BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 2433|
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                                    CONSENT


          Bill No:  AB 2433
          Author:   Ruskin (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE LABOR & INDUST. RELATIONS COMMITTEE  :  4-0, 6/9/10
          AYES:  DeSaulnier, Ducheny, Leno, Yee
          NO VOTE RECORDED:  Wyland, Hollingsworth

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8
           
          ASSEMBLY FLOOR  :  74-0, 5/6/10 (Consent) - See last page for  
            vote


           SUBJECT  :    Unemployment insurance:  use of information for  
          tax 
                      purposes

           SOURCE  :     Board of Equalization


           DIGEST  :    This bill authorizes the Employment Development  
          Department to share employment tax information to assist in  
          the administration of tax programs.  This bill specifies  
          the sharing of tax information must be limited to the  
          exchange of information permitted by federal law. 

           ANALYSIS  :    

          Existing law:

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                                                               AB 2433
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          1. Authorizes the Employment Development Department (EDD)  
             to collect personal income taxes required to be withheld  
             by employers. 

          2. Requires employers to remit unemployment insurance (UI)  
             contributions and to collect the employee wage  
             deductions to the Disability Fund.  EDD uses these funds  
             to finance the UI and disability insurance (DI)  
             programs.  

          3. Requires that, unless specifically provided in this  
             code, the information obtained in the administration of  
             the UI Program and DI Program are confidential and must  
             be used for the exclusive use and information of the  
             director of EDD in discharge of his/her duties.  Any  
             person violating the confidentiality of this information  
             is guilty of a misdemeanor.   

          4. Permits the Director of EDD to provide unemployment  
             insurance tax and benefit information to certain  
             governmental entities specified in law.    

          This bill authorizes the Director of EDD to provide the  
          Board of Equalization (BOE) with employment tax information  
          that will assist in the administration of tax programs.  

          This bill also specifies that the information provided must  
          be limited to the exchange of employment tax information  
          essential for tax administration purposes to the extent  
          permitted by federal law and regulations.

           Prior Legislation
           
          AB 604 (Kuykendall), Chapter 766, Statutes of 1998,  
          required that the information obtained in the  
          administration of the UI Program and DI Program is  
          confidential and must be used for the exclusive use and  
          information of the Director of EDD in discharge of his/her  
          duties.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  6/29/10)

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          Board of Equalization (source)


           ARGUMENTS IN SUPPORT  :    The author and the BOE state that  
          in the past BOE relied upon interagency agreements with EDD  
          in which BOE believed the EDD information could be used in  
          "any action or special proceeding," as long as it was  
          presented in summary form.  Recently, the EDD reiterated to  
          BOE staff that statute specifies that the confidential  
          information released to authorized entities cannot be  
          admitted as evidence in "any action or special proceeding"  
          unless specifically authorized by law.  

          The author and BOE note that EDD's information is necessary  
          to arriving at the correct resolution of a fee dispute  
          heard by BOE in an administrative hearing or litigated in a  
          court proceeding.  Also, this bill will ease the compliance  
          burden on employers, as the use of EDD information is less  
          burdensome than providing access to their payroll records.   



           ASSEMBLY FLOOR  :
          AYES:  Adams, Ammiano, Anderson, Arambula, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Blumenfield,  
            Bradford, Brownley, Buchanan, Caballero, Charles  
            Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De  
            Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher,  
            Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,  
            Garrick, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,  
            Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,  
            Bonnie Lowenthal, Ma, Miller, Monning, Nava, Nestande,  
            Niello, Nielsen, Norby, V. Manuel Perez, Portantino,  
            Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,  
            Audra Strickland, Swanson, Torlakson, Torres, Torrico,  
            Tran, Villines, Yamada, John A. Perez
          NO VOTE RECORDED:  Bass, Block, De La Torre, Gilmore,  
            Mendoza, Vacancy


          PQ:mw  6/30/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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