BILL NUMBER: AB 2605 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 1, 2010
AMENDED IN ASSEMBLY APRIL 27, 2010
INTRODUCED BY Assembly Member De La Torre
FEBRUARY 19, 2010
An act to amend Section 19525 of the Revenue and Taxation
Code, relating to taxation. An act to amend Section
14670.13 of the Government Code, relating to state property.
LEGISLATIVE COUNSEL'S DIGEST
AB 2605, as amended, De La Torre. Income and corporation
taxes: fraud reporting: reward program. State
property: sales.
(1) Existing law, enacted in 2009, authorized the sale or lease of
specified real property or buildings, or both, in Los Angeles,
Oakland, Rancho Cordova, Sacramento, San Francisco, and Santa Rosa.
Existing law authorizes the Director of General Services to determine
the terms and conditions that are to be imposed upon that sale or
lease, for the best interests of the state.
This bill would require the Director of General Services, at least
30 days prior to executing a transaction for a sale or lease as
described above, to submit to the chairs of the fiscal committees of
the Legislature an analysis of the transaction comparing the costs
and benefits to the state of a sale or lease of the real property or
building to continued ownership over a 50-year period. The bill would
prohibit the real property or buildings from being sold or leased
until the Legislature determines that the transaction is in the best
interests of the state, makes a finding to this effect, and
explicitly authorizes the sale by statute.
Existing tax laws impose various taxes and fees, and authorize the
Franchise Tax Board to administer the assessment, audit, and
collection of various taxes and fees. Existing law authorizes the
Franchise Tax Board to establish a reward program for information
resulting in the identification of underreported or unreported income
subject to taxes.
This bill would instead require the Franchise Tax Board to
establish a reward program under specified circumstances where, if
the Franchise Tax Board proceeds with an administrative or judicial
action based on information brought to the board's attention by an
individual, the individual would receive a percentage of any
collected proceeds, as defined, of the administrative action,
judicial action, or settlement in response to that action. This bill
would apply only to information that is initially received by the
Franchise Tax Board on or after January 1, 2011. This bill would
require the information provided to the board to be submitted under
the penalty of perjury.
This bill, by expanding the definition of an existing crime, would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14670.13 of the
Government Code is amended to read:
14670.13. (a) Notwithstanding any other law, but subject to the
conditions specified in subdivision
subdivisions (c) and (e) , the Department of General
Services may enter into a sale or long-term lease of the properties
specified in subdivision (b). A sale or long-term lease entered into
pursuant to this section may include an option for the state to
repurchase that property or building, or both. The
Subject to the limitations of this section, the Director
of General Services may determine the other terms and conditions that
shall be imposed upon that sale or lease, for the best
interest interests of the state. Any sale of
property pursuant to this section shall be for no less than fair
market value.
(b) The Subject to the conditions
specified in subdivisions (c) and (e), the Department of
General Services may enter into a sale or long-term lease pursuant to
this section for any, or all, of the following real properties or
buildings, or both:
(1) The Attorney General Building located at 1300 I Street in the
City of Sacramento.
(2) The California Emergency Management Agency Building located at
3650 Schreiver Schriever Avenue in the
City of Rancho Cordova.
(3) The Capitol Area East End Complex, located in the City of
Sacramento, at all of the following locations:
(A) Block 225 located at 1430 N Street in the City of Sacramento.
(B) Block 171 located at 1501 Capitol Avenue in the City of
Sacramento.
(C) Block 172 located at 1500 Capitol Avenue in the City of
Sacramento.
(D) Block 173 located at 1615 Capitol Avenue in the City of
Sacramento.
(E) Block 174 located at 1616 Capitol Avenue in the City of
Sacramento.
(F) The parking facility located at 1214 17th Street in the City
of Sacramento.
(4) The Elihu M. Harris Building located at 1515 Clay Street in
the City of Oakland.
(5) The Franchise Tax Board Complex located at 9645 Butterfield
Way in the City of Sacramento.
(6) The San Francisco Civic Center, also known as the Earl
Warren / Hiram Warren/Hiram Johnson
Building, at both of the following locations:
(A) 350 McAllister Street in the City and County of San Francisco.
