BILL NUMBER: AB 1424 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 6, 2011
AMENDED IN ASSEMBLY MAY 4, 2011
INTRODUCED BY Committee on Revenue and Taxation (Assembly Members
Perea (Chair), Beall, Charles Calderon, Cedillo, Fuentes, and Gordon)
MARCH 22, 2011
An act to amend Sections 1793.2 and 1793.25 of the Civil
Code, and to amend Sections 6055, 6203.5, 6248, 7096, 7101, 8351, and
30474 of, and to add Sections 7157, 8407, 30483, and 60709 to, the
Revenue and Taxation Code, relating to taxation. An
act to amend Sections 31, 476, and 7145.5 of, and to add Section
494.5 to, the Business and Professions Code, to add Section 12419 to
the Government Code, to add Section 10295.4 to the Public Contract
Code, and to amend Section 19195 of, to add Sections 19265, 19377.5,
and 19571 to, and to add Article 7 (commencing with Section 19291) to
Chapter 5 of Part 10.2 of Division 2 of, the Revenue and Taxation
Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1424, as amended, Committee on Revenue and Taxation.
Tax administration: collection: lenders: vessels: vehicles.
Franchise Tax Board: delinquent tax debt.
The Personal Income Tax Law and the Corporation Tax Law impose
taxes on, or measured by, income. Existing law requires the Franchise
Tax Board to make available as a matter of public record each
calendar year a list of the 250 largest tax delinquencies in excess
of $100,000, and requires the list to include specified information
with respect to each delinquency. Existing law requires every board,
as defined, and the Department of Insurance, upon request of the
Franchise Tax Board, to furnish to the Franchise Tax Board certain
information with respect to every licensee.
This bill would require the Franchise Tax Board to make available
the list of the 250 largest tax delinquencies described above at
least twice each calendar year. This bill would also require the
Franchise Tax Board to include additional information on the list
with respect to each delinquency, including the type, status, and
licence number of any occupational or professional license held by
the person or persons liable for payment of the tax and the names and
titles of the principal officers of the person liable for payment of
the tax if that person is a limited liability company or
corporation. This bill would require a person whose delinquency
appeared on the list and whose name has been removed, as provided, to
comply with the terms of the arranged resolution, and would
authorize the Franchise Tax Board, if the person fails to comply with
the terms of the arranged resolution, to add the person's name to
the list without providing prior written notice, as provided.
This bill would permit a state governmental licensing entity, that
issues professional or occupational licenses, certificates,
registrations, or permits, to suspend, revoke, or refuse to issue a
license if the licensee's name is included on the list of the 250
largest tax delinquencies described above. This bill would also
require those licensing entities to provide to the Franchise Tax
Board the name and social security number or federal taxpayer
identification number of each individual licensee of that entity, and
would require each application for a new license or renewal of a
license to indicate on the application that the law allows the
Franchise Tax Board to share taxpayer information with a board and
requires the licensee to pay his or her state income tax obligation
and that his or her license may be suspended if the state income tax
obligation is not paid. The bill would require the Franchise Tax
Board, if an individual licensee appears on the list of the 250
largest tax delinquencies described above, and the specified
licensing entity has not made a decision regarding suspension or
revocation of the license, to send a notice of suspension to the
licensee. The bill would provide that the license of a licensee who
fails to satisfy the unpaid taxes by a certain date shall be
automatically suspended, except as specified, and would require the
Franchise Tax Board to mail a notice of suspension to the applicable
state governmental licensing entity and to the licensee, and would
provide that the suspension be canceled upon compliance with the tax
obligation. The bill would require the Franchise Tax Board to meet
certain requirements and would make related changes.
The bill would provide that the release or other use of
information received by a state governmental licensing entity
pursuant to these provisions, except as authorized, is punishable as
a misdemeanor. By creating a new crime, the bill would impose a
state-mandated local program.
This bill would also prohibit a state agency from entering into
any contract for the acquisition of goods or services with a
contractor whose name appears on the list of the 250 largest tax
delinquencies described above.
Existing law authorizes the Franchise Tax Board to collect
specified amounts for the Department of Industrial Relations and
specified amounts imposed by a court pursuant to specified
procedures.
