Senate Bill No. 824

Introduced by Committee on Governance and Finance (Senators Wolk (Chair), Beall, DeSaulnier, Emmerson, Hernandez, Knight, and Liu)

March 20, 2013

An act to amend Section 25299.43 of the Health and Safety Code, and to amend Sections 55001 and 55332.5 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

SB 824, as introduced, Committee on Governance and Finance. State Board of Equalization: administration.

Under the existing Barry Keene Underground Storage Tank Cleanup Trust Fund Act of 1989, which is repealed on January 1, 2016, every owner of an underground storage tank is required to pay a storage fee for each gallon of petroleum placed in the tank. Existing law requires this fee to be paid to the State Board of Equalization, as specified which administers the collection and administration of those fees under the Underground Storage Tank Maintenance Fee Law.

This bill would correct an incorrect cross-reference in the provision requiring the fee to be paid to the State Board of Equalization.

Existing law establishes the Fee Collection Procedures Law, which provides for the administration and collection of various fee programs by the State Board of Equalization.

This bill would correct an inaccurate reference in the provision that establishes that law.

The Sales and Use Tax Law and other laws administered by the State Board of Equalization, including the Fee Collection Procedures Law, allow the board to accept an offer in compromise on a final liability imposed under or in accordance with those laws.

This bill would make a technical, clarifying change to the offer-in-compromise provision of the Fee Collection Procedures Law.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 25299.43 of the Health and Safety Code
is amended to read:

25299.43.  

(a) To implement the changes to this chapter made
by Chapter 1191 of the Statutes of 1994, and consistent with
Section 25299.40, effective January 1, 1995, every owner subject
to Section 25299.41 shall pay a storage fee of one mill ($0.001)
for each gallon of petroleum placed in an underground storage
tank that the person owns, in addition to the fee required by Section
25299.41.

(b) On and after January 1, 1996, the storage fee imposed under
subdivision (a) shall be increased by two mills ($0.002) for each
gallon of petroleum placed in an underground storage tank.

(c) On and after January 1, 1997, the storage fee increased under
subdivision (b) shall be increased by an additional three mills
($0.003) for each gallon of petroleum placed in an underground
storage tank.

(d) On and after January 1, 2005, the storage fee increased under
subdivision (c) shall be increased by an additional one mill ($0.001)
for each gallon of petroleum placed in an underground storage
tank.

(e) On and after January 1, 2006, the storage fee increased under
subdivision (d) shall be increased by an additional one mill
($0.001) for each gallon of petroleum placed in an underground
storage tank.

(f) On and after January 1, 2010, the storage fee increased under
subdivision (e) shall be increased by an additional six mills
($0.006) for each gallon of petroleum placed in an underground
storage tank. The increase provided for in this subdivision shall
be effective until January 1, 2014, at which time, the fee shall
revert back to the fee pursuant to subdivision (e).

(g) The fee imposed under this section shall be paid to the State
Board of Equalization under Part 26 (commencing with Section
50101) of Division 2 of the Revenue and Taxation Code in the
same manner as, and consistent with, the fees imposed under
Section begin delete 24299.41 end delete begin insert 25299.41 end insert .

(h) The State Board of Equalization shall amend the regulations
adopted under Section 25299.41 to carry out this section.

SEC. 2.  

Section 55001 of the Revenue and Taxation Code is
amended to read:

55001.  

This begin delete chapter end delete begin insert part end insert shall be known and may be cited as
the Fee Collection Procedures Law.

SEC. 3.  

Section 55332.5 of the Revenue and Taxation Code,
as amended by Section 16 of Chapter 285 of the Statutes of 2012,
is amended to read:

55332.5.  

(a) (1) The executive director and chief counsel of
the board, or their delegates, may compromise any final fee liability
where the reduction of fees is seven thousand five hundred dollars
($7,500) or less.

(2) Except as provided in paragraph (3), the board, upon
recommendation by its executive director and chief counsel, jointly,
may compromise a final fee liability involving a reduction in fees
in excess of seven thousand five hundred dollars ($7,500). A
recommendation for approval of an offer in compromise that is
not either approved or disapproved within 45 days of the
submission of the recommendation shall be deemed approved.

(3) The board, itself, may by resolution delegate to the executive
director and the chief counsel, jointly, the authority to compromise
a final fee liability in which the reduction of fees is in excess of
seven thousand five hundred dollars ($7,500), but less than ten
thousand dollars ($10,000).

