the President's declaration on September 11, 2014  
            included only Napa and Solano Counties.  This bill extends  
            state tax relief, but not federal relief, for disaster losses  
            to taxpayers in Sonoma County.

          3)Lasting Solution.  While this bill effectively provides  
            disaster loss relief to Sonoma County, it also provides a  
            broader, automatic disaster loss relief to any area proclaimed  
            by the Governor to be in a state of emergency.  As a result,  
            special legislation for Governor-declared disasters would no  
            longer be necessary to enable taxpayers to claim disaster  


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            losses, expediting economic assistance to affected areas and,  
            hopefully, hastening recovery.

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