BILL NUMBER: AB 689	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 16, 2007

INTRODUCED BY   Assembly Member DeVore

                        FEBRUARY 21, 2007

   An act to add Sections  17053.93, 18408.5, and 23693
  17053.50, 18408.5, and 23650  to the Revenue and
Taxation Code, relating to taxation.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 689, as amended, DeVore. Income and corporation taxes:
Employment Verification Act of 2007.
   Existing law requires employers to obtain the social security
number of each employee and to use that number on various reports to
the state and federal government.
   This bill would require employers to verify each new employee's
social security number and to provide  annual  
specified  reports to the  Franchise Tax Board 
 Employment Development Department  showing the name and
social security number of each employee. This bill would impose on an
employer a  quarterly  fine of  $1,000 
 $20  for each employee for whom the employer has not
provided a valid social security number  , and a fine of $10,000
for an employer who commits a specified fraud  .
   The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
   This bill would, under both laws, provide a tax credit of 
$100   $5  to an employer for each  newly
hired  employee for whom a valid social security number has
been provided to the board.
   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.  This act shall be known and may be cited as the
Employment Verification Act of 2007.
  SEC. 2.  Section 17053.50 is added to the Revenue and Taxation
Code, to read:
   17053.50.  (a) There shall be allowed as a credit against the "net
tax," as defined in Section 17039, an amount equal to  one
hundred dollars ($100) for each new   five dollars ($5)
for each  employee hired by the taxpayer during the taxable year
for whom the taxpayer provides a valid social security number to the
 Franchise Tax Board   Employment Development
Department  pursuant to Section 18408.5.
   (b) In the case where the credit allowed by this section exceeds
the "net tax," the excess may be carried over to reduce the "net tax"
in the following year, and succeeding years if necessary, until the
credit is exhausted.
  SEC. 3.  Section 18408.5 is added to the Revenue and Taxation Code,
to read:
   18408.5.  (a) Within 30 days of hiring a new employee, an employer
shall verify the social security number of the newly hired employee
by means of the Social Security Number Verification Service provided
by the Social Security Administration of the federal government, or
any successor program, and shall maintain documentation of this
verification. 
   (b) By January 31 of each year, an employer shall provide to the
Franchise Tax Board written documentation showing, for each employee
employed during the previous calendar year, his or her name and
social security number. 
    (b)     An employer shall disclose on the
Quarterly Wage Report each employee whose social security number has
been verifie   d by means of the Social Security Number
Verification Service provided by the Social Security Administration.
 The board shall establish appropriate procedures and forms for
the provision of this information, and for the enforcement of this
section. 
   (c) An employer who fails to submit the documentation required by
this section or who submits false or fraudulent documentation is
subject to an annual fine of one thousand dollars ($1,000) for

    (c)     An employer who fraudulently checks
the box on the Quarterly Wage Report form that an employee's 
 social security number had been validated shall be subject to a
fine of ten thousand dollars ($10,000). The Employment Development
Department shall conduct periodic audits to ensure the employer is
complying. An employer shall be subject to a quarterly fine of twenty
dollars ($20) for  each employee for whom no documentation or
false or fraudulent documentation is provided. The fines collected
pursuant to this subdivision shall be deposited in the General Fund.

   (d) An employer shall be required to verify the social security
number of an employee only one time. 
  SEC. 4.  Section 23650 is added to the Revenue and Taxation Code,
to read:
   23650.  (a) There shall be allowed as a credit against the "tax,"
as defined in Section 23036, an amount equal to  one hundred
dollars ($100) for each new   five dollars ($5) for each
 employee hired by taxpayer during the taxable year for whom
the taxpayer provides a valid social security number to the 
Franchise Tax Board   Employment Development Department
 pursuant to Section 18408.5.
   (b) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" in the
following year, and succeeding years if necessary, until the credit
is exhausted.