BILL NUMBER: AB 2048	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 9, 2012

INTRODUCED BY   Assembly Member Donnelly

                        FEBRUARY 23, 2012

   An act to amend Section 6591.5 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2048, as amended, Donnelly. State Board of Equalization:
administration: interest.
   The Sales and Use Tax Law, and other laws by reference to that
law, provide that interest is paid by taxpayers and feepayers with
respect to underpayments of various taxes, surcharges, and fees at a
modified adjusted rate per annum, as defined by reference to a
specified federal statute, and that interest is paid to taxpayers and
feepayers with respect to overpayments of various taxes, surcharges,
and fees as determined in accordance with a specified federal
statute, which requires that the rate paid on overpayments be based
on the rate of 13-week treasury bills, as specified.
   This bill would  instead   revise the
definition of "modified adjusted rate per   annum," which
would thereby  require that interest on overpayments be
determined in the same manner as interest on underpayments is 
now  determined.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 6591.5 of the Revenue and Taxation Code is
amended to read:
   6591.5.  (a) "Modified adjusted rate per annum" means the 
adjusted annual rate established pursuant to subdivision (c), plus
three percentage points.   rate determined in accordance
with the provisions of Section 6621(a)(2) of the Internal Revenue
Code, which establishes the underpayment rate under that code, plus
three percentage points, except its reference to Section 6621(b) of
the Internal Revenue Code, and the determination therein, shall be
modified to be determined semiannually as follows:  
   (1) The rate for January shall apply for the following July 1 to
December 31, inclusive.  
   (2) The rate for July shall apply for the following January 1 to
June 30, inclusive. 
   (b) "Modified adjusted rate per month, or fraction thereof" means
the modified adjusted rate per annum divided by 12. 
   (c) The rate established for interest to be paid upon
underpayments of tax shall be determined in accordance with the
provisions of Section 6621(a)(2) of the Internal Revenue Code, which
establishes the underpayment rate under that code, except its
reference to Section 6621(b) of the Internal Revenue Code, and the
determination therein, shall be modified to be determined
semiannually as follows:  
   (1) The rate for January shall apply for the following July 1 to
December 31, inclusive.  
   (2) The rate for July shall apply for the following January 1 to
June 30, inclusive.  
   (d) The rate established for interest to be paid on overpayments
of tax shall be determined in accordance with subdivision (c).
 
   (e) 
    (c)  For purposes of this part, and any other provision
of law referencing this method of computation, in computing the
amount of any interest required to be paid by the state or by the
taxpayer, or any other amount determined by reference to that amount
of interest, that interest and that amount shall be computed as
simple interest, not compound interest.