(B) 455 Golden Gate Avenue in the City and County of San
Francisco.
(7) The New Junipero Serra State Building located at 320 West 4th
Street in the City of Los Angeles.
(8) The Department of Justice Building located at 4949 Broadway in
the City of Sacramento.
(9) The Public Utilities Commission Building, also known as the
Governor Edmund G. "Pat" Brown Building, located at 505 Van Ness
Avenue in the City and County of San Francisco.
(10) The Judge Joseph A. Rattigan Building located at 50 D Street
in the City of Santa Rosa.
(11) The Ronald Reagan State Building located at 300 South Spring
Street in the City of Los Angeles.
(c) (1) The Legislature hereby finds and declares it may be
infeasible to sell or lease the real property or buildings listed in
subdivision (b), if the real property or buildings have outstanding
lease revenue bonds due to bond covenants, market disclosure issues,
and federal tax regulations and the bonds cannot be defeased or
otherwise retired.
(2) If the proceeds of a sale subject to this section will be used
to defease or otherwise retire lease revenue bonds on real property
or a building listed in subdivision (b), the proceeds in an amount
necessary to defease or retire the bonds are hereby appropriated to
the Department of General Services, and the Department of General
Services may sell that building or real property pursuant to this
section, including a fee simple sale or the sale of a lesser property
interest, such as a long-term lease of the real property, only if
the issuer and trustee for the bonds approves the sale transaction
and this approval takes into consideration, among other things, that
the proposed sale transaction will not breach any covenant or
obligation of the issuer or trustee.
(d) The disposition of the real properties or buildings, or both,
pursuant to this section does not constitute a sale or other
disposition of surplus state property within the meaning of Section 9
of Article III of the California Constitution and shall not be
subject to subdivision (g) of Section 11011.
(e) (1) Thirty days prior to executing a
transaction for a sale or lease of any of the real property or
buildings listed in subdivision (b), the Director of General Services
shall report to the chairs of the fiscal committees of the
Legislature the terms and conditions of the transaction, including,
but not limited to, the financial terms.
(2) At least 30 days prior to executing a transaction for a sale
or lease of any of the real property or buildings listed in
subdivision (b), the Director of General Services shall submit to the
chairpersons of the fiscal committees of the Legislature an analysis
of the transaction comparing the costs and benefits to the state of
a sale or lease of the real property or building to the continued
ownership of the real property or building over a 50-year period. The
real property or buildings shall not be sold or leased until the
Legislature determines that the transaction is in the best interests
of the state, makes a finding to this effect, and explicitly
authorizes the sale by statute.
(f) Commencing in 2010, on or before June 30 of each year
following the enactment of this section, the Director of General
Services shall report the status of any completed or pending sales
pursuant to this section to the fiscal committees of the Legislature.
(g) (1) The Department of General Services shall be reimbursed for
any reasonable costs or expenses incurred pursuant to this section.
(2) All issuer- and trustee-related costs of reviewing any
proposed sale transaction, and all costs related to the defeasance or
other retirement of any bonds, including the cost of nationally
recognized bond counsel, shall be paid from the proceeds of a sale or
lease conducted pursuant to this section.
(3) The Department of General Services shall deposit in the
General Fund the net proceeds from the sale or long-term lease of the
real properties or buildings leases, or both, made pursuant to this
section, after deducting the amount of reimbursement for costs
incurred pursuant to this section or the reimbursement of adjustments
to the General Fund loan.
(h) (1) The disposition of state real property or buildings
specified in subdivision (b) that are made on an "as is" basis shall
be exempt from Chapter 3 (commencing with Section 21100) to Chapter 6
(commencing with Section 21165), inclusive, of Division 13 of the
Public Resources Code. Upon title to the parcel vesting in the
purchaser or transferee of the property, the purchaser or transferee
shall be subject to any local governmental land use entitlement
approval requirements and to Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code.
(2) If the disposition of state real property or buildings
specified in subdivision (b) is not made on an "as is" basis and
close of escrow is contingent on the satisfaction of a local
governmental land use entitlement approval requirement or compliance
by the local government with Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code, the execution of the
purchase and sale agreement or of the exchange agreement by all
parties to the agreement shall be exempt from Chapter 3 (commencing
with Section 21100) to Chapter 6 (commencing with Section 21165),
inclusive, of Division 13 of the Public Resources Code.
