BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 582
Author: Knight (R)
Amended: 8/13/13
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 5/1/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SENATE FLOOR : 38-0, 5/28/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Corbett,
Correa, De León, DeSaulnier, Emmerson, Evans, Fuller, Gaines,
Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson,
Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen, Padilla,
Pavley, Price, Roth, Steinberg, Torres, Walters, Wolk, Wright,
Wyland, Yee
NO VOTE RECORDED: Cannella, Vacancy
ASSEMBLY FLOOR : 77-0, 9/4/13 - See last page for vote
SUBJECT : Tax information: administration
SOURCE : Board of Equalization Member, George Runner
DIGEST : This bill requires, by January 1, 2015, the Franchise
Tax Board (FTB), the Board of Equalization (BOE) and the
Employment Development Department (EDD) to conduct a feasibility
study on the development of a single internet portal that
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virtually consolidates the agencies to enable online,
self-service access through a single logon for taxpayers.
Assembly Amendments add a January 1, 2018, sunset date; require
the feasibility study be sent to the Legislature; provide for
the consideration of the California Tax Service Center Internet
Web site in the feasibility study; and delete the appropriation
provision.
ANALYSIS : The California Constitution establishes BOE as a
five-member board composed of four members elected by each
district plus the State Controller. Currently, BOE administers
sales and use taxes, excise taxes, special taxes, and the
state's fee programs.
Existing law requires employers who pay employees
California-sourced income to withhold expected taxes.
Businesses with one or more employees in the current or
preceding taxable year, and who pays wages in excess of $100 per
quarter must register with EDD. Employers deposit personal
income tax withholding by mail or electronically with EDD, along
with amounts for Unemployment Insurance (UI), Employment
Training Taxes, and State Disability Insurance (SDI). Federal
schedules determine when employers make Personal Income Tax and
SDI payments, while UI and ETT payments are made quarterly.
Each quarter, the taxpayer files a form to reconcile these
deposits with actual taxes due.
FTB is a three-person board comprised of the State Controller,
Director of the Department of Finance, and Chair of the BOE.
FTB administers the Personal Income Tax and Corporation Tax Law,
and collects debts on behalf of state and local agencies. FTB
may issue forms necessary to administer the taxes. Employees
and others receiving payments reconcile amounts previously
withheld with actual tax due when filing their annual tax
returns with FTB.
This bill requires, on or before January 1, 2015, EDD, FTB, and
BOE to collaborate and focus their current and future
information technology (IT) efforts to conduct a feasibility
study on developing a single web-based portal that virtually
consolidates the agencies to enable online, self-service access
through a single logon for taxpayers to:
Electronically file returns
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Submit forms or other information
Remit amounts due
Determine account balances and tax due dates
Identify appeal status
Claim a refund
Request relief from interest or penalty
Any other information the agencies deem helpful to the
taxpayer to assist in compliance with the state's tax laws.
This bill additionally requires EDD, FTB, and BOE to:
1.Submit the feasibility study to the Legislature no later than
six months after completion.
2.Consider the California Tax Service Center Internet Web site
in the feasibility study.
3.Complete the feasibility study with existing agency budgets.
4.Consolidate tax forms, applications, and other documents to
reduce or eliminate multiple submissions of the same
information by taxpayers if the three agencies determine that
a need exist to improve cost-effective services and an
appropriation is made by the Legislature.
This bill also makes legislative findings and declarations to
support its purposes, and sunsets on January 1, 2018.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee:
Minor and absorbable costs to the respective affected agencies
for planning.
The affected agencies point out they already work 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,
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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.
SUPPORT : (Verified 9/5/13)
Board of Equalization Member, George Runner (source)
OPPOSITION : (Verified 9/5/13)
Department of Finance
ARGUMENTS IN SUPPORT : According to the author, "The tax
paying process in California is daunting, intimidating, and
confusing due to the course of action a taxpayer must undergo in
order to comply with California's tax policies. Focusing on the
customer should and will remain a core element of California's
tax administration. To obtain assistance and comply with
California's current tax laws, policies, and procedures, many
taxpayers interact with each agency separately. Taxpayers
should not have to navigate through complex government
structures, understanding bureaucratic relationships in order to
interact with the government agencies, particularly in a
sensitive area like taxes. This measure seeks to consolidate
the online presence of BOE, FTB and EDD, creating a one-stop
shop for taxpayers to go for all of their tax services. The
goal is to provide a seamless process for taxpayers' online
interactions in California."
ARGUMENTS IN OPPOSITION : The Department of Finance is opposed
to this bill because the scope of the study is undefined, the
study would be duplicative of the recently-conducted California
Department of Revenue study, and likely disruptive of approved,
ongoing significant IT projects in the Departments. All of the
Departments are in various phases of IT projects to upgrade and
modernize their audit and collection functions. FTB is in the
third year of implementation of the $487 million Enterprise Data
to Revenue project and has expended approximately $154 million
to date. BOE has expended in excess of $45 million of the
estimated $279 million required to implement the Centralized
Revenue Opportunity System project, and will enter into a vendor
contract within the next few months.
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ASSEMBLY FLOOR : 77-0, 09/04/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Mitchell, Morrell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,
V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Melendez, Vacancy, Vacancy
AB:nl:e 9/5/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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