This bill would authorize the Franchise Tax Board to enter into an
agreement to collect any delinquent tax debt due to the Internal
Revenue Service or any other state imposing an income tax or tax
measured by income pursuant to specified procedures, provided that
the Internal Revenue Service or that state has entered into an
agreement to collect delinquent tax debts due to the Franchise Tax
Board, and the agreements do not cause the net displacement of civil
service employees, as specified. This bill would require the
Controller, upon execution of a reciprocal agreement between the
Franchise Tax Board and any other state imposing an income tax or tax
measured by income, to offset any delinquent tax debt due to that
other state from a person or entity, against any refund under the
Personal Income Tax Law or the Corporation Tax Law owed to that
person or entity, as provided.
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.
Existing law requires the State Board of Equalization to reimburse
a manufacturer for an amount equal to the sales tax which the
manufacturer pays to or for the buyer when providing a replacement
vehicle or making restitution pursuant to the Song-Beverly Consumer
Warranty Act, subject to satisfactory proof, as specified.
This bill also would also provide that the board is to reimburse a
manufacturer for an amount equal to the use tax which the
manufacturer pays to or for the buyer or lessee when providing a
replacement vehicle or making restitution pursuant to the
Song-Beverly Consumer Warranty Act, subject to satisfactory proof, as
specified.
This bill would make other conforming changes, and would also
state that the above provisions of the bill are declaratory of
existing law.
The Sales and Use Tax Law imposes a tax on retailers measured by
the gross receipts from the sale of tangible personal property sold
at retail in this state, or on the storage, use, or other consumption
in this state of tangible personal property purchased from a
retailer for storage, use, or other consumption in this state,
measured by sales price.
The Sales and Use Tax Law also allows a retailer to be relieved
from liability for sales or use tax when the measure of the tax is
represented by accounts that have been found to be worthless and
charged off for income tax purposes. Retailers who sell their
accounts receivables, or lenders who purchase them, are entitled to a
refund or a deduction for the taxes paid to the board on that
portion of the accounts receivable that is written off as worthless.
In these circumstances, existing law requires the retailer and the
lender, prior to claiming any deduction or refund, to file an
election form with the board, signed by both parties, designating
which party is entitled to claim the deduction or refund.
This bill would remove the requirement that the election form be
filed with the board and would instead require the election form to
be retained by the retailer and the lender.
Under the Sales and Use Tax Law, there is a presumption that a
vehicle, vessel, or aircraft shipped or brought into this state
within 12 months from the date of its purchase was acquired for
storage, use, or other consumption in this state and is subject to
the use tax if specified conditions are met. Under existing law, this
presumption does not apply if a vessel was brought into the state
exclusively for the purpose of repair, retrofit, or modification
performed in a permitted facility that is licensed to do business in
the county in which it is located.
This bill would, for purposes of the exclusion from this
presumption, also allow the repair, retrofit, or modification to be
performed in a permitted facility that is licensed to do business in
the city or city and county in which it is located, if the city or
city and county so requires, or performed in permitted facility in a
county in which it is not required to be licensed.
The Bradley-Burns Uniform Local Sales and Use Tax authorizes
counties and cities to impose local sales and use taxes in conformity
with the Sales and Use Tax Law, and existing law authorizes
districts to impose transactions and use taxes in accordance with
Transactions and Use Tax Law are incorporated into these laws.
Section 2230 of the Revenue and Taxation Code provides that the state
will reimburse counties and cities for revenue losses caused by the
enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for sales and use tax revenues
lost by them pursuant to this bill.
Existing law requires the State Board of Equalization to
administer the Sales and Use Tax Law and authorizes the board to
undertake collection action on delinquent accounts, including issuing
a levy or notice to withhold. A taxpayer may file a claim with the
Board of Equalization for reimbursement of bank charges or any other
reasonable 3rd-party check charge fees incurred by the taxpayer as a
direct result of an erroneous levy or notice to withhold by the
board.
This bill would additionally authorize a taxpayer to file a
reimbursement claim with the board for bank charges and other
reasonable 3rd-party check charge fees incurred as a direct result of
an erroneous processing action or erroneous collection action by the
board.
