BILL NUMBER: SB 402 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 4, 2009
AMENDED IN SENATE APRIL 28, 2009
AMENDED IN SENATE APRIL 16, 2009
INTRODUCED BY Senator Wolk
FEBRUARY 26, 2009
An act to add Sections 19266 and 19560 to the Revenue and
Taxation Code, relating to taxation. An act to amend,
repeal, and add Section 14574 of the Public Resources Code, relating
to recycling, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 402, as amended, Wolk. Franchise Tax Board:
collections. Recycling: beverage containers:
redemption payments.
Existing law requires a distributor of specified beverage
containers to pay a redemption payment to the Department of
Conservation for each beverage container sold or transferred for
deposit in the California Beverage Container Recycling Fund. Existing
law requires that the distributor pay the redemption payment not
later than the last day of the 3rd month following the sale.
This bill would require these beverage distributors, to make the
redemption payment no later than the last day of the 2nd month
following the sale of the beverages, except the bill would provide a
specific redemption payment schedule for sales for July, August, and
September of 2009. These provisions would be repealed on June 30,
2010.
The bill would authorize a distributor to withhold payment of
redemption payments until the next payment period when the
distributor has not received payment for beverage containers on which
redemption payments are owed.
This bill would declare that it is to take effect immediately as
an urgency statute.
Existing laws require the Franchise Tax Board to administer
specified taxes and collect those taxes from delinquent tax debtors.
This bill would require the board, in coordination with financial
institutions doing business in this state, to operate a Financial
Institution Record Match System utilizing automated data exchanges to
the maximum extent feasible in order to allow the board to match its
list of delinquent tax debtors with the lists provided by the
financial institutions. The bill would authorize the board to
institute civil proceedings to enforce specified provisions of the
bill, and would impose specified penalties on financial institutions
for failure to provide records in connection with the match system,
as provided. This bill would provide that the specified use of
certain data is a misdemeanor.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes no .
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14574 of the Public
Resources Code is amended to read:
14574. (a) (1) A distributor of beverage containers shall pay to
the department the redemption payment for every beverage container,
other than a refillable beverage container, sold or transferred to a
dealer, less 1.5 percent for the distributor's administrative costs.
(2) The (A) Except
as required pursuant to subparagraph (B), the payment made by a
distributor shall be made not later than the last day of the
third second month following the sale.
The distributor shall make the payment in the form and manner that
the department prescribes.
(B) (i) Payment for sales for the month of July 2009 shall be made
not later than October 20, 2009.
(ii) Payment for sales for the month of August 2009 shall be made
not later than November 10, 2009.
(iii) Payment for sales for the month of September 2009 shall be
made not later than December 1, 2009.
(b) (1) Notwithstanding subdivision (a), if a distributor displays
a pattern of operation in compliance with this division and the
regulations adopted pursuant to this division, to the satisfaction of
the department, the distributor may make a single annual payment of
redemption payments, if the distributor meets either of the following
requirements:
(A) If the redemption payment and refund value is not increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
distributor's projected redemption payment for a calendar year totals
less than fifty thousand dollars ($50,000).
(B) If the redemption payment and refund value is increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
distributor's projected redemption payment for a calendar year totals
less than seventy-five thousand dollars ($75,000).
(2) An annual redemption payment made pursuant to this subdivision
is due and payable on or before February 1 for every beverage
container sold or transferred by the distributor to a dealer in the
previous calendar year.
(3) A distributor shall notify the department of its intent to
make an annual redemption payment pursuant to this subdivision on or
before January 31 of the calendar year for which the payment will be
due.
(4) A distributor may withhold payment of redemption payments
until the next payment period when the distributor has not received
payment for beverage containers on which redemption payments are owed
pursuant to this division.
(c) This section shall remain in effect only until June 30, 2010,
and as of that date is repealed, unless a later enacted statute, that
is enacted before June 30, 2010, deletes or extends that date.
SEC. 2. Section 14574 is added to the
Public Resources Code , to read:
14574. (a) (1) A distributor of beverage containers shall pay to
the department the redemption payment for every beverage container,
other than a refillable beverage container, sold or transferred to a
dealer, less 1.5 percent for the distributor's administrative costs.
