BILL ANALYSIS Ó
SB 582
Page 1
SENATE THIRD READING
SB 582 (Knight)
As Amended August 13, 2013
Majority vote
SENATE VOTE :38-0
REVENUE & TAXATION 9-0 APPROPRIATIONS 17-0
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|Ayes:|Bocanegra, Dahle, Gordon, |Ayes:|Gatto, Harkey, Bigelow, |
| |Harkey, Mullin, Nestande, | |Bocanegra, Bradford, Ian |
| |Pan, | |Calderon, Campos, |
| |V. Manuel Pérez, Ting | |Donnelly, Eggman, Gomez, |
| | | |Hall, Holden, Linder, |
| | | |Pan, Quirk, Wagner, Weber |
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SUMMARY : Requires, on or before January 1, 2015, the Franchise
Tax Board (FTB), the State Board of Equalization (BOE), and the
Employment Development Department (EDD) to conduct a feasibility
study on the development of a single Internet Web-based portal
that virtually consolidates the three agencies. Specifically,
this bill :
1)Require FTB, BOE, and EDD to do all of the following:
a) Collaborate and conduct a feasibility study for
developing a single Internet Web-based portal that
virtually consolidates the three agencies.
b) Submit the feasibility study to the Legislature, in
compliance with Government Code Section 9795, no later than
six months after completion.
c) Consider the California Tax Service Center Internet Web
site in the feasibility study.
d) Complete the feasibility study with existing agency
budgets.
e) Consolidate tax forms, applications, and other documents
to reduce or eliminate multiple submissions of the same
information by taxpayers if the three agencies determine
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that a need exist to improve cost-effective services and an
appropriation is made by the Legislature.
2)Provides that the Internet Web-based portal shall allow
online, self-service access through a single logon for
taxpayers to do all of the following:
a) Electronically file returns, submit forms or other
information.
b) Remit amounts due, determine account balances and due
dates of taxes.
c) Identify the status of an appeal, claim for refund,
request for relief of interest or penalty, and any other
information the agencies deem helpful to the taxpayer to
assist the taxpayer in compliance with the state's tax
laws.
3)Includes legislative findings and declarations relating to the
state tax administration and the development of a
taxpayer-focused system that virtually consolidates the BOE,
FTB, and EDD.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill has minor and absorbable costs to the
respective affected agencies for planning. The affected
agencies are quick to point out they are already working to
identify opportunities to coordinate and collaborate. However,
as these efforts progress, there are likely to be costs to
prepare a feasibility study and this could cost several hundred
thousand dollars. In the future there are unknown, likely major
cost pressures to FTB, BOE, and EDD, potentially in the range of
$10 million, to make coordinated IT improvements to each
agency's independent systems to virtually consolidate the
agencies, providing self-service access with a single logon.
The bill states the work will be done within existing resources,
but that merely shifts cost pressure to other areas of the
agencies' budgets.
COMMENTS :
1)Author's Statement : The author has provided the following
statement in support of this bill:
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Senate Bill 582 asks the [BOE], [FTB], and [EDD] to
conduct a feasibility study to consolidate tax
services into a single website. The study will
investigate the most effective and cost-efficient
manner to develop a web-based portal that virtually
consolidates the agencies to enable online,
self-service access through a single logon for
taxpayers. The study will also investigate the
consolidation of forms, applications, and other
documents. The goal is to streamline filing
requirements by providing taxpayers with up-to-date
integrated access to accounts with all three tax
agencies.
2)Arguments in Support : The sponsor states that "[t]he tax
paying process in California has become complex and difficult
to navigate for our taxpayers. To obtain assistance and
comply with California's current tax laws, policies, and
procedures, many taxpayers interact with each of [the] three
agencies separately." This bill will help provide a seamless
tax paying experience with all three agencies by laying the
foundation for a "single website with guidance in navigating
the complexities of payment and reporting obligations,
obtaining real time information pertinent to their individual
accounts, and receiving assistance to achieve optimum
compliance with California's complex tax system." This bill
"would be an important step toward efficiency, both by more
effectively using tax dollars and in assisting the taxpayer in
more easily complying with California's complicated tax laws."
3)Virtual vs. Actual Consolidation : The Legislative Analyst's
Office (LAO) has consistently argued that consolidation of
state tax agencies and functions would require the state to
incur significant implementation costs, with only possible
long-term savings. Whether long-term savings will offset
those immediate costs is largely unknown. The LAO, in its
report, concluded that "consolidation of the tax agencies'
payment and documentation processing activities could in the
medium to long term generate some annual cost savings and
interest earnings through elimination of duplicative functions
and increased efficiencies." Tax Agency Consolidation:
Remittance and Return Processing, LAO, January 2005. However,
the state would have "to incur significant net costs in short
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term to achieve these savings." Recognizing that having three
separate agencies creates confusion for some taxpayers, the
LAO report suggested that the state expand electronic filing
and processing. In addition, the LAO recommended using
electronic filing and processing to achieve a "virtual
consolidation" of remittance and document processing. The
report explained that, under this type of system, "taxpayers
could log onto a single website and through a series of menus,
be directed to the proper form which would allow them to file
their taxes or remit a payment." The form, in turn, would be
automatically directed to the appropriate agency.
4)The California Tax Service Center (CTSC) Web site : LAO's
virtual consolidation proposal was partly implemented through
the development of the CTSC Web site, www.taxes.ca.gov . It
was established to simplify taxpayers' experience in complying
with state and federal tax laws. The Web site is a result of
the "California Fed State Partnership," which consists of the
BOE, the EDD, and the FTB, and the Internal Revenue Service
(IRS). It includes information on income, payroll, SUT, as
well as other taxes and fees. Although the Web site provides
links to the appropriate forms, information, requirements, and
payment options located on the BOE's, FTB's, EDD's, and the
IRS' individual websites, it does not currently allow a
taxpayer to access the taxpayer's records at the BOE, EDD, or
FTB with one single logon.
5)Related Legislation :
AB 833 (Harkey), introduced in the current legislative
session, requires the FTB, BOE, and EDD to conduct a
feasibility study on the creation of a single Internet
Web-based portal that virtually consolidates the three
agencies. AB 833 is pending in the Senate Appropriations
Committee.
SB 1326 (Harman), introduced in the 2011-12 legislative
session, would have required the FTB, BOE, and EDD to create a
single Internet Web-based portal that virtually consolidates
the three agencies. SB 1326 was held under submission in the
Senate Appropriations Committee.
AB 77 (Gorell), introduced in the 2011-12 legislative session,
would have consolidated the FTB, EDD, and the California
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Department of Insurance into the BOE. This bill was never
heard in committee.
SB 1133 (Runner), introduced in the 2009-10 legislative
session, was similar to AB 77. SB 1133 was held under
submission in the Senate Revenue and Taxation Committee.
Analysis Prepared by : Carlos Anguiano / REV. & TAX. / (916)
319-2098
FN: 0002157