BILL NUMBER: AB 2686	CHAPTERED
	BILL TEXT

	CHAPTER  349
	FILED WITH SECRETARY OF STATE  SEPTEMBER 17, 2012
	APPROVED BY GOVERNOR  SEPTEMBER 17, 2012
	PASSED THE SENATE  AUGUST 22, 2012
	PASSED THE ASSEMBLY  AUGUST 27, 2012
	AMENDED IN SENATE  AUGUST 14, 2012
	AMENDED IN SENATE  JULY 5, 2012

INTRODUCED BY   Committee on Revenue and Taxation (Perea (Chair),
Beall, Charles Calderon, Cedillo, Fuentes, and Gordon)

                        MARCH 12, 2012

   An act to amend, repeal, and add Section 21004 of the Revenue and
Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2686, Committee on Revenue and Taxation.  Franchise Tax Board:
Taxpayers' Rights Advocate.
   The Katz-Harris Taxpayers' Bill of Rights Act establishes the
position of Taxpayers' Rights Advocate and provides specified
protections for taxpayers for purposes of, among other things,
determining their correct tax liability.
   This bill would, beginning on and after January 1, 2013, and until
January 1, 2016, authorize the Taxpayers' Rights Advocate to abate
penalties, fees, additions to tax, or interest attributable to error
of the Franchise Tax Board, as specified. This bill would require any
relief granted in which the total reduction exceeds $500, as
adjusted, to be submitted to the executive officer of the board for
concurrence, and would limit the total relief granted to $7,500, as
adjusted.


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

  SECTION 1.  Section 21004 of the Revenue and Taxation Code is
amended to read:
   21004.  (a) The board shall establish the position of the
Taxpayers' Rights Advocate. The advocate or his or her designee shall
be responsible for coordinating resolution of taxpayer complaints
and problems, including any taxpayer complaints regarding
unsatisfactory treatment of taxpayers by board employees. The
advocate shall report directly to the executive officer of the board.

   (b) The advocate or his or her designee shall give highest
priority to reviewing and taking prompt and appropriate action,
including staying actions where taxpayers have suffered or will
suffer irreparable loss as the result of board action. Applicable
statutes of limitation shall be tolled during the pendency of a stay.
Any penalties and interest which would otherwise accrue shall not be
affected by the granting of a stay.
   (c) (1) On and after January 1, 2013, the advocate may review any
application for relief pursuant to this subdivision and abate any
penalties, fees, additions to tax, or interest assessed on a
taxpayer, if it is determined by the advocate that the penalties,
fees, additions to tax, or interest that have been assessed, or any
part thereof, is attributable to any of the following:
   (A) Erroneous action or erroneous inaction by the board in
processing documents filed or payments made by taxpayers.
   (B) Unreasonable delay caused by the board.
   (C) Erroneous written advice that does not qualify for relief
under Section 21012.
   (2) Relief may be granted pursuant to this subdivision only if no
significant aspect of that error or delay can be attributed to the
taxpayer involved and relief is not available under any other
provision of this part, Part 10 (commencing with Section 17001), or
Part 11 (commencing with Section 23001), including any relief granted
under any regulation or other administrative pronouncement of the
board.
   (3) (A) (i) Any relief granted pursuant to this subdivision in
which the total reduction in penalties, fees, additions to tax, or
interest exceeds five hundred dollars ($500) shall be submitted to
the executive officer for concurrence.
   (ii) The total relief granted pursuant to this subdivision may not
exceed seven thousand five hundred dollars ($7,500).
   (B) Whenever relief is granted under this subdivision, there shall
be placed on file in the office of the executive officer of the
board a public record with respect to that relief. The public record
shall include the following:
   (i) The taxpayer's name.
   (ii) The total amount involved.
   (iii) The amount payable or refundable due to the error or delay.
   (iv) A summary of why the relief is warranted.
   (4) A refund may be paid as a result of relief granted under this
subdivision only if the applicable statute of limitations, with
respect to filing a claim for refund, remains open as of the date
that the basis for providing relief, as authorized in subparagraphs
(A) to (C), inclusive, of paragraph (1), as reflected in a written
communication received by the advocate.
   (d) No other entity may participate in the grant or denial of
relief pursuant to this section.
   (e) On January 1 of each calendar year beginning on or after
January 1, 2009, the board shall increase the amount specified in
subparagraph (A) of paragraph (3) of subdivision (c) to the amount
computed under this subdivision. That adjustment shall be made as
follows:
   (1) The Department of Industrial Relations shall transmit annually
to the board the percentage change in the California Consumer Price
Index for All Urban Consumers, as modified for rental equivalent home
ownership for all items, from June of the prior calendar year to
June of the current calendar year, no later than August 1 of the
current calendar year.
   (2) The board shall then:
   (A) Compute the percentage change in the California Consumer Price
Index for All Urban Consumers from the later of June 2008 or June of
the calendar year prior to the last increase in the amount specified
in paragraph (1).
   (B) Compute the inflation adjustment factor by adding 100 percent
to the percentage change so computed, and converting the resulting
percentage to the decimal equivalent.
   (C) Multiply the amount specified in paragraph (1) for the
immediately preceding calendar year, as adjusted under this
subparagraph, by the inflation adjustment factor determined in
subparagraph (B), and round off the resulting product to the nearest
one hundred dollars ($100).
   (f) Notwithstanding any other law or rule of law, all
determinations made under paragraph (1) of subdivision (c) shall not
be subject to review in any administrative or judicial proceeding.
   (g) The amendments made by the act adding this subdivision shall
become operative on January 1, 2013.
   (h) This section shall remain in effect only until January 1,
2016, and as of that date is repealed.
  SEC. 2.  Section 21004 is added to the Revenue and Taxation Code,
to read:
   21004.  (a) The board shall establish the position of the
Taxpayers' Rights Advocate. The advocate or his or her designee shall
be responsible for coordinating resolution of taxpayer complaints
and problems, including any taxpayer complaints regarding
unsatisfactory treatment of taxpayers by board employees. The
advocate shall report directly to the executive officer of the board.

   (b) The advocate or his or her designee shall give highest
priority to reviewing and taking prompt and appropriate action,
including staying actions where taxpayers have suffered or will
suffer irreparable loss as the result of board action. Applicable
statutes of limitation shall be tolled during the pendency of a stay.
Any penalties and interest which would otherwise accrue shall not be
affected by the granting of a stay.
   (c) This section shall become operative on January 1, 2016.