BILL NUMBER: AB 509	CHAPTERED
	BILL TEXT

	CHAPTER  452
	FILED WITH SECRETARY OF STATE  OCTOBER 4, 2011
	APPROVED BY GOVERNOR  OCTOBER 4, 2011
	PASSED THE SENATE  SEPTEMBER 6, 2011
	PASSED THE ASSEMBLY  SEPTEMBER 8, 2011
	AMENDED IN SENATE  AUGUST 30, 2011
	AMENDED IN SENATE  AUGUST 15, 2011
	AMENDED IN SENATE  JUNE 21, 2011
	AMENDED IN ASSEMBLY  MAY 27, 2011
	AMENDED IN ASSEMBLY  MARCH 25, 2011

INTRODUCED BY   Assembly Member Skinner

                        FEBRUARY 15, 2011

   An act to amend Sections 19851, 19852, and 19853 of the Revenue
and Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 509, Skinner. Federal earned income tax credit: notification:
state departments and agencies.
   The federal income tax law authorizes a refundable earned income
tax credit for certain low-income individuals who have earned income
and who meet certain other requirements. Existing California law
requires an employer, as defined, to notify all employees that they
may be eligible for the federal earned income tax credit (EITC), as
specified.
   This bill would require state departments and agencies that serve
those who may qualify for the EITC, as defined, to notify their
program recipients that they may be eligible for the EITC, at least
once a year during the months of January through April, or
alternatively, to provide this annual notification during a regularly
scheduled contact with a recipient by telephone, mail, or electronic
communication, or by an in-person communication, as specified. This
bill would require state departments and agencies that do not
directly communicate with persons who may qualify for the EITC to
communicate indirectly through agencies or districts serving those
persons.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 19851 of the Revenue and Taxation Code is
amended to read:
   19851.  The Legislature finds and declares as follows:
   (a) Congress created the federal earned income tax credit (EITC)
in 1975 to offset the adverse effects of the Medicare and social
security payroll taxes on working poor families and to encourage
low-income workers to seek employment rather than welfare.
   (b) Due to a relatively low percentage of federal earned income
tax credit eligible persons who participate in the federal Earned
Income Tax Credit program, hundreds of millions of federal dollars go
unclaimed by the working poor in California.
   (c) In order to alleviate the tax burden on working poor persons
and families, to enhance the wages and income of working poor persons
and families, to ensure that California receives its share of the
federal money available in the federal Earned Income Tax Credit
program, and to inject additional federal money into the California
economy, the state shall facilitate the furnishing of information to
working poor persons and families regarding the availability of the
federal earned income tax credit so that they may claim that credit
on their federal income tax returns.
   (d) It is the intent of this act to offer the most cost-effective
assistance to eligible taxpayers through the following:
   (1) Notices provided by their employers.
   (2) Notices provided by state departments and agencies that serve
those who may qualify for the EITC.
  SEC. 2.  Section 19852 of the Revenue and Taxation Code is amended
to read:
   19852.  For purposes of this part, the following terms have the
following meanings:
   (a) "Employer" means any California employer who is subject to,
and is required to provide, unemployment insurance to his or her
employees, under the Unemployment Insurance Code.
   (b) "Employee" means any person who is covered by unemployment
insurance by his or her employer, pursuant to the Unemployment
Insurance Code.
   (c) "EITC" means the federal earned income tax credit, as defined
in Section 32 of the Internal Revenue Code.
   (d) "State departments and agencies that serve those who may
qualify for the EITC" means the following programs in the specified
departments and agencies:
   (1) The State Department of Education: free or reduced-price meal
program and National School Lunch Program.
   (2) Employment Development Department: California Unemployment
Insurance.
   (3) State Department of Health Care Services: the Medi-Cal
program.
   (4) Managed Risk Medical Insurance Board (MRMIB): the Healthy
Families Program.
  SEC. 3.  Section 19853 of the Revenue and Taxation Code is amended
to read:
   19853.  (a) An employer shall notify all employees that they may
be eligible for the EITC within one week before or after, or at the
same time, that the employer provides an annual wage summary,
including, but not limited to, a Form W-2 or a Form 1099, to any
employee.
   (b) The state departments and agencies that serve those who may
qualify for the EITC, as defined in subdivision (d) of Section 19852,
shall notify their program recipients that they may be eligible for
the EITC, at least once a year during the months of January through
April, or alternatively, shall provide this annual notification
during a regularly scheduled contact with a recipient by telephone,
mail, or electronic communication, or by an in-person communication.
State departments or agencies that do not directly communicate with
persons or households with persons who may qualify for the EITC may
communicate indirectly through agencies, districts, or regulated
entities that serve eligible persons or households with eligible
persons. Departments, agencies, and programs are encouraged to
develop the most effective method to provide notice to recipients of
EITC eligibility, as long as the notice contains substantially the
same language as the notice described in Section 19854.
   (c) The employer shall provide the notification required by
subdivision (a) by handing directly to the employee or mailing to the
employee's last known address either of the following:
   (1) Instructions on how to obtain any notices available from the
Internal Revenue Service for this purpose, including, but not limited
to, the IRS Notice 797 and Form W-5, or any successor notice or
form.
   (2) Any notice created by the employer, as long as it contains
substantially the same language as the notice described in paragraph
(1) or in Section 19854.
   (d) The employer shall not satisfy the notification required by
subdivision (a) by posting a notice on an employee bulletin board or
sending it through office mail. However, these methods of
notification are encouraged to help inform all employees of the EITC.

   (e) Every employer shall process, in accordance with federal law,
Form W-5 for advance payments of the EITC, upon the request of the
employee.