BILL ANALYSIS Ó
SB 35
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Date of Hearing: July 8, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 35
(Wolk) - As Amended June 16, 2015
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|Policy |Revenue and Taxation |Vote:|9 - 0 |
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows, for taxable years beginning on or after
January 1, 2014 and before January 1, 2024, a deduction under
the Personal Income and Corporation Tax Laws for certain losses
sustained from a disaster occurring in California that is
proclaimed by the Governor to have resulted in a state of
emergency.
FISCAL EFFECT:
1)Minor and absorbable administrative costs to the Franchise Tax
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Board.
2)Minimal expected GF revenue decrease.
COMMENTS:
1)Purpose. According to the author, this bill allows taxpayers
that suffered from the 2014 Napa earthquake to apply losses to
their tax returns filed the previous year, and expands state
disaster loss treatment for state tax purposes to taxpayers in
Sonoma County. The author contends the Legislature has
enacted identical treatment for almost every significant
disaster that has occurred in California for the past 25
years.
2)Sonoma County Relief. Currently, a taxpayer may elect to file
an amended return to deduct a disaster loss in the year the
loss occurred, resulting in an expedited refund, if the
President has declared a disaster. The election is not
available for disasters declared only by the Governor unless
the Legislature has enacted specific legislation with respect
to that disaster. On August 24, 2014, the Governor declared a
state of emergency for Napa, Solano, and Sonoma Counties;
however, the President's declaration on September 11, 2014
included only Napa and Solano Counties. This bill extends
state tax relief, but not federal relief, for disaster losses
to taxpayers in Sonoma County.
3)Lasting Solution. While this bill effectively provides
disaster loss relief to Sonoma County, it also provides a
broader, automatic disaster loss relief to any area proclaimed
by the Governor to be in a state of emergency. As a result,
special legislation for Governor-declared disasters would no
longer be necessary to enable taxpayers to claim disaster
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losses, expediting economic assistance to affected areas and,
hopefully, hastening recovery.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081