NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Office of Attorney General (AG)

No Response

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

The bill proposes an amendment to the state constitution to authorize the Secretary of Taxation and Revenue to reduce the amount of interest or civil penalty assessed and due on a delinquent tax liability. The Secretary could use this authority when he is in doubt as to whether these amounts are collectable. The legislature would enact laws providing procedures for compromising these amounts, methods for appeal, standards and guidelines, and a process of independent review of Secretarial action.

Significant Issues

The Attorney General's Office notes the amendment would clarify the constitutionality of tax amnesty programs under which interest and penalties on delinquent tax payments are forgiven.

FISCAL IMPLICATIONS

Theoretically, this legislation would result in revenue reductions for those funds for which the Taxation and Revenue Department serves as the tax collector, including the state general fund,

severance tax bonding fund and state road fund. However, to the extent that the Secretary's action is based on the fact that the liability is uncollectable, the fiscal impact would not be significant.

POSSIBLE QUESTIONS

1. Would this provision impact distributions of gross receipts tax and gasoline taxes which are collected by the state and distributed to local governments?

AW/ar