BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 2195|
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                                    CONSENT


          Bill No:  AB 2195
          Author:   Silva (R)
          Amended:  4/21/10 in Assembly
          Vote:     21

           
           SENATE REVENUE & TAXATION COMMITTEE  :  3-0, 6/23/10
          AYES:  Wolk, Alquist, Padilla
          NO VOTE RECORDED:  Walters, Ashburn

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8
           
          ASSEMBLY FLOOR  :  76-0, 5/13/10 (Consent) - See last page  
            for vote


           SUBJECT  :    Board of Equalization:  penalty

           SOURCE  :     Howard Jarvis Taxpayers Association


          DIGEST  :    This bill codifies existing case law and Board  
          of Equalization (BOE) practices by providing, for purposes  
          of the taxes and fees administered by BOE, that BOE has the  
          burden of proof, by clear and convincing evidence, when  
          claiming intent to evade or fraud by a taxpayer in a civil  
          proceeding. 

           ANALYSIS  :    Existing state law generally imposes the  
          burden of proof on the taxpayer for most items where the  
          taxpayer disputes a proposed assessment or claims a refund  
          of tax.  Exceptions to this general burden of proof  
          standard exist in cases involving civil penalties and  
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                                                               AB 2195
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          criminal convictions.  With regard to taxes administered by  
          the Franchise Tax Board, the state conforms to federal law  
          and regulations relating to income taxes, which place the  
          burden of proof on the tax collection agency to sustain a  
          civil penalty in tax related cases.  Similarly, the BOE,  
          through regulation, has applied the same standard to civil  
          penalties related to taxes that it administers.  It has  
          done so since January 2003, following a Ninth Circuit Court  
          of Appeals ruling that found clear and convincing evidence  
          must be shown to establish civil tax fraud under California  
          law. 

           Comments  

          The author states:  "This bill conforms the state law to  
          federal law which provides that a taxing agency - not the  
          taxpayer - shall have the burden of proof with respect to  
          factual issues used to determine the liability of a  
          cooperating taxpayer.  This measure codifies existing Board  
          of Equalization (BOE) regulations.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  8/2/10)

          Howard Jarvis Taxpayers Association (source)
          American Council of Engineering Companies
          California Chamber of Commerce


           ASSEMBLY FLOOR  : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Bass, Beall,  
            Bill Berryhill, Tom Berryhill, Blakeslee, Block,  
            Blumenfield, Bradford, Brownley, Buchanan, Charles  
            Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De  
            La Torre, De Leon, DeVore, Emmerson, Eng, Evans, Feuer,  
            Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines,  
            Galgiani, Garrick, Gilmore, Hagman, Hall, Harkey,  
            Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries,  
            Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma,  
            Mendoza, Miller, Monning, Nava, Nestande, Niello,  
            Nielsen, V. Manuel Perez, Portantino, Ruskin, Salas,  
            Saldana, Silva, Smyth, Solorio, Audra Strickland,  







                                                               AB 2195
                                                                Page  
          3

            Swanson, Torlakson, Torres, Torrico, Tran, Villines,  
            Yamada, John A. Perez
          NO VOTE RECORDED:  Caballero, Norby, Skinner, Vacancy

          DLW:mw  8/3/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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