BILL NUMBER: AB 735	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 26, 2003

INTRODUCED BY   Assembly Member Campbell

                        FEBRUARY 19, 2003

   An act to amend Section 21004 of, and to add Section 
21014.5   21014.4  to, the Revenue and Taxation
Code, relating to taxation.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 735, as amended, Campbell.  Taxpayers' bill of rights:
taxpayers' rights advocate:  privacy rights.
   The Katz-Harris Taxpayers' Bill of Rights Act governs the
assessment, audit, and collection of state taxes administered by the
Franchise Tax Board. Existing law requires that the Franchise Tax
Board establish the position of a Taxpayers' Rights Advocate for
purposes of coordinating prompt resolution of taxpayer complaints and
problems.  The advocate or his or her designee is responsible for
coordinating resolution of taxpayer complaints and problems,
including any taxpayer complaints regarding unsatisfactory treatment
of taxpayers by board employees.
   This bill would be known as the Taxpayer Privacy Bill of Rights
Act and would prohibit the Franchise Tax Board from releasing a
taxpayer's personal or financial information to the general public,
unless  the Franchise Tax Board shows a compelling interest for
the disclosure of that information and the disclosure is first 
authorized by the courts.  This bill would also expand the scope of
the Taxpayers' Rights Advocate's authority to review and facilitate
resolution of taxpayer complaints to include complaints regarding the
unauthorized release of taxpayers' personal and financial
information to the general public by employees or officers of the
Franchise Tax Board.
   This bill would also specify that an officer or employee of the
Franchise Tax Board may not threaten to release a taxpayer's personal
or financial information for purposes of forcing a taxpayer to
accept an offer to settle the taxpayer's civil tax liability dispute.
  This bill would also provide that the release of, or  a
  an express or implied  threat to release, that
information by an officer or an employee of the Franchise Tax Board
 for purposes of forcing a tax settlement  would constitute
grounds for termination or other disciplinary actions as provided by
existing law.   This bill would also specify conditions for the
Franchise Tax Board's disclosure of a taxpayer's financial or
personal information in any court or administrative proceeding where
that information would otherwise be made available to the general
public.
   This bill would also allow a taxpayer, who has sustained damages
as the result of any unauthorized release of, or a threat to release,
the taxpayer's personal or financial information, to pursue an
action for damages against the Franchise Tax Board or its officer or
employee. 
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 21004 of the Revenue and Taxation Code is
amended to read:
   21004.  (a) The board shall establish the position of the
Taxpayers' Rights Advocate.  The advocate or his or her designee
shall be responsible for coordinating resolution of  any 
taxpayer complaints and problems  with respect to the Franchise
Tax Board  , including any taxpayer complaints regarding
unsatisfactory treatment of taxpayers by board employees or the
unauthorized release of taxpayers' personal or financial information
to the general public by board employees or officers.  The advocate
shall report directly to the executive officer of the board.
   (b) The advocate or his or her designee shall review taxpayers'
complaints regarding an unauthorized release of, or a threat to
release, taxpayers' personal or financial information by an officer
or employee of the board in violation of Section  21014.5
  21014.4  , and shall verify that the board takes
appropriate disciplinary action, as provided by existing law, against
any officer or employee who violates a taxpayer's privacy rights, as
described in subdivision (b) of Section  21014.5 
 21014.4  .
   (c) The advocate or his or her designee shall give highest
priority to reviewing and taking prompt and appropriate action,
including staying actions where  taxpayers have 
 a taxpayer has  suffered or will suffer irreparable loss as
the result of board action.  Applicable statutes of 
limitation   limitations, and the accrual of any
penalties and interest,  shall be tolled during the pendency of
a stay.   Any penalties and interest which would otherwise
accrue shall not be affected by the granting of a stay. 
  SEC. 2.  Section 21014.4 is added to the Revenue and Taxation Code,
to read:
   21014.4.  (a) This section shall be known and may be cited as the
Taxpayer Privacy Bill of Rights.
   (b) An officer or employee of the Franchise Tax Board may not
release a taxpayer's personal or financial information to the general
public, unless  authorized by the courts   a
compelling interest is shown by the Franchise Tax Board and
disclosure is first authorized by a court of competent jurisdiction
 .
   (c)  Unauthorized release of, or a   Any
unauthorized release of, or any  threat to release a taxpayer's
financial or personal information to the general public,  whether
express or implied,  by an officer or employee of the Franchise
Tax Board,  when the taxpayer rejects a Franchise Tax Board
settlement offer of the taxpayer's proposed state tax liability,
constitutes grounds for termination of   regardless of
whether the release or threat to release was intentional or
negligent, for the purpose of coercing a taxpayer into settling the
taxpayer's proposed state tax liability with the Franchise Tax Board,
constitutes grounds for termination of  that employee or
officer, or other disciplinary actions as provided by existing law.

   (d) An officer or employee of the Franchise Tax Board may not
present a taxpayer's personal or financial information to a court of
competent jurisdiction or to an administrative agency in connection
with any court or administrative proceeding in which that information
would otherwise be available to the general public, unless all of
the following are satisfied:
   (1) The taxpayer's personal or financial information submitted by
the Franchise Tax Board is limited to that information that is
essential to an issue or issues in the court or administrative
proceeding.
   (2) The Franchise Tax Board has shown a compelling need for the
submission of the information.
   (3) The information is filed under seal from the public.
   (e) Any taxpayer who has sustained damages as the result of any
unauthorized release of, or a threat to release, a taxpayer's
financial or personal information to the general public, by an
officer or employee of the Franchise Tax Board, may pursue an action
for damages in a superior court against the Franchise Tax Board and
the officer or employee responsible for the unauthorized release of,
or the threat to release, the taxpayer's financial or personal
information. 
  SEC. 3.  (a) The Legislature finds and declares that the California
tax system is based largely on self-assessment, and that the
collection by the government of accurate personal and financial
information about taxpayers is vital for the proper assessment and
collection of taxes. To promote and improve taxpayer self-assessment,
the government must maintain public trust in the state tax system
and ensure that the financial and personal information supplied by
the taxpayers to the Franchise Tax Board is adequately protected
during the process of assessment and collection.
   (b) It is the intent of the Legislature to protect taxpayers'
personal and financial information, and to ensure that the
information is released by the Franchise Tax Board to the general
public only when  authorized by the courts  the
need to release the information is essential and is first authorized
by the courts.  It is the further intent of the Legislature to
provide that a taxpayer's personal and financial information may only
be submitted to a court of competent jurisdiction or to an
administrative agency in connection with a court or an administrative
hearing, where the court records or the administrative agency's
records would be otherwise available to the general public, if the
information is limited to that information that is essential to the
issues in the court or administrative hearing, the Franchise Tax
Board has shown a compelling need for the submission of that
information, and that information is submitted under seal.  The
Legislature finds and declares that these steps are necessary to
protect the disclosure by the Franchise Tax Board of a taxpayer's
personal and financial information.  It is also the intent of the
Legislature that a taxpayer who has sustained damages as the result
of an unauthorized disclosure of the taxpayer's personal and
financial information by an officer or employee of the Franchise Tax
Board may pursue an action for damages in a superior court against
the Franchise Tax Board as well as the officer or employee
responsible for the disclosure  .