Existing law authorizes the State Board of Equalization and the
Controller's office to use specified collection tools with respect to
delinquent accounts and liabilities.
This bill would authorize the board and the Controller's office to
collect restitution orders under specified laws, and a specified
penalty, awarded to the state by a court in criminal proceedings, in
the same manner as tax liabilities.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 31 of the Business
and Professions Code is amended to read:
31. (a) As used in this section, "board" means any entity listed
in Section 101, the entities referred to in Sections 1000 and 3600,
the State Bar, the Department of Real Estate, and any other state
agency that issues a license, certificate, or registration
authorizing a person to engage in a business or profession.
(b) Each applicant for the issuance or renewal of a license,
certificate, registration, or other means to engage in a business or
profession regulated by a board who is not in compliance with a
judgment or order for support shall be subject to Section 17520 of
the Family Code.
(c) "Compliance with a judgment or order for support" has the
meaning given in paragraph (4) of subdivision (a) of Section 17520 of
the Family Code.
(d) Each licensee whose name appears on a list of the 250 largest
tax delinquencies pursuant to Section 19195 of the Revenue and
Taxation Code shall be subject to Section 494.5 or 7145.5 or to
Section 19265 of the Revenue and Taxation Code.
(e) Each application for a new license or renewal of a license
shall indicate on the application that the law allows the Franchise
Tax Board to share taxpayer information with a board and requires the
licensee to pay his or her state income tax obligation and that his
or her license may be suspended if the state income tax obligation is
not paid.
SEC. 2. Section 476 of the Business and
Professions Code is amended to read:
476. Nothing (a)
Except as provided in subdivision (b), nothing in this division
shall apply to the licensure or registration of persons pursuant to
Chapter 4 (commencing with Section 6000) of Division 3, or pursuant
to Division 9 (commencing with Section 23000) or pursuant to Chapter
5 (commencing with Section 19800) of Division 8.
(b) Section 494.5 shall apply to the licensure of persons
authorized to practice law pursuant to Chapter 4 (commencing with
Section 6000) of Division 3, and the licensure or registration of
persons pursuant to Chapter 5 (commencing with Section 19800) of
Division 8 or pursuant to Division 9 (commencing with Section 23000).
SEC. 3. Section 494.5 is added to the
Business and Professions Code , to read:
494.5. (a) A state governmental licensing entity may refuse to
issue, reinstate, reactivate, or renew a license or may suspend a
license if a licensee's name is included on a certified list.
(1) Until the liabilities covered by this section are satisfied,
the qualifying person and any other personnel of record named on a
license who have been suspended under this section shall be
prohibited from serving in any capacity that is subject to licensure,
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 who have been assessed an outstanding
liability covered by this section shall be suspended until the
liability has been satisfied or until the same personnel of record
disassociate themselves from the renewable licensed entity.
(b) For purposes of this section:
(1) "Certified list" means a list provided by the Franchise Tax
Board of persons whose names appear on a list of the 250 largest tax
delinquencies pursuant to Section 19195 of the Revenue and Taxation
Code.
(2) "License" includes a certificate, registration, or any other
authorization to engage in a profession or occupation issued by a
state governmental licensing entity. "License" includes a driver's
license issued pursuant to Chapter 1 (commencing with Section 12500)
of Division 6 of the Vehicle Code.
(3) "Licensee" means an individual authorized by a license to
drive a motor vehicle or authorized by a license, certificate,
registration, or other authorization to engage in a profession or
occupation issued by a state governmental licensing entity.
(4) (A) "State governmental licensing entity" means any entity
listed in Section 101, 1000, or 19420, the office of the Attorney
General, the Department of Insurance, the Department of Motor
Vehicles, the State Bar of California, the Department of Real Estate,
and any other state agency, board, or commission that issues a
license, certificate, or registration authorizing an individual to
engage in a profession or occupation, including any certificate,
business or occupational license, or permit or license issued by the
Department of Motor Vehicles or the Department of the California
Highway Patrol.
(B) "State governmental licensing entity" shall not include any
entity described in subparagraph (A) that has elected to decline to
exercise the authority provided by this section to suspend or refuse
to issue, reinstate, reactivate, or renew the license of a licensee
for failure to pay the taxes described in subdivision (a). An
election under this subparagraph shall not be valid unless
notification of that election has been provided to the Franchise Tax
Board at the time and in the manner prescribed by the Franchise Tax
Board.
