BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1530|
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THIRD READING
Bill No: AB 1530
Author: Skinner (D)
Amended: 6/30/10 in Senate
Vote: 21
SENATE REVENUE & TAXATION COMMITTEE : 3-0, 6/23/10
AYES: Wolk, Alquist, Padilla
NO VOTE RECORDED: Walters, Ashburn
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : Not relevant
SUBJECT : Franchise Tax Board: administration of taxes
SOURCE : Franchise Tax Board
DIGEST : This bill allows the Franchise Tax Board to
collect restitution orders in the same way that it collects
tax liabilities.
ANALYSIS : Existing law authorizes the Franchise Tax
Board (FTB) to administer the Personal Income Tax Law and
Corporation Tax Law. FTB may refer cases for criminal
prosecution for certain offenses, and the court may require
the restitution, for the following crimes:
Failure to file returns.
Forging a spouse's signature.
False, fraudulent, or deceptive conduct.
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Tax evasion.
Conversion of a taxpayer refund by a tax preparer.
Employer's failure to collect or deposit tax.
Existing law further authorizes FTB to file an action in
civil court for a civil judgment under the Code of a Civil
Procedure.
Existing law allows FTB to collect criminal restitution
fines under the Court Ordered Debt (COD) program, in
addition to fines, state or local penalties, forfeitures,
in amounts that exceed $100 in the aggregate and are more
than 90 days delinquent to FTB (AB 3343 [Hannigan], Chapter
1242, Statutes of 1994), and subsequently expanded and
extended (SB 246 [Escutia], Chapter 380, Statutes of 2004).
Restitution orders must be imposed by a governmental
entity that:
1. Is authorized to collect on behalf of the state or
victim.
2. Is responsible for distributing the restitution order
collections
3. Ensures that it coordinates with any other related
collection activities that may occur during that debt.
Existing law allows FTB to collect these amounts using wage
garnishments, bank levies, and Notices of State Tax Liens
when an amount is due and payable, and the taxpayer has not
paid. Garnishments and levies are treated like warrants
issued as part of the civil process.
Existing law establishes a priority for payment of debts
when multiple debts are owed by the same taxpayer and are
collected by FTB. In order:
1. Child support delinquencies.
2. Payment of taxes, additions to tax, penalties and
interest.
3. Delinquent wages.
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4. Delinquent vehicle license fees
5. Amounts due under the COD program
6. Amounts referred for collection under the Cal-OSHA
targeted inspection program.
7. Delinquent penalties collected for the Department of
Industrial Relations.
8. Delinquent fees collected for the Department of
Industrial Relations.
9. Delinquencies referred by the California Student Aid
Commission.
This bill allows FTB to collect restitution orders, fines,
penalties, or any other amounts awarded to FTB by a court
of competent jurisdiction in criminal proceedings in the
same way that it collects tax liabilities, although the
inclusion of fines, penalties, or any other amounts awarded
to FTB by the courts was erroneously included in the draft,
and will be removed to conform with the author's intent.
This bill specifies that the provisions to the Personal
Income Tax Law, the Administration of the Franchise and
Income Tax Law, the Taxpayers' Bill of Rights, and the
Corporation Tax Law shall apply to amounts collected under
this bill, unless a conflict exists.
This bill allows taxpayers to designate voluntary
restitution payments as the taxpayer designates, but no
refund or credit is allowed.
This bill provides that for all amounts authorized to be
collected before, on, or after January 1, 2011:
1. Interest accrues for the above collections at the
greater rate of restitution orders (10 percent per year)
or tax penalties, which are computed according to a
statutory formula.
2. Collection amounts are not bound by statutes of
limitation.
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3. FTB may file Notices of State Tax Lien at any time until
the amount is paid in full.
4. FTB may retain an amount to compensate for its
investigatory costs out of the restitution amount.
Comments
According to the author, "This bill would provide the FTB
express authority to collect orders of restitution awarded
to the department in criminal proceedings in the same
manner as tax debts. Authorizing the FTB to use its
efficient electronic tax collection tools would improve the
process of collecting orders of restitution awarded to the
FTB and ensure prompt follow up on debts by allowing the
tax collection system to monitor accounts for assets that
could lead to satisfaction of the debt. Orders of
restitution consist primarily of the taxes, penalties, and
interest owed to the FTB and should be collected as such."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/4/10)
Franchise Tax Board (source)
DLW:mw 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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