BILL NUMBER: AB 2421 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 13, 2004
INTRODUCED BY Assembly Member Campbell
FEBRUARY 19, 2004
An act relating to the disclosures made by the Franchise
Tax Board. An act to amend Section 21004 of, and to
add Section 21014.4 to, the Revenue and Taxation Code, relating to
taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 2421, as amended, Campbell. Franchise Tax Board:
disclosures Tax administration: Taxpayers' Privacy
Bill of 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 the board to 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. The advocate is authorized to stay a pending
action in cases where a taxpayer has, or will suffer irreparable loss
as a result of the board's action. Existing law suspends applicable
statutes of limitation during any stay of a pending action that is
authorized by the advocate.
This bill would be known as the Taxpayer Privacy Bill of Rights
Act and would prohibit the board from releasing a taxpayer's personal
or financial information to the general public, unless the 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 the resolution of taxpayer
complaints to include complaints regarding the unauthorized release
of a taxpayer's personal and financial information to the general
public by employees or officers of the board. This bill would also
provide for the suspension of the accrual of interest and penalties
during any stay of a pending action that is authorized by the
advocate.
This bill would also specify that an officer or employee of the
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 an express or implied threat to
release, that information by an officer or an employee of the 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 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 board or its officers or employees.
Existing law imposes an income tax on individuals, businesses, and
corporations that are residents of, or are domiciled within,
California. The Franchise Tax Board is the agency responsible for
the collection and administration of these income taxes. If an
individual is a temporary or part-year resident of California, the
tax imposed on the income of that individual is modified based on the
amount of time that taxpayer spent in California and on the amount
of income that taxpayer earned in California during the taxable year.
In the case of an individual that is not domiciled within
California during the entire taxable year, the Franchise Tax Board
bears the burden of proof in determining that individual's place of
residence.
This bill would state the Legislature's intent to regulate the
disclosure of an individual's personal financial information that is
obtained by the Franchise Tax Board in the course of any
investigation or proceeding with respect to the determination of that
individual's place of residence.
Vote: majority. Appropriation: no. Fiscal committee:
no yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature to enact
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 the
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. The
advocate shall report directly to the executive officer of the board.
(b) (1) The advocate, or his or her designee, shall review
any taxpayer complaint regarding an unauthorized release, or the
threat of an unauthorized release of that taxpayer's personal or
financial information by an officer or employee of the board in
violation of Section 21014.4.
(2) The advocate, or his or her designee, shall verify that the
board takes the appropriate disciplinary action, as provided by
existing law, against any officer or employee of the board who
violates a taxpayer's privacy rights, as described in Section
21014.4.
(c) The advocate , or his or her designee ,
shall give the highest priority to reviewing and
taking prompt and appropriate action, including staying
actions the stay of any action where
taxpayers have a taxpayer has suffered or will
suffer irreparable loss as the result of board action. Applicable
statutes of limitation and the accrual of any interest and
penalties 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
Taxpayers' 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 a compelling interest is shown by the Franchise Tax
Board and disclosure is first authorized by a court of competent
jurisdiction.
(c) 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 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 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. legislation that would
regulate the disclosure of an individual's personal financial
information that is obtained by the Franchise Tax Board in the course
of any investigation or proceeding with respect to the determination
of that individual's place of residence.