Bill Text: CA SB1436 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: California Tax Policy Oversight Board.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-05-16 - May 16 hearing: Held in committee and under submission. [SB1436 Detail]

Download: California-2023-SB1436-Amended.html

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Amended  IN  Senate  April 04, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 1436

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Introduced by Senator Allen

February 16, 2024

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An act to amend Sections 12803.2 and 15670 of, and to add Sections 15570.5 and 15681 to, Section 12803.2 of, and to add Part 8.6 (commencing with Section 15565) to Division 3 of Title 2 of, the Government Code, relating to state government.

LEGISLATIVE COUNSEL'S DIGEST

SB 1436, as amended, Allen. California Department of Tax and Fee Administration Board: Office of Tax Appeals Board. Tax Policy Oversight Board.

Existing law establishes the California Department of Tax and Fee Administration (CDTFA) in the Government Operations Agency (CDTFA), the State Board of Equalization (BOE), and the Franchise Tax Board (FTB) to administer specified taxes. Existing law establishes in state government the Office of Tax Appeals (OTA) to conduct tax appeals hearings. Existing law requires that the director of the OTA administer and direct the day-to-day operations of the office, including that each hearing office is sufficiently staffed and that appeals hearings are heard and resolved in a timely and efficient manner. Existing law prohibits the director from being involved in the decisionmaking process of tax appeal panels.

This bill would establish in the Government Operations Agency the California Department of Tax and Fee Board and the Office of Tax Appeal Board to oversee the policy direction of the CDTA and the OTA, respectively, as specified. The bill would require the boards to consist Tax Policy Oversight Board, consisting of the Controller, Director of Finance, and Chairperson of the State Board of Equalization. Equalization, the Treasurer, and the Secretary of the Government Operations Agency, to work collaboratively with the above-described tax agencies to promote clarity and communication and to consider recommendations regarding input brought by the tax agencies, taxpayers, or other state or local entities, as specified.

This bill would require the boards board to provide transparent, open, and accessible forums, meeting at least two 2 times each year, and would require the boards to report on findings after each hearing, together with recommendations, to all participants, tax agencies, and the Government Operations Agency. Governor. The bill would also require the boards board to issue an annual report on all tax policy issues and recommendations to the Government Operations Agency and to to the Governor and the Legislative Analyst’s office before the end of each fiscal year. Office, as specified.

This bill would require the boards to be under control of a director, and would require the boards recommend a director, a chief deputy director, and a chief counsel to the Governor for appointment, and for the director, subject to confirmation by the Senate. With respect to the California Department of Tax and Fee Board, the bill would specify that the director is responsible for selecting persons for career executive assignment positions and other noncivil service managers.

This bill would specify that the OTA is in the Government Operations Agency and prohibit the director of the Office of Tax Appeals Board from interfering with the decision making process of the tax appeal panels.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 12803.2 of the Government Code is amended to read:

12803.2.

 (a) The Government Operations Agency shall consist of all of the following:

(1) The Office of Administrative Law.

(2) The Public Employees’ Retirement System.

(3) The State Teachers’ Retirement System.

(4) The State Personnel Board.

(5) The California Victim Compensation Board.

(6) The Department of General Services.

(7) The Department of Technology.

(8) The Franchise Tax Board.

(9) The Department of Human Resources.

(10) The California Department of Tax and Fee Administration.

(11) The Office of Data and Innovation, effective July 1, 2023.

(12) The California Department of Tax and Fee Board. Tax Policy Oversight Board.

(13) The Office of Tax Appeals.

(14)The Office of Tax Appeals Board.

(b) The Government Operations Agency shall include the Department of FISCal upon the acceptance of the Financial Information System for California (FISCal) by the state, as determined by the Director of Finance, pursuant to Section 11890.

(c) The Government Operations Agency shall be governed by the Secretary of Government Operations pursuant to Section 12801. However, the Director of Human Resources shall report directly to the Governor on issues relating to labor relations.

(d) The Governor, upon the recommendation of the Secretary of Government Operations, may appoint up to three deputies for the secretary.

SEC. 2.

 Part 8.6 (commencing with Section 15565) is added to Division 3 of Title 2 of the Government Code, immediately following Part 8.5, to read:

PART 8.6. California Tax Policy Oversight Board

15565.

 For purposes of this part:

(a) “Board” means the California Tax Policy Oversight Board.

(b) “Tax agencies” means the Franchise Tax Board, the California Department of Tax and Fee Administration, the State Board of Equalization, and the Office of Tax Appeals.

15566.

 (a) There is in the state government, in the Government Operations Agency, the California Tax Policy Oversight Board, consisting of the Controller, Director of Finance, Chairperson of the State Board of Equalization, the Treasurer, and the Secretary of the Government Operations Agency, vested with the responsibility of providing an open forum for high-level tax policy communication, exchange of concepts and challenges, the receipt of public input on statewide policy issues and concerns, and the reporting of results and recommendations, with respect to the state’s four tax agencies.

(b) (1) The chairperson of the board, who shall be the Controller, shall schedule the meetings of the board and shall collaborate with the tax agencies regarding the date, time, location, and agenda of each meeting.

(2) To minimize costs, the tax agencies shall host the board meetings, carry out the requirements of Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1), and otherwise assist the chairperson and the board in complying with this part. The costs shall be absorbed from existing resources.

15567.

 (a) The board shall work collaboratively with the tax agencies to provide transparent, open, and accessible forums, meeting not less than two times per year, to receive, review, and discuss tax policy concerns of the agencies, public input and proposals, and tax policy challenges, with a focus on helping to improve, coordinate, or enhance tax-related policies, as appropriate, to promote clarity and communication and to consider recommendations regarding input brought by the tax agencies, taxpayers, or other state or local entities.

