BILL NUMBER: AB 1307 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 21, 2011
INTRODUCED BY Assembly Member Skinner
FEBRUARY 18, 2011
An act to add Section 6070.5 to the Revenue and Taxation
Code, relating to taxation. An act to amend Section
7145.5 of the Business and Professions Code, to add Section 15624 to
the Government Code, to add Section 607 0.5 to the Revenue
and Taxation Code, and to amend Section 1088.5 of the Unemployment
Insurance Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1307, as amended, Skinner. State Board of Equalization:
seller's permits: refusal to issue.
administration: collections.
The Contractors' State License Law provides for the licensure and
regulation of contractors by the Contractors' State License Board in
the Department of Consumer Affairs. Existing law provides that the
registrar of the Contractors' State License Board may refuse to
issue, reinstate, reactivate, or renew a license or may suspend the
license of a contractor for the failure of the licensee to resolve
all outstanding final liabilities, which include taxes, additions to
tax, penalties, interest, and any fees that may be assessed by the
board, the Department of Industrial Relations, the Employment
Development Department, or the Franchise Tax Board.
This bill would authorize the Contractors' State License board,
except in certain cases, to take the actions specified above for a
licensee's failure to resolve outstanding final liabilities assessed
by the State Board of Equalization.
Existing law requires the Franchise Tax Board to administer
specified taxes and collect those taxes from delinquent tax debtors.
Existing law requires the board, in coordination with financial
institutions doing business in California, 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. Existing law authorizes the board to disclose
specified taxpayer information for purposes of data matching, to
institute civil proceedings for specified purposes, and to impose
specified penalties on financial institutions for failure to provide
records in connection with the match system.
This bill would require the State Board of Equalization to operate
a similar Financial Institution Record Match System in cooperation
with the Franchise Tax Board. This bill would also authorize the
Franchise Tax Board to disclose delinquent tax debtor information
provided to the Franchise Tax Board by the State Board of
Equalization to designated financial institutions for the purpose of
matching debtor records to accountholder records at those financial
institutions, and would provide that the unauthorized use of this
data is a misdemeanor.
The Sales and Use Tax Law provides that every person desiring to
engage in or conduct business as a seller shall apply to the State
Board of Equalization for a permit. That law requires a person
selling tangible personal property for storage, use, or other
consumption in this state to register with, and to obtain a seller's
permit or certification of registration-use tax from, the State Board
of Equalization. The Sales and Use Tax Law requires a seller whose
permit has been previously suspended or revoked to pay the board a
fee of $100 for the renewal or issuance of a permit.
This bill would authorize the board to refuse to issue a seller's
permit to any person submitting an application for a permit if the
person desiring to engage in or conduct business as a seller within
this state has an outstanding final liability with the board for any
amount due, as specified. The bill would also authorize the board, if
the person submitting an application for a seller's permit has
entered into an installment payment agreement and fails to comply
with its terms, to seek revocation of that seller's permit. The bill
would additionally require the board to provide written notice to any
person denied a permit and would allow such a person to request
reconsideration of the denial, in accordance with specified
procedures.
Existing law provides for the payment of unemployment compensation
benefits to eligible unemployed individuals, and requires the
Employment Development Department to implement and administer the
unemployment insurance system in the state. Existing law requires
each employer to file with the department a report of wages paid to
his or her workers and to furnish to each employee a written
statement showing, among other things, the total amount of wages, and
total wages subject to personal income tax, as provided. Existing
law also requires each employer to file with the department specified
information on new employees, and authorizes the use of that
information for specified purposes including, among other things,
providing employer or employee information to the Franchise Tax Board
for the purpose of tax enforcement.
This bill would also authorize the Employment Development
Department to provide employer or employee information to the State
Board of Equalization for the purpose of tax or fee enforcement.
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. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7145.5 of the
Business and Professions Code is amended to read:
7145.5. (a) The registrar may refuse to issue, reinstate,
reactivate, or renew a license or may suspend a license for the
failure of a licensee to resolve all outstanding final liabilities,
which include taxes, additions to tax, penalties, interest, and any
fees that may be assessed by the board, the Department of Industrial
Relations, the Employment Development Department, or
the Franchise Tax Board , or the State Board of
Equalization .
