pHERE AND KNOW THAT IT IS A BUSY
WEEK WE WELCOME YOU TO THE
SENATE'S GOVERNANCE AND FINANCE
COMMITTEE.
I WILL BE STARTING AS A
SUBCOMMITTEE TODAY WE DO HAVE A
MEMBER WHO IS ALSO CHAIRING A
TRAINS IN HOUSING.
BY IN SENATOR BELL WILL BE HERE
IN JUST A BIT.
SO QUICK HOUSEKEEPING --
FOR THE MEMBERSHIP.
WE WILL HAVE MOST LIKELY A
MAXIMUM OF FIVE ADDITIONAL BILLS
THAT MAY BE COMING. TO US ON
BOTH THE SENATE AND THE ASSEMBLY
SIDE.
BUT WE ARE.
NOT SURE --
IF WE'RE GOING TO BE SEEN THESE
BILLS ARE NOT THERE'S A
POTENTIAL AS WE ALWAYS KNOW THAT
--
DEPENDING ON THE TIMING OF THE
BILL'S MAY GO ST THE FLOOR I'D
MAKE CAN BECOME TO THIS
COMMITTEE UP OR SO WAITING ON
REFERRAL. TO JUST WANTING TO
MAKE SURE THAT FOLKS KNOW --
THAT --
THERE MAY BE AN ADDITIONAL.
AND THEN OBVIOUSLY THEY'RE GOING
TO THE COMMITTEE PROCESS ON THE
ASSEMBLY SIDE IS WELL JUST
WANTED TO MAKE SURE THAT
EVERYONE HAD A HEADS UP.
LET'S CHEN IN THE COMMITTEE WE
HAVE ONE BILL THAT IS IN FRONT
OF US TODAY WE'RE GONNA WELCOME%
THE GOOD SENATOR FROM ORINDA TO
BE HAVE COME FORWARD.
THAT'S ON SP TWO SEVENTY FOUR
WHICH IS ON THE MINISTRY ON
ADMINISTRATION OF TAXES IN THE
NOTICE OF DEFICIENCY ASSESSMENT.
ON HAVE SOME QUESTIONS ON THIS
--
BUT I KNOW THAT THERE WILL BE A
SUPPORT ON EACH SIDE OF THIS WHO
GONNA ASK FOR A TRUNCATED.
PRESENTATION FROM CENTER GLAZIER
UPON THIS ONE AND AS WELL AS HE
WITNESSES SO GOOD SENATOR IT IS
THE FOR SURE SIR.
I HATE THAT THANK YOU MISTER
CHAIRMAN THAT AND MEMBERS
APPRECIATE YOU TAKING THE TIME.
TO HEAR THIS BILL --
AS YOU KNOW THAN THE JUST
SUMMARIZE BRIEFLY WHAT THIS BILL
DOES IT WILL HELP PROVIDE
STATUTORY AUTHORITY TO THE
FRANCHISE TAX BOARD. TO
ESTABLISH A PROCESS FOR
TAXPAYERS TO REPORT AND PAY.
CALIFORNIA TAXES CONFORMING TO
NEW FEDERAL RULES.
PERTAINING TO PARTNERSHIP AUDIT
THE JUST CITING FIELD I KNOW.
EVERYBODY RIVETED HERE
PARTNERSHIP AUDIT ADJUSTMENTS --
AS YOU KNOW THE FEDERAL
GOVERNMENT CHANGED THE WAY
ADJUSTMENTS FROM AUDITS OF
PARTNERSHIPS ARE ASSESSED.
A BY THE IRS AND THESE NEW
FEDERAL RULES ATTEMPT TO
CENTRALIZE PARTNERSHIP AUDIT
ADJUSTMENTS.
AND ALSO ALLOW PARTNERSHIPS TO
ALLOCATE THEIR SHARE OF
ADJUSTMENTS IN ANY TAX LIABILITY
TO AN INDIVIDUAL PARTNER.
THAT ALTHOUGH PARTNERSHIPS WERE
ABLE TO OPT OUT.