(3) For the purposes of this subdivision, "disposition" means the
sale, lease or repurchase of state property or buildings specified in
subdivision (b).
SECTION 1. Section 19525 of the Revenue and
Taxation Code is amended to read:
19525. (a) The Franchise Tax Board, under regulations prescribed
by the Franchise Tax Board, shall establish a reward program for
information resulting in the identification of underreported or
unreported income subject to taxes imposed by Part 10 (commencing
with Section 17001) or Part 11 (commencing with Section 23001).
(b) (1) If the Franchise Tax Board proceeds with an administrative
or judicial action based on information brought to the Franchise Tax
Board's attention by an individual, the individual shall, subject to
paragraph (2), receive as a reward 25 percent of the collected
proceeds of the administrative or judicial action, or related action,
or from any settlement in response to that action, not to exceed two
hundred fifty thousand dollars ($250,000).
(2) (A) In the event the administrative or judicial action is one
which the Franchise Tax Board determines to be based principally on
disclosures of specified allegations arising from an administrative
or judicial hearing, from a governmental report, hearing, audit, or
investigation, or from the news media, the Franchise Tax Board may
award 10 percent of the collected proceeds resulting from the
administrative or judicial action, or related action, or from any
settlement in response to that action, not to exceed one hundred
thousand dollars ($100,000). In determining the reward amount, the
Franchise Tax Board shall take into account the significance of the
individual's information and the role of the individual, and any
legal representative of the individual, in contributing to the
administrative hearing, judicial hearing, or settlement.
(B) The reward limitation described in this paragraph shall not
apply if the information resulting in the administrative or judicial
action was originally provided by the individual.
(c) The reward program shall apply to administrative or judicial
actions against any taxpayer whose tax liability arose under Part 10
(commencing with Section 17001) or Part 11 (commencing with Section
23001), but in the case of a person whose income is subject to taxes
under Part 10 (commencing with Section 17001), only if the person's
gross income as adjusted exceeds two hundred fifty thousand dollars
($250,000) for any taxable year subject to the administrative or
judicial action and the tax, penalties, interest, additions to tax,
and additional amounts in dispute in the administrative or judicial
action exceed two million dollars ($2,000,000). Whether the amount in
dispute exceeds two million dollars ($2,000,000) shall be determined
by the Franchise Tax Board after the administrative or judicial
action has been finalized by the Franchise Tax Board.
(d) For purposes of this section, "collected proceeds" includes,
but is not limited to, penalties, interest, additions to tax, and any
additional amounts.
(e) A contract with the Franchise Tax Board shall not be necessary
for any individual to receive a reward under this section.
(f) An individual who may receive a reward under this section may
be represented by counsel.
(g) Any individual employed or formerly employed by or under
contract with any state or federal tax collection agency shall not be
eligible for a reward provided for pursuant to this section.
(h) No reward shall be made under this section based on
information submitted to the Franchise Tax Board unless the
information is submitted under penalty of perjury.
(i) The Franchise Tax Board shall pay the reward amount 60 days
after the last of the following has occurred:
(1) The collected proceeds resulting from the administrative or
judicial action, or related action, or from any settlement in
response to that action are deposited into the General Fund.
(2) All legal remedies have been exhausted.
(3) The statute of limitations for filing a claim for refund for,
or otherwise for contesting, any tax or penalty has expired.
(j) The Franchise Tax Board shall have full discretion in
determining whether the information provided by and individual
warrants further investigation.
(k) The amendments made to this section by the act adding this
subdivision shall apply to information resulting in the
identification of underreported or unreported income subject to taxes
imposed by Part 10 (commencing with Section 17001) or Part 11
(commencing with Section 23001) that is initially received by the
Franchise Tax Board on and after January 1, 2011. Any information
resulting in the identification of underreported or unreported income
subject to taxes imposed by Part 10 (commencing with Section 17001)
or Part 11 (commencing with Section 23001) that was received by the
Franchise Tax Board before January 1, 2011, shall not be eligible for
the reward program.
SEC. 2. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.