(1) Until the debts covered by this section are satisfied, the
qualifying person and any other personnel of record named on a
license that has been suspended under this section shall be
prohibited from serving in any capacity that is subject to licensure
under this chapter, but shall be permitted to act in the capacity of
a nonsupervising bona fide employee.
(2) The license of any other renewable licensed entity with any of
the same personnel of record that have been assessed an outstanding
liability covered by this section shall be suspended until the debt
has been satisfied or until the same personnel of record disassociate
themselves from the renewable licensed entity.
(b) The refusal to issue a license or the suspension of a license
as provided by this section shall be applicable only if the registrar
has mailed a notice preliminary to the refusal or suspension that
indicates that the license will be refused or suspended by a date
certain. This preliminary notice shall be mailed to the licensee at
least 60 days before the date certain.
(c) In the case of outstanding final liabilities assessed by the
Franchise Tax Board, this section shall be operative within 60 days
after the Contractors' State License Board has provided the Franchise
Tax Board with the information required under Section 30, relating
to licensing information that includes the federal employee
identification number or social security number.
(d) All versions of the application for contractors' licenses
shall include, as part of the application, an authorization by the
applicant, in the form and manner mutually agreeable to the Franchise
Tax Board and the board, for the Franchise Tax Board to disclose the
tax information that is required for the registrar to administer
this section. The Franchise Tax Board may from time to time audit
these authorizations.
(e) In the case of outstanding final liabilities assessed by the
State Board of Equalization, this section shall not apply to any
outstanding final liability if the licensee has entered into an
installment payment agreement for that liability with the State Board
of Equalization and is in compliance with the terms of that
agreement.
SEC. 2. Section 15624 is added to the
Government Code , to read:
15624. (a) The State Board of Equalization shall operate and
implement a Financial Institution Record Match System as described in
Section 19266 of the Revenue and Taxation Code, utilizing automated
data exchanges to the maximum extent feasible, and in cooperation
with the Franchise Tax Board.
(b) Notwithstanding any law to the contrary, to effectuate the
Financial Institution Record Match System, the Franchise Tax Board
may, in addition to authorization provided in Section 19266 of the
Revenue and Taxation Code, disclose delinquent tax debtor information
provided to the Franchise Tax Board by the State Board of
Equalization that includes the name and social security number or
taxpayer identification number to designated financial institutions
or their authorized processing agents 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 this section is prohibited, and shall
be considered a violation of Section 19542 of the Revenue and
Taxation Code.
(c) "Delinquent tax debtor," as used in this section, means any
person liable for any tax, fee, or surcharge amounts, and any
penalty, interest, or other amounts required to be paid to the State
Board of Equalization, where the liability remains unpaid after 30
days from demand for payment by the State Board of Equalization, and
the person is not making current timely installment payments on the
liability under an installment payment agreement as provided by law.
SECTION 1. SEC. 3. Section 6070.5 is
added to the Revenue and Taxation Code, to read:
6070.5. (a) The board may refuse to issue a permit to any person
submitting an application for a permit as required in Section 6066 if
the person desiring to engage in or conduct business as a seller
within this state has an outstanding final liability with the board
for any amount due under this part.
(b) In addition to the provisions of subdivision (a), the board
may also refuse to issue a permit if the person desiring to engage in
or conduct business as a seller within this state is not a natural
person or individual and any person controlling the person desiring
to engage in or conduct business as a seller within this state has an
outstanding final liability with the board as provided in
subdivision (a). For the purposes of this section, "controlling" has
the same meaning as defined in Section 22971 of the Business and
Professions Code.
(c) For purposes of this section, a liability will not be deemed
to be outstanding if the person has entered into an installment
payment agreement pursuant to Section 6832 for any liability and is
in full compliance with the terms of the installment payment
agreement.
(d) If the person submitting an application for a seller's permit
has entered into an installment payment agreement as provided in
subdivision (c) and fails to comply with the terms of the installment
payment agreement, the board may seek revocation of the seller's
permit obtained by the person pursuant to this section.
