BILL ANALYSIS                                                                                                                                                                                                    �



                                                               SB 1015
                                                               Page  1


       SENATE THIRD READING
       SB 1015 (Budget and Fiscal Review Committee)
       As Amended  June 25, 2012
       Majority vote.  Budget Bill Appropriation Takes Effect Immediately 

        SENATE VOTE  :Vote not relevant  
        
        SUMMARY  :  Contains the necessary changes to enact the 2012-13 Budget 
       relating to revenue enforcement.  The provision in this bill provide 
       $38 million in General Fund solutions, which are included in the 
       budget package.  Specifically,  this bill  :

       1)Expedites and reduces the costs associated with the earnings 
         withhold process by expanding the term "state tax liability" to 
         include any liability under the Personal Income Tax Law, Corporation 
         Tax Law, or specified franchise and income tax provisions that is 
         due and payable and that remains unpaid.  The proposal would save 
         the administrative cost associated with recording a lien.  It would 
         also allow the tax agency to collect tax liabilities that are over 
         10 years old.  (Tax debts over 10 years old expire unless renewed by 
         recording a lien).  The change is expected to result in additional 
         General Fund revenues of $11 million in the current year and $27 
         million in 2012-13.

       2)Confirms that current law with respect to apportionment of 
         corporation income is pursuant to an original return, repeals all 
         provisions related to the Multistate Tax Compact resulting in 
         budgetary savings of $0.5 million, and adopts non-inference language 
         regarding this action.

       3)Expands the use of a Financial Institution Records Match (FIRM).  
         Authorizes the expansion of the FIRM program to the Employment 
         Development Department (EDD) and Board of Equalization (BOE).  The 
         2011 Budget Act authorized the Franchise Tax Board (FTB) to operate 
         and administer FIRM and utilize automated data exchanges to identify 
         accounts of delinquent tax debtors held at financial institutions 
         doing business in California.  The FTB estimated that the use of 
         FIRM would generate $30 million in additional General Fund revenues 
         in 2011-12.  Expanding the FIRM program to tax programs administered 
         by EDD and BOE, is expected to result in additional General Fund 
         revenues of $4 million in 2011-12 and $11 million in 2012-13. 

       4)Contains an appropriation allowing this bill to take effect 
         immediately upon enactment.








                                                               SB 1015
                                                               Page  2



        FISCAL EFFECT  :  The measure will result in additional General Fund 
       revenues of $11 million in 2012-13 and $27 million in 2012-13.  These 
       revenues are assumed in the 2012-13 budget package.

        COMMENTS  :  This budget trailer bill includes revenue enforcement 
       mechanism necessary to achieve $38 million of solutions assumed in the 
       2012-13 budget package.


        Analysis Prepared by  :   Christian Griffith / BUDGET / (916) 319-2099


                                                                   FN: 0004242