(c) The Franchise Tax Board shall submit a certified list to state
governmental licensing entities.
(d) Notwithstanding any other law, all state governmental
licensing entities shall collect the social security number or the
federal taxpayer identification number from all applicants for the
purposes of matching the names of the certified list provided by the
Franchise Tax Board to applicants and licensees.
(e) (1) Each state governmental licensing entity shall determine
whether an applicant or licensee is on the most recent certified list
provided by the Franchise Tax Board. The state governmental
licensing entity shall have the authority to withhold issuance or
renewal of the license of any applicant on the list or to suspend the
license of any licensee on the list.
(2) If an applicant or licensee is on a certified list, the state
governmental licensing entity shall immediately provide a preliminary
notice to the applicant or licensee of the entity's intent to
suspend or withhold issuance or renewal of the license. The
preliminary notice shall be delivered personally or by mail to the
applicant's or licensee's last known mailing address on file with the
state governmental licensing entity within 30 days of receipt of the
certified list. Service by mail shall be completed in accordance
with Section 1013 of the Code of Civil Procedure.
(A) The state governmental licensing entity shall issue a
temporary license valid for a period of 90 days to any applicant
whose name is on a certified list if the applicant is otherwise
eligible for a license.
(B) The 90-day time period for a temporary license shall not be
extended. Only one temporary license shall be issued during a regular
license term and the term of the temporary license shall coincide
with the first 90 days of the regular license term. A license for the
full term or the remainder of the license term may be issued or
renewed only upon compliance with this section.
(C) In the event that a license is suspended or an application for
a license or the renewal of a license is denied pursuant to this
section, any funds paid by the applicant or licensee shall not be
refunded by the state governmental licensing entity.
(f) A state governmental licensing entity shall make a final
determination to refuse to issue or to suspend a license pursuant to
this section no sooner than 30 days and no later than 90 days of the
mailing of the preliminary notice described in paragraph (2) of
subdivision (e). The procedures in the administrative adjudication
provisions of the Administrative Procedure Act (Chapter 4.5
(commencing with Section 11400) and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code) shall not apply to the revocation or suspension of a license
pursuant to this section.
(g) Notices shall be developed by each state governmental
licensing entity. The notice shall include the address and telephone
number of the Franchise Tax Board, and shall emphasize the necessity
of obtaining a release from the Franchise Tax Board as a condition
for the issuance, renewal, or continued valid status of a license or
licenses.
(1) The notice shall inform the applicant that the state
governmental licensing entity shall issue a temporary license, as
provided in subparagraph (A) of paragraph (2) of subdivision (e), for
90 calendar days if the applicant is otherwise eligible and that
upon expiration of that time period, the license will be denied
unless the state governmental licensing entity has received a release
from the Franchise Tax Board.
(2) The notice shall inform the licensee that any license
suspended under this section will remain suspended unless the state
governmental licensing entity receives a release along with
applications and fees, if applicable, to reinstate the license.
(3) The notice shall also inform the applicant or licensee that if
an application is denied or a license is suspended pursuant to this
section, any moneys paid by the applicant or licensee shall not be
refunded by the state governmental licensing entity. The state
governmental licensing entity shall also develop a form that the
applicant or licensee shall use to request a release by the Franchise
Tax Board. A copy of this form shall be included with every notice
sent pursuant to this subdivision.
(h) If the applicant or licensee wishes to challenge the
submission of his or her name on a certified list, the applicant or
licensee shall make a timely written request for release to the
Franchise Tax Board. The Franchise Tax Board shall immediately send a
release to the appropriate state governmental licensing entity and
the applicant or licensee, if any of the following conditions are
met:
(1) The applicant or licensee has complied with the tax
obligation, either by payment of the unpaid taxes or entry into an
installment payment agreement, as described in Section 19008 of the
Revenue and Taxation Code, to satisfy the unpaid taxes.
