BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1158
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 1158 (Price) - As Amended:  June 20, 2012 

          Policy Committee:                             Revenue and 
          Taxation     Vote:                            8-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill allows the Franchise Tax Board (FTB), upon a 
          taxpayer's written request, to abate specified interest to the 
          extent the interest is attributable to the FTB's delay in 
          mailing a notice or other correspondence requiring a response, 
          in connection with a presidentially declared disaster area, or 
          any county or city proclaimed by the governor to be in a state 
          of emergency.  Specifically, this bill:

          1)Applies to interest on any deficiency, a specified proposed 
            deficiency or a payment of tax.

          2)Provides that, if the FTB determines not to abate interest, 
            the taxpayer may appeal the FTB's decision to the State Board 
            of Equalization (BOE), as specified.

           FISCAL EFFECT  

          Minor revenue losses of $50,000 annually, depending on the 
          number and extent of declared disasters.

           COMMENTS  

           1)Purpose  .  The author notes SB 1158 is needed to provide 
            equitable treatment to all taxpayers located in disaster areas 
            as proclaimed by either the president or the governor.  

           2)Background  .  Federal law regarding disasters, to which 
            California generally conforms, authorizes the postponement of 
            certain tax-related deadlines for taxpayers affected by a 
            federally declared disaster.  SB 1158 would extend the 








                                                                  SB 1158
                                                                  Page  2

            provisions of federal law to any taxpayer that the FTB 
            determines is affected by a state of emergency declared by the 
            Governor.  Although FTB currently possesses the authority to 
            grant a reasonable extension of time for filing a return, 
            existing law does not authorize the FTB to extend the 
            deadlines for filing an appeal, protest or claim for refund in 
            the event of a disaster.  

            This bill's second provision would allow the FTB to abate 
            specified interest to the extent it is attributable to the 
            FTB's delay in mailing notices in connection with a disaster 
            declared by either the president or governor.  The FTB notes 
            during disasters, the FTB routinely delays billings, notices 
            and correspondence to affected individuals and business 
            entities within the disaster area.  As a result of the delayed 
            mailings, taxpayers who are unaffected by the disaster, but 
            engaged in the administrative audit, protest or appeal 
            process, suffer delays in that process, which ultimately could 
            result in additional interest being accrued.  Under current 
            law, the FTB lacks the authority to abate the interest in 
            these instances.   




           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081