BOB DAN EARLY ALMOST NONE DID.
THESE NEW PARTNERSHIP AUDIT
PROCEDURES ARE MANDATORY
BEGINNING THE TWO THOUSAND
EIGHTEEN TAXABLE YEAR.
AND WITH THESE NEW RULES.
THE FRANCHISE TAX BOARD BELIEVES
THAT IT LACKS STATUTORY
AUTHORITY TO COLLECT TAXES UNDER
THE NEW FEDERAL RULES.
AND IN DECEMBER OF TWO THOUSAND
SEVENTEEN THE THREE MEMBER
FRANCHISE TAX BOARD VOTED TO
SUPPORT LEGISLATION TO ADDRESS
THIS ISSUE.
SO IN COLLABORATION WITH THE
FRANCHISE TAX BOARD CAL TAX IN
SEVERAL NATIONAL ORGANIZATIONS
THIS LANGUAGE PRESENTED IN TIS
BILL.
AUTHORIZED THE FEDERAL THE
FRANCHISE TAX BOARD TO COLLECT
FROM PARTNERSHIPS OR THEIR
INDIVIDUAL PARTNERS ANY INCREASE
STATE TAX LIABILITY.
RESULTING FROM FEDERAL AUDIT OF
PARTNERSHIPS THIS BILL DOES NOT
INCREASE TAXES SIMPLY INSURES
THAT THE F. T. BE WILL REMAIN IN
COMPLIANCE WITH THESE NEW
FEDERAL RULES.
THIS BILL ALSO DEFINES THE
PROCESS FOR THE PARTNERSHIP FOR
PARTNERS TO REPORT ADJUSTMENTS
AND PAY THEIR CALIFORNIA TAX
LIABILITIES WHICH WE KNOW WE ALL
WANT -- WITH
THE ALL OF THE OPTION OF AN
ALTERNATIVE REPORTING APPROACH
SUBJECT FTP APPROVAL JOINING ME
TODAY.
EYES THERESA MAY FROM CAL TAX TO
HELP ANSWER ANY QUESTIONS WITH
THAT I RESPECTFULLY ASK FOR MY
VOTE.
COMMISSION MISTER SENATOR WE'RE
GRATEFUL ALWAYS TO SEE --
TREES IT HERE IN COMMITTEE MA'AM
WOULD YOU LIKE TO BE ABLE TO
HAVE FLOOR.
THANK YOU MISTER TERRITORY SOME
A REPRESENTING THE CALIFORNIA
TAXPAYERS ASSOCIATION FIRST OF
ALL I'D LIKE TO THANK THE AUTHOR
CENTER GLACIER FOR CARRYING THIS
VERY IMPORTANT BILL.
THE REASON THIS IS IMPORTANT
THIS CAL SURE IT'S GOING TO BE
USED BY OTHER STATES BECAUSE
CALIFORNIA SO LARGER HAS SO MANY
MULTI STATE PARTNERSHIPS IT'S
IMPORTANT FOR BOTH BUSINESSES AS
WELL AS A FRANCHISE TAX BOARD.
TO ACHIEVE UNIFORMITY UNIFORMITY
REDUCES THE COMPLIANCE COSTS FOR
PARTNERSHIPS THAT OPERATE IN
MULTIPLE STATES FOR THE
FRANCHISE TAX BOARD THIS ALSO
INCREASES.
TAX ENFORCEMENT ACTIVITIES AND
MAKES IT MORE EFFICIENT BECAUSE
AS THERE'S MULTI JURISDICTIONAL
ISSUES FRANCHISE TAX BOARD CAN
WORK WITH OTHER STATES BASED ON
A UNIFORM SET OF RULES.
WE ALSO LIKE TO NOTE THAT THIS
BILL WAS APPROVED BY THE
ASSEMBLY ON A BIPARTISAN BASIS
WITH UNANIMOUS VOTE.
THE BILL CAME OUT OF THE
ASSEMBLY AND EIGHTY TWO ZERO
VOTE THERE IS AN URGENCY OF
CLAUSE BECAUSE THIS BILL NEEDS
ARE GOING TO AFFECTED BEGINNING
IN THIS YEAR.