(2) The applicant or licensee has submitted a request for release
not later than 45 days after the applicant's or licensee's receipt of
a preliminary notice described in paragraph (2) of subdivision (e),
but the Franchise Tax Board will be unable to complete the release
review and send notice of its findings to the applicant or licensee
and state governmental licensing entity within 45 days after the
Franchise Tax Board's receipt of the applicant's or licensee's
request for release. Whenever a release is granted under this
paragraph, and, notwithstanding that release, the applicable license
or licenses have been suspended erroneously, the state governmental
licensing entity shall reinstate the applicable licenses with
retroactive effect back to the date of the erroneous suspension and
that suspension shall not be reflected on any license record.
(3) The applicant or licensee is unable to pay the outstanding
liability due to a current financial hardship, as determined by the
Franchise Tax Board.
(i) An applicant or licensee is required to act with diligence in
responding to notices from the state governmental licensing entity
and the Franchise Tax Board with the recognition that the temporary
license will lapse or the license suspension will go into effect
after 90 days and that the Franchise Tax Board must have time to act
within that period. An applicant's or licensee's delay in acting,
without good cause, which directly results in the inability of the
Franchise Tax Board to complete a review of the applicant's or
licensee's request for release shall not constitute the diligence
required under this section which would justify the issuance of a
release. An applicant or licensee shall have the burden of
establishing that he or she diligently responded to notices from the
state governmental licensing entity or the Franchise Tax Board and
that any delay was not without good cause.
(j) The Franchise Tax Board shall create release forms for use
pursuant to this section. When the applicant or licensee has complied
with the tax obligation, either by payment of the unpaid taxes or
entry into an installment payment agreement, the Franchise Tax Board
shall mail a release form to the applicant or licensee and provide a
release to the appropriate state governmental licensing entity. Any
state governmental licensing entity that has received a release from
the Franchise Tax Board pursuant to this subdivision shall process
the release within five business days of its receipt. If the
Franchise Tax Board determines subsequent to the issuance of a
release that the licensee has not complied with their installment
payment agreement, the Franchise Tax Board may notify the state
governmental licensing entity and the licensee in a format prescribed
by the Franchise Tax Board that the licensee is not in compliance
and the release shall be rescinded. The Franchise Tax Board may, when
it is economically feasible for the state governmental licensing
entity to develop an automated process for complying with this
subdivision, notify the state governmental licensing entity in a
manner prescribed by the Franchise Tax Board, that the licensee has
not complied with the installment payment agreement. Upon receipt of
this notice, the state governmental licensing entity shall
immediately notify the licensee on a form prescribed by the state
governmental licensing entity that the licensee's license will be
suspended on a specific date, and this date shall be no longer than
30 days from the date the form is mailed. The licensee shall be
further notified that the license will remain suspended until a new
release is issued in accordance with subdivision (h).
(k) The Franchise Tax Board may enter into interagency agreements
with the state governmental licensing entities necessary to implement
this section, to the extent that it is cost effective to implement
this section.
(l) Notwithstanding any other law, a state governmental licensing
entity, with the approval of the appropriate department director or
governing body, may impose a fee on a licensee whose license has been
suspended pursuant to this section. The fee shall not exceed the
amount necessary for the state governmental licensing entity to cover
its costs in carrying out the provisions of this section. Fees
imposed pursuant to this section shall be deposited in the fund in
which other fees imposed by the state governmental licensing entity
are deposited and shall be available to that entity upon
appropriation in the annual Budget Act.
(m) The process described in subdivision (h) shall constitute the
sole administrative remedy for contesting the issuance of a temporary
license or the denial or suspension of a license under this section.
The procedures specified in the administrative adjudication
provisions of the Administrative Procedure Act (Chapter 4.5
(commencing with Section 11400) and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code) shall not apply to the denial, suspension, or failure to issue
or renew a license or the issuance of a temporary license pursuant to
this section.
(n) Any state governmental licensing entity receiving an inquiry
as to the licensed status of an applicant or licensee who has had a
license denied or suspended under this section or who has been
granted a temporary license under this section shall respond only
that the license was denied or suspended or the temporary license was
issued pursuant to this section. Information collected pursuant to
this section by any state agency, board, or department shall be
subject to the Information Practices Act of 1977 (Chapter 1
(commencing with Section 1798) of Title 1.8 of Part 4 of Division 3
of the Civil Code).
