The Senate Governance and Finance Committee approved the legislation, Senate Bill 209, by a 6-1 margin with the committee chair, Davis Democrat Lois Wolk, casting the lone "no" vote.
The legislation, carried by Sen. Ted Lieu, D-Torrance, and Assemblyman Jeff Gorell, R-Camarillo, would overturn a 2012 judicial decision that a 1993 tax break for those who invest in small California companies was an invalid interference in interstate commerce.
The tax break cut in half the taxes on capital gains from such investments. After the decision was rendered last year, the Franchise Tax Board declared that everyone who took advantage of the tax break after 2008 would have to repay their tax savings, plus interest and penalties. It amounted to at least $120 million.
The affected taxpayers began protesting. Lieu and Gorell introduced SB 209 to shield them from the retroactive taxes.
PHOTO CREDIT: Sen. Ted Lieu, D-Torrance, talks on the Senate floor. Rich Pedroncelli / Associated Press file, 2012