(2) The payment made by a distributor shall be made not later than
the last day of the third month following the sale. The distributor
shall make the payment in the form and manner that the department
prescribes.
(b) (1) Notwithstanding subdivision (a), if a distributor displays
a pattern of operation in compliance with this division and the
regulations adopted pursuant to this division, to the satisfaction of
the department, the distributor may make a single annual payment of
redemption payments, if the distributor meets either of the following
requirements:
(A) If the redemption payment and refund value is not increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
distributor's projected redemption payment for a calendar year totals
less than fifty thousand dollars ($50,000).
(B) If the redemption payment and refund value is increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
distributor's projected redemption payment for a calendar year totals
less than seventy-five thousand dollars ($75,000).
(2) An annual redemption payment made pursuant to this subdivision
is due and payable on or before February 1 for every beverage
container sold or transferred by the distributor to a dealer in the
previous calendar year.
(3) A distributor shall notify the department of its intent to
make an annual redemption payment pursuant to this subdivision on or
before January 31 of the calendar year for which the payment will be
due.
(4) A distributor may withhold payment of redemption payments when
the distributor has not received payment for beverage containers on
which redemption payments are owed pursuant to this division until
the next payment period.
(5) This section shall become operative on July 1, 2010.
SEC. 3. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to keep the California Beverage Container Recycling Fund
from becoming insolvent, it is necessary for this act to take effect
immediately.
SECTION 1. Section 19266 is added to the
Revenue and Taxation Code, to read:
19266. (a) (1) The Franchise Tax Board, in coordination with
financial institutions doing business in this state, shall operate a
Financial Institution Record Match System utilizing automated data
exchanges to the maximum extent feasible.
(2) The Franchise Tax Board shall prescribe any rules and
regulations that may be necessary or appropriate to implement this
section. These rules and regulations shall include all of the
following:
(A) A structure by which financial institutions, or their
designated data-processing agents, shall receive from the Franchise
Tax Board the file or files of delinquent debtors that the
institution shall match with its own list of accountholders to
identify delinquent tax debtor accountholders at the institution.
(B) An option by which financial institutions without the
technical ability to process the data exchange, or without the
ability to employ a third-party data processor to process the data
exchange, may forward to the Franchise Tax Board a list of all
accountholders and their social security numbers or other taxpayer
identification numbers, so that the Franchise Tax Board shall match
that list with the file or files of delinquent tax debtors.
(C) Authority for the Franchise Tax Board to exempt a financial
institution from the requirements of this section if the Franchise
Tax Board determines that the financial institution participation
would not generate sufficient revenue to be cost effective for the
Franchise Tax Board.
(D) Authority for the Franchise Tax Board to temporarily suspend
the requirements of this section for a financial institution if a
financial institution provides the Franchise Tax Board with a written
notice from its supervisory banking authority that it is determined
to be undercapitalized, significantly undercapitalized, or critically
undercapitalized as defined by FDIC Regulation 325.103(b)(3), (4),
and (5) or NCUA Regulation 702.102. The notice provided pursuant to
this section shall be subject to the protections of Section 19542.
(b) The Financial Institution Data Record Match System shall not
be subject to any limitation set forth in Chapter 20 (commencing with
Section 7460) of Division 7 of Title 1 of the Government Code.
However, any use of the information provided pursuant to this section
for any purpose other than the collection of delinquent franchise or
income tax or other debts referred to the Franchise Tax Board for
collection, as imposed under Part 5 (commencing with Section 10878),
Part 10 (commencing with Section 17001), Part 10.2 (commencing with
Section 19280), or Part 11 (commencing with Section 23001) shall be a
violation of Section 19542.
(c) (1) To effectuate the Financial Institution Record Match
System, financial institutions subject to this section shall provide
to the Franchise Tax Board on a quarterly basis the name, record
address, and other addresses, social security number or other
taxpayer identification number, and other identifying information for
each delinquent tax debtor, as identified by the Franchise Tax Board
by name and social security number or other taxpayer identification
number, who maintains an account at the institution.
(2) The first data file created by the Franchise Tax Board for
purposes of matching tax debtor records to financial institution
accountholder records shall be limited to 600,000 tax debtor records.