WITH DON WE THINK THE COMMITTEE.
THANK COMMITTEE STAFF AND WE ARE
CHAIR AYE VOTE IF YOU SO MUCH
FOR HIM.
GOOD MORNING SIR IN THE MORNING
THE JEFF SIEVERS UP HERE ON
BEHALF THE MASTER LIMITED
PARTNERSHIP CESSATION.
THIS IS THE ASSOCIATION
REPRESENT PUBLICLY TRADED
PARTNERSHIPS SWEET FIRST I THINK
THE SENATOR AND STAFF OF MEMBERS
THE FRANCHISE TAX BOARD FOR
WORKING WITH US TO IDENTIFY.
AND RECOGNIZE THE UNIQUENESS OF
PARTNERSHIP THAT ARE PUBLICLY
TRADED --
THE TRAY LIKE STOCK TODAY CAN BE
ALCHEMY MILLIONS OF SHARES
TRADED AND TECHNICALLY THOSE ARE
ALL I CONSIDER PARTNERS.
SO IDENTIFYING THE UNIQUENESS OF
IT ALLOWING AND THAT BE
CONSIDERED THE BILL TO WORK THE
FRANCHISE TAX BOARD SO IF THERE
IS IN ON IT THE PROPER NOT A
REPORT TO THE STATE.
ABOUT THANK YOU VERY MUCH THANK
YOU SO MUCH WOULD NOW LIKE TO
INVITE ANYONE ELSE WOULD LIKE TO
SPEAK IN SUPPORT OF THE BILL TO
COMPLETE ADVANCE THIS TIME FIRST
AND LAST NAME AND ORGANIZATION
THOSE WHO ARE IN SUPPORT OF THE
BILL PLEASE ADVANCE.
LAST CALL WE NOW LIKE THAT ASK
THERE'S ANYONE A WHO ARE HERE IN
OPPOSITION IF YOU COULD PLEASE
ADVANCE [inaudible]
OPPOSITION [inaudible]
LAST CALL IT'S BRING IT BACK TO
COMMITTEE FOR QUESTIONS OR
COMMENTS.
THE BILL OF THANK YOU SO MUCH
THAT IS A MOTION BY CENTER
MORLOCK ANY ADDITIONAL QUESTIONS
OR COMMENTS.
AB BEFORE WE GO TO THE CLOSE
FERMENTED SENATOR WOULD LIKE TO
BE REDUCED.
YEAH YEAH I'M IN SENATOR I KNOW
I KNOW THAT THERE'S BEEN SOME
COMMUNICATION BETWEEN --
ARE HARD WORKING COMMITTEE STAFF
AS WELL AS YOUR HARD WORKING
STAFF ABOUT CLEAN UP.
AND AND REALLY LOOKING AT THE
ISSUE OF PARTNERSHIPS.
I AND I THINK THAT THERE IS
STILL SOME CONCERN ABOUT ANGER
AMBIGUITY ABOUT PARTNERSHIPS IN
PARTNERSHIP ELECTIONS.
CRITICALLY AND HOW IT RELATES TO
FTP.
IN WANTING TO ENSURE THAT WE
HAVE THE COMMITMENT ANY GATHER
COME THROUGH THE COMMITTEE
PROCESS.
OUR INDOOR AYE THROUGH YOUR
OFFICE ABOUT LOOKING IN A CLEAN
ISN'T CLEAN UP LEGISLATION NEXT
YEAR -- ON
CHANGING THE SHALL TO IN MAY
THAT WOULD MAKE IT CLEAR.
A IN REGARDS TO THE SECTION IS
PERMISSIVE AND NOT MANDATORY AND
WANTING TO MAKE SURE YOU'RE
COMFORTABLE THAT.
MISTER CHAIRMAN THANK YOU FOR
THE QUESTION AND I AM AWARE OF
THE ISSUE AND THE CONCERN AND IT
HAS BEEN DISCUSSED AMONG THE
STAKEHOLDERS AND THAT TV PRIOR
TO THE HEARING YET.