(b) For purposes of this section, “a final fee liability” means
any final fee liability arising under Part 30 (commencing with
Section 55001), or related interest, additions to fees, penalties, or
other amounts assessed under this part.

(c) Offers in compromise shall be considered only for liabilities
that were generated from a business that has been discontinued or
transferred, where the feepayer making the offer no longer has a
controlling interest or association with the transferred business or
has a controlling interest or association with a similar type of
business as the transferred or discontinued business.

(d) Offers in compromise shall not be considered where the
feepayer has been convicted of felony tax evasion under this part
during the liability period.

(e) For amounts to be compromised under this section, the
following conditions shall exist:

(1) The feepayer shall establish that:

(A) The amount offered in payment is the most that can be
expected to be paid or collected from the feepayer’s present assets
or income.

(B) The feepayer does not have reasonable prospects of
acquiring increased income or assets that would enable the feepayer
to satisfy a greater amount of the liability than the amount offered,
within a reasonable period of time.

(2) The board shall have determined that acceptance of the
compromise is in the best interest of the state.

(f) A determination by the board that it would not be in the best
interest of the state to accept an offer in compromise in satisfaction
of a final fee liability shall not be subject to administrative appeal
or judicial review.

(g) (1) Offers for liabilities with a fraud or evasion penalty shall
require a minimum offer of the unpaid fee and fraud or evasion
penalty.

(2) The minimum offer may be waived if it can be shown that
the feepayer making the offer was not the person responsible for
perpetrating the fraud or evasion. This authorization to waive only
applies to partnership accounts where the intent to commit fraud
or evasion can be clearly attributed to a partner of the feepayer.

(h) When an offer in compromise is either accepted or rejected,
or the terms and conditions of a compromise agreement are
fulfilled, the board shall notify the feepayer in writing. In the event
an offer is rejected, the amount posted will either be applied to the
liability or refunded, at the discretion of the feepayer.

(i) When more than one feepayer is liable for the debt, such as
with spouses or partnerships or other business combinations,
including, but not limited to, feepayers who are liable through dual
determination or successor’s liability, the acceptance of an offer
in compromise from one liable feepayer shall reduce the amount
of the liability of the other feepayers by the amount of the accepted
offer.

(j) Whenever a compromise of fees or penalties or total fees
and penalties in excess of five hundred dollars ($500) is approved,
there shall be placed on file for at least one year in the office of
the executive director of the board a public record with respect to
that compromise. The public record shall include all of the
following information:

(1) The name of the feepayer.

(2) The amount of unpaid fees and related penalties, additions
to fees, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best
interest of the state.

The public record shall not include any information that relates
to any trade secrets, patent, process, style of work, apparatus,
business secret, or organizational structure, that if disclosed, would
adversely affect the feepayer or violate the confidentiality
provisions of Section 55381. A list shall not be prepared and
releases shall not be distributed by the board in connection with
these statements.

(k) A compromise made under this section may be rescinded,
all compromised liabilities may be reestablished, without regard
to any statute of limitations that otherwise may be applicable, and
no portion of the amount offered in compromise refunded, if either
of the following occurs:

(1) The board determines that a person did any of the following
acts regarding the making of the offer:

(A) Concealed from the board property belonging to the estate
of a feepayer or other person liable for the fee.

(B) Received, withheld, destroyed, mutilated, or falsified a book,
document, or record, or made any false statement, relating to the
estate or financial condition of the feepayer or other person liable
for the fee.

(2) The feepayer fails to comply with any of the terms and
conditions relative to the offer.

(l) A person who, in connection with an offer or compromise
under this section, or offer of that compromise to enter into that
agreement, willfully does either of the following shall be guilty of
a felony and, upon conviction, shall be fined not more than fifty
thousand dollars ($50,000) or imprisoned pursuant to subdivision
(h) of Section 1170 of the Penal Code, or both, together with the
costs of investigation and prosecution:

(1) Conceals from an officer or employee of this state property
belonging to the estate of a feepayer or other person liable in
respect of the fee.

(2) Receives, withholds, destroys, mutilates, or falsifies a book,
document, or record, or makes a false statement, relating to the
estate begin insert or financial condition of the feepayer or other person liable
in respect of the end insert fee.

(m) For purposes of this section, “person” means the feepayer,
a member of the feepayer’s family, a corporation, agent, fiduciary,
or representative of, or another individual or entity acting on behalf
of, the feepayer, or another corporation or entity owned or
controlled by the feepayer, directly or indirectly, or that owns or
controls the feepayer, directly or indirectly.

(n) This section shall become operative on January 1, 2018.