Compiled January 2000 - FTB.ca.gov - State of California

NON-TAX COLLECTION PROGRAMS
In recent years, the California State Legislature has taken steps to reduce
financial debts owed to state and local governments by empowering FTB
to collect debts on behalf of other agencies. The empowerment was
granted to FTB for three primary reasons:
1. FTB is authorized by law to use effective collection remedies such as
the issuance of levies against wages and bank accounts.
2. FTB has a large data base relating to individual and corporate assets,
including wage, banking, and personal property records.
3. FTB’s staff has extensive collection experience.
FTB’s costs are reimbursed from revenues collected on behalf of the
recipient agencies.
Inter-Agency Intercept Collections
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Government Code Section 12419.2 authorizes the State Controller to
collect debts owed by an individual to a government agency by redirecting
a credit or refund due to that individual by another government agency. In
1975, FTB began providing collection services to agencies by intercepting
the tax refunds and California State Lottery winnings of debtors. FTB’s
intercept collection costs are reimbursed annually by the recipient
agencies. Government Code Section 12419.2 also allows participating
agencies to add collection costs to the amount the debtor owes the
agency.
In 1996/97, governmental agencies received $87.6 million from 452,000
intercepted tax refunds and lottery winnings.This represents a $5.7 million
(6.9%) increase from 1995/96. Exhibit F1 provides further comparisons
with the prior year’s activities.