Today's Law As Amended


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AB-1963 Income taxes: sales and use taxes: Legislative Analyst’s Office: report.(2011-2012)



As Amends the Law Today


SECTION 1.

 Section 38 of the Revenue and Taxation Code is repealed.

38.
 (a) The Legislative Analyst shall submit a report to the Legislature regarding the possible consolidation of the remittance processing and cashiering functions and the mail processing operations, of the Franchise Tax Board, the State Board of Equalization, and the Employment Development Department.
(b) The Franchise Tax Board, the State Board of Equalization, and the Employment Development Department shall provide the Legislative Analyst all data and information that the Legislative Analyst identifies as necessary for completing the report and shall assist the Legislative Analyst in the preparation of the report. The information provided to the Legislative Analyst shall include, but not be limited to, an evaluation of the short- and long-term fiscal and budgetary advantages and disadvantages that would result from the proposed consolidation of the remittance processing and cashiering functions and the mail processing functions of, the Franchise Tax Board, the State Board of Equalization, and the Employment Development Department. Any data and information requested by the Legislative Analyst shall be submitted on or before July 1, 2004.
(c) The purpose of the report required by this section is to determine, to the extent possible and based on available information and reasonable assumptions, if there are any benefits to the consolidation of the management and control of these operations based on all of the following criteria:
(1) The elimination of duplicative functions and fragmented responsibilities.
(2) Increased operational efficiencies due to the use of improved technologies and economies of scale.
(3) Additional interest earnings for the state.
(d) For purposes of this section, “remittance processing and cashiering” means receiving, batching, balancing, and depositing remittances.
(e) The Legislative Analyst shall provide to the Legislature its report and any recommendations and considerations with regard to the possible consolidation of these functions by November 1, 2004.
SEC. 2.
 (a) It is the intent of the Legislature to reduce General Fund revenue volatility, as identified in the January 2005 report by the Legislative Analyst’s Office. To achieve this objective, the Legislature must have an analysis of the methods by which a reduction in revenue volatility may be achieved without a reduction or increase in the total available revenue.
(b) On or before July 1, 2013, the Legislative Analyst’s Office shall submit a report to the Legislature assessing potential changes to the state income and sales and use tax laws in order to reduce revenue volatility, diversify revenue sources, and improve California’s economic climate. The report shall include, but is not limited to, the following:
(1) A review of California’s current and historical revenue volatility, including, but not limited to, the percentage of the gross state product that is made up by the General Fund budget over a period of 10 years.
(2) Proposals for tax reforms that would end California’s revenue volatility, are sum revenue neutral, and do not require amendments to, or revisions of, the California Constitution. To the extent possible, the Legislative Analyst shall use dynamic revenue modeling in determining viable proposals in order to provide an accurate picture of the impact any proposed tax reforms would have on state revenues.
(3) An explanation of the calculations needed to determine revenue neutrality.
(4) An analysis of the effect a reduction of taxation on individual income would have upon state revenues and revenue volatility.
(5) An analysis of the effect of imposing a tax on the sale or use of services, concurrent with a reduction of the sales and use tax rate, would have upon state revenues and revenue volatility. This analysis shall include whether a credit or exemption to the services tax should apply to the sale of services between businesses. This analysis shall also include the positive or negative revenue impact of excluding the following services from a tax on services:
(A) Necessary or licensed medical services.
(B) Services related to education.
(C) Automotive repair services.
(D) Accounting, auditing, and other services provided by licensed accountants or licensed accounting firms.
(E) Legal services provided by licensed attorneys.
(F) Services related to agriculture and livestock.
(G) Services related to housing, real estate, and construction.
(H) Services related to banking.
(I) Securities and investment management services.