BILL ANALYSIS �
AB 2014
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Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2014 (Alejo) - As Amended: April 8, 2014
Policy Committee: Revenue &
TaxationVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill is designed to create an incentive for California
residents who are not eligible for a social security number to
file state income taxes, and potentially provide relief from
deportation to undocumented immigrants who live in California.
Specifically, this bill:
1)Directs the Franchise Tax Board (FTB) to advertise the
availability of filing a state income tax return using an
individual taxpayer identification number (ITIN) by a
California resident who is not eligible to receive a social
security number (SSN).
2)Requires the FTB and other state and local government agencies
to keep confidential the identity of any natural person who
has filed a state income tax return using an ITIN absent a
court order or statutory authorization, unless the FTB has
cause to believe the person has or is eligible for a SSN and
is fraudulently filing the return using an ITIN. This bill
further requires the FTB to:
a) Undertake enforcement action as necessary to ensure the
confidentiality of information regarding taxpayers filing
using ITIN.
b) Collaborate with the Department of Justice to draft any
necessary regulations relating to the administration of
these provisions.
3)Requires the FTB to issue a receipt or proof of filing to a
taxpayer who has filed a state income tax return using an ITIN
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for taxable years beginning on or after January 1, 2014.
4)Requires the FTB to submit an annual report to the Legislature
and Governor concerning the number of natural persons who have
filed state income tax returns and taxable income reported and
paid by those persons.
5)Directs the Governor, on or after July 1, 2015, as a
ministerial act on behalf of the state, to request that the
President:
a) Direct relevant federal agencies to not expend resources
in California on the apprehension, detention, or removal of
any person unless the person meets certain priority
enforcement criteria established in civil immigration
enforcement policy.
b) Provide any available waivers, exemptions, or
authorizations to provide relief from removal for any
persons who have filed a state income tax return using an
ITIN and can demonstrate that filing by presenting receipt
or proof of filing, unless that person meets certain
priority enforcement criteria established in civil
immigration enforcement policy.
The bill requires these requests be renewed annually until
the federal government enacts
legislation addressing the status of undocumented persons who
have lived continuously and
without significant criminal history in California and other
states.
FISCAL EFFECT
1)Unknown, but potentially significant (well in excess of
$150,000 to GF) costs to FTB to implement the advertising,
enforcement, reporting, rulemaking, and proof of filing
requirements needed to effect the aims of this bill.
2)Potential increase to revenue, however current law already
allows taxpayers to file a state income tax return using an
ITIN.
COMMENTS
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1) Purpose. According to supporters, AB 2014 establishes a
framework for undocumented workers in California to use ITINs
to "emerge from the shadows" and contribute to the tax revenue
of the state. The supporters argue the legislation is needed
now in particular as US Congressional efforts to reform
immigration have stalled.
2) ITINs. In the 1960s, federal agencies began adopting the SSN
as a governmental identifier, and state government use of the
SSN for recordkeeping purposes increased thereafter. The
Internal Revenue Service issues an ITIN to individuals who are
required to have a US taxpayer identification number to file a
federal personal income tax return, but who are ineligible to
obtain a SSN. California uses the SSN and the ITIN for
recordkeeping of individual income tax accounts in conformity
with federal law. Current state law allows a taxpayer to file
an income tax return with the FTB using either a SSN or an
ITIN.
3) Federal Enforcement Discretion. The two primary federal
immigration enforcement agencies, the United States
Immigration and Customs Enforcement (ICE) and the Department
of Homeland Security (DHS), regularly exercise discretion in
enforcing US immigration laws. In recent years, both the ICE
and DHS have announced a retreat from enforcing US immigration
laws against certain classes of people who pose little or no
risk to national security, such as people brought to the US as
young children. DHS specifically created a process for two
year "deferred action" for those individuals who meet certain
criteria, making them eligible to apply for work
authorization.
4) Roadmap to Deportation? Although this bill seeks to obtain
preferential treatment for those undocumented immigrants who
voluntarily comply with state tax filing obligations, it also
creates an organized record of those undocumented immigrants,
protected from disclosure with only a court order requirement.
The Committee may wish to consider whether this bill further
imperils undocumented workers in the case the federal
government fails to provide preferential treatment to those
who file or embrace more comprehensive immigration reform.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081
AB 2014
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