The number of tax debtor records included in a subsequent data file
created by the Franchise Tax Board may be increased by no more than
600,000 tax debtor records greater than the number of tax debtor
records included in the immediately preceding data file until all
eligible tax debtor records are included in the data match file.
(d) Unless otherwise required by law, a financial institution
furnishing a report or providing information to the Franchise Tax
Board pursuant to this section shall not disclose to a depositor or
an accountholder, or a codepositor or coaccountholder, that the name,
address, social security number or other taxpayer identification
number, or other identifying information of that delinquent tax
debtor has been received from or furnished to the Franchise Tax
Board.
(e) A financial institution shall incur no obligation or liability
to any person arising from any of the following:
(1) Furnishing information to the Franchise Tax Board as required
by this section.
(2) Failing to disclose to a depositor or accountholder that the
name, address, social security number or other taxpayer
identification number, or other identifying information of that
delinquent tax debtor was included in the data exchange with the
Franchise Tax Board required by this section.
(3) Any other action taken in good faith to comply with the
requirements of this section.
(f) The Franchise Tax Board may institute civil proceedings to
enforce this section.
(g) Any financial institution that willfully fails to comply with
the rules and regulations promulgated by the Franchise Tax Board for
the administration of delinquent tax collections, unless it is shown
to the satisfaction of the Franchise Tax Board that the failure is
due to reasonable cause, shall be assessed a penalty upon notice and
demand of the Franchise Tax Board and collected in the same manner as
tax. The penalty imposed under this section shall be in an amount
equal to fifty dollars ($50) for each record not provided, but the
total imposed on that financial institution for all such failures
during any calendar year shall not exceed one hundred thousand
dollars ($100,000).
(h) For purposes of this section:
(1) "Account" means any demand deposit account, share or share
draft account, checking or negotiable withdrawal order account,
savings account, time deposit account, or money market mutual fund
account, regardless of whether the account bears interest.
(2) "Financial institution" means:
(A) A depository institution, as defined in Section 1813(c) of
Title 12 of the United States Code.
(B) An institution-affiliated party, as defined in Section 1813(u)
of Title 12 of the United States Code.
(C) Any federal credit union or state credit union, as defined in
Section 1752 of Title 12 of the United States Code, including an
institution-affiliated party of a credit union, as defined in Section
1786(r) of Title 12 of the United States Code.
(D) Any benefit association, insurance company, safe deposit
company, money-market fund, or similar entity authorized to do
business in this state.
(3) "Delinquent tax debtor" means any person liable for any income
or franchise tax or other debt referred to the Franchise Tax Board
for collection as imposed under Part 5 (commencing with Section
10878), Part 10 (commencing with Section 17001), Part 10.2
(commencing with Section 19280), or Part 11 (commencing with Section
23001), including tax, penalties, interest, and fees, where the tax
or debt, including the amount, if any, referred to the Franchise Tax
Board for collection remains unpaid after 30 days from demand for
payment by the Franchise Tax Board, and the person is not making
current timely installment payments on the liability under an
agreement pursuant to Section 19006.
(i) A financial institution shall be reimbursed by the Franchise
Tax Board for actual costs incurred to implement the provisions of
this section. Upon receipt of an invoice from the financial
institution, cost reimbursement by the Franchise Tax Board shall be
limited to the following:
(1) For one-time startup costs of a financial institution, no more
than two thousand five hundred dollars ($2,500).
(2) For data matching costs of a financial institution, other than
one-time startup costs, no more than two hundred fifty dollars
($250) per calendar quarter.
(j) Implementation of this section shall be contingent on the
appropriation of funds for the purposes of this section, and shall be
operative 120 days after that date.
(k) This section shall apply with respect to persons that are
delinquent tax debtors on and after the effective date of the act
adding this section.
SEC. 2. Section 19560 is added to the Revenue
and Taxation Code, to read:
19560. Notwithstanding any law to the contrary, to effectuate the
Financial Institution Record Match System prescribed under Section
19266, the Franchise Tax Board may disclose the name and social
security number or taxpayer identification number to designated
financial institutions or their authorized processing agent for
purposes of matching debtor records to accountholder records at the
financial institution. Any use of the data provided by the Franchise
Tax Board for a purpose other than those identified by Section 19266
is prohibited and considered a violation of Section 19542.
SEC. 3. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.