BILL ANALYSIS Ó AB 877 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 877 (Bocanegra and Jones-Sawyer) As Amended May 6, 2014 2/3 vote. Tax levy ----------------------------------------------------------------- |ASSEMBLY: | |(January 27, |SENATE: |27-9 |(August 11, | | | |2014) | | |2014) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: E. & R. SUMMARY : Provides that, for taxable years beginning on or after January 1, 2014, a deduction shall not be allowed for the amount of any fine or penalty paid or incurred by an owner of a professional sports franchise, where that fine or penalty is assessed or imposed by the professional sports league that includes that franchise. The Senate amendments delete the Assembly version of this bill, and instead: 1)Provide that, for taxable years beginning on or after January 1, 2014, a deduction shall not be allowed for the amount of any fine or penalty paid or incurred by an owner of a professional sports franchise, where that fine or penalty is assessed or imposed by the professional sports league that includes that franchise. 2)Disallow a deduction under both the Personal Income Tax Law and the Corporation Tax Law. 3)Provide that this bill shall go into immediate effect as a tax levy. EXISTING LAW : 1)Allows various deductions in computing income subject to taxation. 2)Allows a deduction for ordinary and necessary business expenses, including a deduction for amounts paid or incurred for specified types of fines or penalties. AB 877 Page 2 AS PASSED BY THE ASSEMBLY , this bill revised the definition of a "voter verified paper audit trail." FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS : This bill was substantially amended in the Senate and the Assembly-approved version of this bill was deleted. This bill, as amended in the Senate, is inconsistent with Assembly actions and the provisions of this bill, as amended in the Senate, have not been heard in any Assembly policy committee. Analysis Prepared by : M. David Ruff / REV. & TAX. / (916) 319-2098 FN: 0004154