TERMS OF HOW WE KEEP EVERYBODY
TOGETHER AND THAT.
WE GET TO US.
THE THIS WORK DONE AND I THINK
THERE IS SOME DIFFERENCES OF
OPINION ON THAT ISSUE.
AND THERE SOME THAT WOULD LIKE
TO HAVE SOME EXPERIENCE --
WITH THIS NEW RULE IN PLACE TO
SEE --
WHETHER THAT'S A CHANGE THAT
SEVERAL REQUIRED NEEDED IN THOSE
OTHERS WHO WOULD LIKE TO SIMPLY
JUST CLEAN IT UP AND GIVE THAT
DISCRETION.
A LOT TO THEM FROM THE START
WHAT I'D LIKE TO COMMITTEE WAS
THAT.
THAT THAT WE WILL CONTINUE TO
GET TO TALK ABOUT IT AND WORK ON
IT NEXT YEAR AND SEE IF WE CAN.
I SEE IF I IF THE EXPERTS THEY
HAVE TB WHICH IS THE ONES WHO.
ARE YOU TRYING TO GIVE THAT DOT
DISCRETION TO SOMETHING THAT
THEY WOULD LIKE.
I'M NOT SO SURE THAT'S CLEAR
CLEAR TO ME AND I'D I'D LIKE TO
WORK WITH ALL THE STAKEHOLDERS
TO ADVANCE THAT IN THE COMING
YEAR SO THAT WE CAN MAKE THE
BEST DECISION GOING FORWARD.
MISTER CHAIR BECAUSE WE WORKED
WITH FTP ON THE LANGUAGE ON
EVERYWORD COM I WAS VETTED
THROUGH SEVERAL MONTHS OF
NEGOTIATIONS WORKING WITH FTP TO
MAKE SURE THAT.
WE HAVE A MODEL THAT WORKS BASED
ON THE WHAT WE KNOW NOW OF THE
IRS GUIDELINES BUT THOSE IRATE
IRIS GUIDELINES ON HAVE BEEN
CHANGING SINCE THE FEDERAL
ENACTMENT IN.
TWENTY FIFTEEN AND BECAUSE IT
WENT INTO AFFECT THE BEGINNING
OF THIS YEAR NOT MANY STATES AND
CALIFORNIA HAS NOT HAD MUCH
EXPERIENCE WITH THAT.
SO WE COMMIT TO WORKING WITH
COMMITTEE STAFF AS WELL AS THE
FRANCHISE TAX BOARD WE'RE NOT
SURE WHETHER OR NOT CLEAN UP
WOULD COME NEXT YEAR OR WHEN WE
HAVE MORE EXPERIENCE WITH SOME
OF THESE OTHER.
ISSUES AND POTENTIAL CHANGES IN
THE FOR WOULD LIKE TO COME BACK
SO WE COMMIT TO WORKING WITH YOU
WERE NOT SURE THAT FOUND WE CAN
COMMIT.
NOW FOR LEGISLATION NEXT YEAR OR
POTENTIAL LEGISLATION AND TWENTY
TWENTY BECAUSE IT MIGHT MAKE
MORE SENSE TO COMBINE ANY OF
THOSE OTHER CHANGES THAT MAY BE
COMING DOWN THE PIPELINE.
BUT SINCE FTP IT IS --
WAS OUR PARTNER IN DEVELOPING
THIS LANGUAGE --
WE CANNOT COMMIT TO MAKING THE
CHANGE BUT WE PUT DIFFERENT
COMMIT TO WORKING WITH YOU ON
THE COMMITTEE STAFF.
WHICH I'M GONNA HAVE DIANNE FROM
IF TO BEAT PLEASE ADVANCE TO THE
ACTIVE DICE PLEASE AS HAVE SOME
QUESTIONS WE'D LIKE TO BE
RECESSED SHOW QUORUM.
I'M AND THEN WE'LL GET RIGHT
BACK -- IT
TOO SINCE WE HAVE ALL THE FOLKS
HERE ASSIGNED TO SERVE LOCAL
POLICE REQUIRE HERE REQUIRE
PRESS IT.
