BILL ANALYSIS Ó SB 1015 Page 1 SENATE THIRD READING SB 1015 (Budget and Fiscal Review Committee) As Amended June 25, 2012 Majority vote. Budget Bill Appropriation Takes Effect Immediately SENATE VOTE :Vote not relevant SUMMARY : Contains the necessary changes to enact the 2012-13 Budget relating to revenue enforcement. The provision in this bill provide $38 million in General Fund solutions, which are included in the budget package. Specifically, this bill : 1)Expedites and reduces the costs associated with the earnings withhold process by expanding the term "state tax liability" to include any liability under the Personal Income Tax Law, Corporation Tax Law, or specified franchise and income tax provisions that is due and payable and that remains unpaid. The proposal would save the administrative cost associated with recording a lien. It would also allow the tax agency to collect tax liabilities that are over 10 years old. (Tax debts over 10 years old expire unless renewed by recording a lien). The change is expected to result in additional General Fund revenues of $11 million in the current year and $27 million in 2012-13. 2)Confirms that current law with respect to apportionment of corporation income is pursuant to an original return, repeals all provisions related to the Multistate Tax Compact resulting in budgetary savings of $0.5 million, and adopts non-inference language regarding this action. 3)Expands the use of a Financial Institution Records Match (FIRM). Authorizes the expansion of the FIRM program to the Employment Development Department (EDD) and Board of Equalization (BOE). The 2011 Budget Act authorized the Franchise Tax Board (FTB) to operate and administer FIRM and utilize automated data exchanges to identify accounts of delinquent tax debtors held at financial institutions doing business in California. The FTB estimated that the use of FIRM would generate $30 million in additional General Fund revenues in 2011-12. Expanding the FIRM program to tax programs administered by EDD and BOE, is expected to result in additional General Fund revenues of $4 million in 2011-12 and $11 million in 2012-13. 4)Contains an appropriation allowing this bill to take effect immediately upon enactment. SB 1015 Page 2 FISCAL EFFECT : The measure will result in additional General Fund revenues of $11 million in 2012-13 and $27 million in 2012-13. These revenues are assumed in the 2012-13 budget package. COMMENTS : This budget trailer bill includes revenue enforcement mechanism necessary to achieve $38 million of solutions assumed in the 2012-13 budget package. Analysis Prepared by : Christian Griffith / BUDGET / (916) 319-2099 FN: 0004242