(b) The board may review and make recommendations regarding policies of the tax agencies but shall not change the policy of the tax agencies if that policy is within the sole authority of the agency. The board’s authority shall not extend to operational matters of the tax agencies, including, but not limited to, pending tax appeals, employee or personnel matters, agency budget change proposals, or agency legislative analyses.

(c) (1) After each meeting, the board shall report its findings and conclusions, along with any recommendations, to the participants, tax agencies, and the Governor.

(2) On or before April 1 of each year, the board shall submit a report of its findings, conclusions, and recommendations to the Governor and the Legislative Analyst’s Office.

SEC. 2.Section 15570.5 is added to the Government Code, to read:

15570.5.

(a)There is in the state government, in the Government Operations Agency, the California Department of Tax and Fee Board consisting of the Controller, Director of Finance, and Chairperson of the State Board of Equalization, vested with the responsibility of directly overseeing the policy direction of the department, including receiving, reviewing, and working collaboratively with the Government Operations Agency on recommendations to resolve public grievances related to these agencies’ tax administration policies and procedures. The California Department of Tax and Fee Board shall provide transparent, open, and accessible forums, meeting at least two times each year for such purposes, as well as to improve tax-related policies, creating a more efficient, just, and responsive tax system, and working collaboratively on recommendations regarding grievances brought by taxpayers or other state or local entities concerning the tax administration policies and procedures that may be relevant to the department. The California Department of Tax and Fee Board, after each meeting, shall report the board’s findings and conclusions, together with recommendations, to all participants, tax agencies, and the Government Operations Agency, and shall issue an annual report on all tax policy issues and recommendations to the Government Operations Agency and to the Legislative Analyst’s office before the end of each fiscal year.

(b)The California Department of Tax and Fee Board is under the control of a director. The California Department of Tax and Fee Board shall recommend to the Governor and the Governor shall appoint the director, a chief deputy director, and a chief counsel, and these appointees shall hold office at the pleasure of the California Department of Tax and Fee Board and the Governor. The appointment of the director shall be subject to confirmation by the Senate.

(c)The director shall be solely responsible for selecting persons for career executive assignment positions and other noncivil service managers for the California Department of Tax and Fee Board.

SEC. 3.Section 15670 of the Government Code is amended to read:

15670.

(a)There shall be established in state government, in the Government Operation Agency, the Office of Tax Appeals.

(b)(1)The office is under the control of a director. The Governor shall appoint the director, chief deputy director, and chief counsel of the office. The appointment of the director is subject to confirmation by the Senate.

(2)The director shall administer and direct the day-to-day operations of the office, including, but not limited to, ensuring that each hearing office is sufficiently staffed and that appeals hearings are heard and resolved in a timely and efficient manner. The director nor the Office of Tax Appeals Board, established in Section 15681, shall not direct, oversee, supervise, or be otherwise involved in the decisionmaking process of the tax appeals panels.

(c)Within the office, there shall be tax appeals panels. Each tax appeals panel shall consist of three members designated by the director of the office. Each member shall be a person who satisfies all of the following criteria:

(1)The person agrees to adhere to the ethics standards adopted by the office pursuant to subdivision (d).

(2)The person has knowledge and experience with regard to the administration and operation of the tax and fee laws of the United States and California.

(3)Either of the following is true:

(A)The person maintained an active membership in the State Bar of California for at least five years immediately preceding designation to a tax appeals panel and meets the qualifications for a state employee classification as an administrative law judge.

(B)The person is employed under either of the following state employee classifications:

(i)The Business Taxes Specialist, California Department of Tax and Fee Administration series.

(ii)The Program Specialist, Franchise Tax Board series.

(d)The office shall adopt by rule, pursuant to Section 15679, ethics standards, including rules governing conflicts of interest and ex parte communication. The office shall, to the extent applicable, model the rules upon the Code of Judicial Ethics adopted by the Supreme Court pursuant to subdivision (m) of Section 18 of Article VI of the California Constitution.

(e)The hiring of members for tax appeals panels shall be conducted by the office in compliance with state civil service requirements.

(f)It is the intent of the Legislature that the changes made to this section by the act adding this subdivision authorizing the office to hire specified tax specialists to serve as members of tax appeals panels shall be implemented by the office in a manner that will not directly cause a reduction in the number of administrative law judges currently employed by the office.

SEC. 4.Section 15681 is added to the Government Code, to read:

15681.

(a)There is in the state government, in the Government Operations Agency, an Office of Tax Appeals Board consisting of the Controller, Director of Finance, and Chairperson of the State Board of Equalization, vested with the responsibility of directly overseeing the policy direction of the office, including receiving, reviewing, and working collaboratively with the Government Operations Agency on recommendations to resolve public grievances related to these agencies’ tax administration policies and procedures. The Office of Tax Appeals Board shall provide transparent, open, and accessible forums, meeting at least two times each year for such purposes, as well as to improve tax-related policies, creating a more efficient, just, and responsive tax system, and working collaboratively on recommendations regarding grievances brought by taxpayers or other state or local entities concerning the tax administration policies and procedures that may be relevant to the office. The Office of Tax Appeals Board, after each meeting, shall report the board’s findings and conclusions, together with recommendations, to all participants, tax agencies, and the Government Operations Agency, and shall issue an annual report on all tax policy issues and recommendation to the Government Operations Agency and to the Legislative Analyst’s office before the end of each fiscal year.

(b)The Office of Tax Appeals Board is under the control of a director. The Office of Tax Appeals Board shall recommend to the Governor and the Governor shall appoint the director, a chief deputy director, and a chief counsel, and these appointee shall hold office at the pleasure of the Office of Tax Appeals Board and the Governor. The appointment of the director shall be subject to confirmation by the Senate.