WHEN?
NGUYEN PRESIDENT BELL.
NOW PRESENT HERNANDEZ HERNANDEZ
PROVES PRESENT HERTZBERG LARA
MORE LOCKED.
MORE LIKE PRESENT.
THANK YOU SO MUCH A QUORUM IS
BEEN ESTABLISHED AND WE WELCOME
YOU THE FAMOUS SAYING FROM FTP.
LA DAY --
BUT WOULD LIKE TO BE OVERSEAS
FROM YOU IS IT CAN BE EASIER
WITH A MAY IS AMY EASIER TO
SHALL.
I UNDERSTAND IN THAT THIS IS
BEEN A LONG STANDING DISCUSSION.
I IN HAS BEEN QUITE COMPLICATING
DO APPRECIATE ALL SIDES ON THIS
BUT IF YOU DON'T MIND IS PROVIDE
US YOUR OPINION PLEASE.
WELL WE WE DIDN'T NEGOTIATE
THROUGH WITH THIS LANGUAGE --
WITH THE M. WITH THE GROUPS YOU
KNOW WITH CONTACTS AND COST AND
WE ALL AGREED THAT THIS LANGUAGE
WOULD WORK --
BECAUSE I THINK AT THE BEGINNING
WE WERE INSISTING ON ME BUT
THROUGHT KNIT CROCHET SHALL WE
FELT THAT WE COULD WORK WITH
SHALL WITH THE LANGUAGE THAT WE
HAVE TIME IN THAT SENTENCE
[inaudible]
SO.
AND WE ARE WILLING TO LOOK AT IT
LATER THEIR TO SEE IF IT WOULD
BE BETTER.
WE KNOW LATER S. MAYBE --
AND NINE YOU KNOW I PROBABLY
WOULD HAVE TO DEFER TRY LEGAL
EXPERTS AT FTP --
I'M NOT.
AN ATTORNEY STYLE [inaudible]
PLEASE.
MR CHURCH AS A FORMER TAX
PREPARER.
THIS LAST WEEK OBSESSION IS SORT
OF LIKE TAXIS AND JUST KIND OF
KEEP THE WRAPPING UP UNTIL THE
LAST DAY IN THE NET [inaudible]
YOU'RE DONE.
BUT WHAT REALLY HOLDS UP.
TAX PREPARERS IS THESE GAY ONES
THAT ARE COMING OUT OF THE
PARTNERSHIPS WERE WERE WAITING
FOR EVER.
UNTIL THE END OF ALMOST LEGALLY
TO APRIL FIFTEENTH.
SO I I I BE RELUCTANT.
TO TO TRY TO MAKE AN AMENDMENT
TODAY I'D LIKE TO SEE IT GO BUT
RUIN AND MAKE CHANGES LATER
BECAUSE BUT THERE'S NO LIMIT ON
THE TABLE ALL WE'RE ASKING FOR
IS -- FOR
CLEAN UP SO WHAT WOULD I LIKE TO
A THAT IT MORTARBOARD PASS IN
THE BILL CLEAN THE AS IS.
UP RIGHT THERE IS SOME CONCERN
AND CONCERN ON COMMITTEE STAFFS
PART AS WELL.
THAT PROBLEM.
THERE'S SOME AMBIGUITY IN THIS
IN THAT AIM TO UT CAN ADVANCE
CRITICALLY IN THE ELECTIONS AND
THAT AND THE BEAUTY CAN ADVANCE
PRETTY COSTLY LITIGATION.
NOT SO THAT'S SOMETHING WE ALL
WANT TO AVOID I'M SO WHAT I'D
LIKE TO BE TO SUGGEST EXISTS AND
AGAIN THERE ARE NO FORMAL
AMENDMENTS THAT ARE BEING
ADVANCE ON THIS BILL TODAY.
WOULD LIKE TO BE A SUGGESTED
MEETING THIS FALL I AND A
MEETING IN THE FIRST QUARTER OF
BY.
