BILL ANALYSIS Ó
AB 1245
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Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1245 (Cooley) - As Amended April 6, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires employers to file Unemployment Insurance
(UI)-related data and taxes electronically by January 1, 2017 or
2018, depending on employer size, while allowing the Employment
Development Department (EDD) discretion to grant specified
AB 1245
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exemptions from the new requirements. It also applies existing
penalty structures to failures to comply with new electronic
reporting and funds transfer requirements.
FISCAL EFFECT:
This bill should not result in net costs to EDD, and should
result in savings, as explained below.
1)EDD estimates about $7.6 million in savings due to operational
efficiencies when this bill is fully implemented, which would
allow resources to be redirected to other workload.
2)EDD expects to incur higher licensing fees for customer
authentication software associated with more system users, but
states the information technology infrastructure is in place
to fully support electronic filing by all employers, and the
large cost savings from operational efficiencies dwarfs cost
increases from slightly higher fees.
3)Minor potential penalty revenues, dependent on compliance with
the new requirements. Also, approximately $800,000 in
increased interest is expected from receiving more timely
taxes via electronic funds transfer.
COMMENTS:
1)Purpose. According to the author, AB 1245 would phase in over
a two-year period the required use of electronic filing for
all California employers to submit returns and remit payments
to the Employment Development Department (EDD). The author
contends electronic filing for employers would increase
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efficiencies for both EDD and for the employer community
2)Background. Businesses are required to file wage and tax
information with, and remit payroll taxes to, EDD.
Approximately 35 percent of employers are currently enrolled
in e-Services for Business and are reporting wages and paying
taxes electronically. The remaining employers, or about
610,000 employers, still report wages and pay taxes by paper.
There is no registered opposition to this bill.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081