(e) (1) Whenever any person desiring to engage in or conduct
business as a seller within this state is denied a permit pursuant to
this section, the board shall give to the person written notice of
the denial. The notice of the denial may be served personally, by
mail, or by other means deemed appropriate by the board. If served by
mail, the notice shall be placed in a sealed envelope, with postage
paid, addressed to the person at the address as it appears in the
records of the board. The giving of notice shall be deemed complete
at the time of deposit of the notice at the United States Postal
Service, or a mailbox, subpost office, substation or mail chute
, or other facility regularly maintained or provided by the
United States Postal Service, without extension of time for any
reason. In lieu of mailing, a notice may be served personally by
delivering to the person to be served and service shall be deemed
complete at the time of the delivery. Delivery of notice by other
means deemed appropriate by the board may include, but is not limited
to, electronic transmission. Personal service or delivery by other
means deemed appropriate by the board to a corporation may be made by
delivery of a notice to any person listed on the application as an
officer.
(2) Any person who is denied a seller's permit pursuant to this
section may request reconsideration of the board's denial of the
permit. This request must shall be
submitted in writing within 30 days of the date of the notice of
denial. Timely submission of a written request for reconsideration
will shall afford the person a hearing
in a manner that is consistent with a hearing provided for by Section
6070. If a request for reconsideration is not filed within the
30-day period, the denial becomes final at the end of the 30-day
period.
SEC. 4. Section 1088.5 of the
Unemployment Insurance Code is amended to read:
1088.5. (a) In addition to information reported in accordance
with Section 1088, effective July 1, 1998, each employer shall file,
with the department, the information provided for in subdivision (b)
on new employees.
(b) Each employer shall report the hiring of any employee who
works in this state and to whom the employer anticipates paying
wages.
(c) (1) This section shall not apply to any department, agency, or
instrumentality of the United States.
(2) State agency employers shall not be required to report
employees performing intelligence or counterintelligence functions,
if the head of the agency has determined that reporting pursuant to
this section would endanger the safety of the employee or compromise
an ongoing investigation or intelligence mission.
(d) (1) Employers shall submit a report as described in paragraph
(4) within 20 days of hiring any employee whom the employer is
required to report pursuant to this section.
(2) Notwithstanding subdivision (a), employers transmitting
reports magnetically or electronically shall submit the report by two
monthly transmissions not less than 12 days no more than 16 days
apart.
(3) For purposes of this section, an employer that has employees
in two or more states and that transmits reports magnetically or
electronically may designate one state in which the employer has
employees to which the employer will transmit the report described in
paragraph (4). Any employer that transmits reports pursuant to this
paragraph shall notify the Secretary of Health and Human Services in
writing as to which state the employer designates for the purpose of
sending reports.
(4) The report shall contain the following:
(A) The name, address, and social security number of the
employees.
(B) The employer's name, address, state employer identification
number (if one has been issued), and identifying number assigned to
the employer under Section 6109 of the Internal Revenue Code of 1986.
(C) The first date the employee worked.
(5) Employers may report pursuant to this section by submitting a
copy of the employee's W-4 form, a form provided by the department,
or any other hiring document transmitted by first-class mail,
magnetically, or electronically.
(e) For each failure to report the hiring of an employee, as
required and within the time required by this section, unless the
failure is due to good cause, the department may assess a penalty of
twenty-four dollars ($24), or four hundred ninety dollars ($490) if
the failure is the result of conspiracy between the employer and
employee not to supply the required report or to supply a false or
incomplete report.
(f) Information collected pursuant to this section may be used for
the following purposes:
(1) Administration of this code.
(2) Locating individuals for purposes of establishing paternity
and establishing, modifying, and enforcing child support obligations.
(3) Administration of employment security and workers'
compensation programs.
(4) Providing employer or employee information to the Franchise
Tax Board and the State Board of Equalization for the
purpose of tax or fee enforcement.
(5) Verification of eligibility of applicants for, or recipients
of, the public assistance programs listed in Section 1320b-7(b) of
Title 42 of the United States Code.
(g) For purposes of this section, "employer" includes a labor
union hiring hall.
(h) This section shall become operative on July 1, 1998.
SEC. 5. 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.