TWO THOUSAND NINETEEN I'D
BETWEEN --
OBVIOUSLY THE AUTHORS OFFICE THE
STAKEHOLDERS IS WELLS FDB IN OUR
OFFICE AYE IN COMMITTEE STAFF TO
BE ABLE TO DISCUSS THIS WOULD
LIKELY TO SEE IF WE CAN HAVE A
COMMITMENT ON THAT JUST SO THAT
WE WERE.
TOUCHING BASE AND IN CANDIDLY
TRYING TO BE PROACTIVE TO AVOID
ANY FIRES AYE AS THIS IS BEEN A
LONG TIME COMING --
GAIN MISTER --
CENTER YOU'RE COMFORTABLE THAT
YES DECISION I THINK THAT'S A
VERY CONSTRUCTIVE SUGGESTION AND
I'M HAPPY TO PARTICIPATE AS
APPROPRIATE IN THAT.
OUT WITH THE PEOPLE THAT KNOW A
LOT MORE THAN I MY OFFICE ABOUT
THESE MATTERS CLEAR YOUR STAFF'S
EXPERTISE.
ABSOLUTE I AGAIN I THINK WE'RE
ALL ON THE SAME PAGE OUR BIGGEST
PIECES WE WANT TO CREATE ANY
TYPE OF SHOW THAT MAYBE I TO
FREE PUT THE WORD IN FRONT OF IT
--
AS WE ADVANCE THIS IS BEING DONE
I CHALLENGE YOU TO GET TO
APPRECIATE EVERYONE'S HARD WORK.
AND MONEY MAKE SURE THIS ISN'T
SOME OF THIS POSSIBLE.
SO WILL STAB WISH --
OF WORKING GROUP IF YOU WILL
WITH THE SENATOR'S OFFICE
STAKEHOLDERS FDB AND GOVERN
FINANCE STAFF HERE.
FALL AS WELL AS ONE IN FIRST
QUARTER TWO THOUSAND NINETEEN IN
TOUCHING BASE OF THAT WORKS FOR
FOLKS.
WE CURRENTLY HAVE A QUORUM WE
ALSO HAVE A MOTION ON THE FLOOR
BY SENATOR MORE LOCK USES IT IS
HAS BIPARTISAN SUPPORT. FIVE
CENTER WOULD YOU LIKE TO CLOSE
THANK YOU FOR ALL YOUR HELP.
HOLDERS IN THE FTP WITH THAT I
RESPECTFULLY ASK I THINK YOU SO
MUCH THE MOTION IS RETURN THE
BILL TO THE SENATE FLOOR.
WITHIN JUST A ROLL CALL PLEASE
REQUIRED BY MCGUIRE AYE NGUYEN.
WHEN I BILL ON BELL AYE
HERNANDEZ HERNANDEZ AYE
HERTZBERG?
LARA AYE LARA I'M MORE LIKE.
I BROUGHT DOWN HERE.
THINKING THAT IS SIX IS HERE AND
KEEP THE ROLE OPEN AND SENATOR
HURT SEE IS TO ON HIS HUESO
THANK YOU SO MUCH EVERYONE FOR
ALL THE WORK THANK YOU.
IN MY AGE OF I INFECTIOUS AND
VERY MUCH LIKE.
WE'RE ASKING SENATOR HERTZBERG
TO PLEASE COME GOVERNMENT
FINANCES AS WE HAVE PURRS
COMMITTEE THAT NEEDS YOU LAUNCH
HERE SHORTLY AT CENTER HERTZBERG
CAN PLEASE COME.
I MEAN IT'S ROOM ONE TWELVE
IMMEDIATELY [inaudible]
FOR SIX
ZERO THE MOTION WAS RETURNED THE
BILL TO THE SENATE FLOOR DESIGN
CHESTER --
ROLL CALL PLEASE HERTZBERG --
PAID EVERY GO.
THAT IS A SEVEN ZERO SEVEN ZERO
OF THE BILL IS THAT WERE CLOSE
IN THE ROLE THANK YOU SO MUCH.
WE