(o) Any rules and regulations issued pursuant to this section by
any state agency, board, or department may be adopted as emergency
regulations in accordance with the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
The adoption of these regulations shall be deemed an emergency and
necessary for the immediate preservation of the public peace, health,
and safety, or general welfare. The regulations shall become
effective immediately upon filing with the Secretary of State.
(p) The Franchise Tax Board and state governmental licensing
entities, as appropriate, shall adopt regulations as necessary to
implement this section.
(q) (1) Neither the state governmental licensing entity, nor any
officer, employee, or agent, or former officer, employee, or agent of
a state governmental licensing entity, may disclose or use any
information obtained from the Franchise Tax Board, pursuant to this
section, except to inform the public of the suspension of a license
pursuant to this section. The release or other use of information
received by a state governmental licensing entity pursuant to this
section, except as authorized by this section, is punishable as a
misdemeanor. This subdivision may not be interpreted to prevent the
State Bar of California from filing a request with the Supreme Court
of California to suspend a member of the bar pursuant to this
section.
(2) To the extent permitted under federal law, a suspension or
revocation of a license pursuant to this section shall not be
reported to the National Practitioner Data Bank.
(r) If any provision of this section or the application thereof to
any person or circumstance is held invalid, that invalidity shall
not affect other provisions or applications of this section that can
be given effect without the invalid provision or application, and to
this end the provisions of this section are severable.
(s) All rights to review afforded by this section to an applicant
shall also be afforded to a licensee.
(t) (1) If the state governmental licensing entity, as defined in
Section 19265 of the Revenue and Taxation Code, does not suspend,
revoke, or deny renewal of a license within 90 days of the mailing of
preliminary notice as described in subdivision (f), the Franchise
Tax Board is authorized to suspend the license pursuant to Section
19265 of the Revenue and Taxation Code.
(2) If the state governmental licensing entity has not suspended,
revoked, or denied the renewal of a license within 90 days of the
mailing of the preliminary notice as described in subdivision (e),
the state governmental licensing entity shall promptly notify the
Franchise Tax Board and the licensee. The notification shall include
the reason why no action was taken by the state governmental
licensing entity.
(3) If the election described in subparagraph (B) of paragraph (4)
of subdivision (b) has been made, the Franchise Tax Board is
authorized to suspend, pursuant to Section 19265 of the Revenue and
Taxation Code, the license of a licensee subject to the jurisdiction
of the entity that made that election.
(u) Unless otherwise provided in this section, the policies,
practices, and procedures of a state governmental licensing entity
with respect to license suspensions under this section shall be the
same as those applicable with respect to suspensions pursuant to
Section 17520 of the Family Code.
(v) No provision of this section shall be interpreted to allow a
court to review and prevent the collection of income taxes prior to
the payment of those taxes in violation of the California
Constitution.
(w) This section shall apply to any licensee whose name appears on
a list of the 250 largest tax delinquencies pursuant to Section
19195 of the Revenue and Taxation Code on or after January 1, 2012.
SEC. 4. 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.
(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) This section shall not be interpreted to conflict with the
suspension of a license pursuant to Section 494.5 of this code or
Section 19265 of the Revenue and Taxation Code.
SEC. 5. Section 12419.13 is added to the
Government Code , to read:
12419.13. (a) (1) The Controller shall, upon execution of a
reciprocal agreement between the Franchise Tax Board and any other
state imposing an income tax or tax measured by income, offset any
delinquent tax debt due to that other state from a person or entity,
against any refund under the Personal Income Tax Law or the
Corporation Tax Law owed to that person or entity.
(2) Standards and procedures for submission of requests for
offsets shall be as prescribed by the Controller.
(3) Payment of the offset amount shall occur only after other
offset requests for debts owed by a person or entity to this state or
the federal government have been satisfied in accordance with the
priority established under Section 12419.3.
(b) The reciprocal agreement identified in subdivision (a) shall
prescribe the manner in which the administrative costs of the
Controller and the Franchise Tax Board shall be reimbursed.
SEC. 6. Section 10295.4 is added to the
Public Contract Code , to read:
10295.4. (a) Notwithstanding any other law, a state agency shall
not enter into any contract for the acquisition of goods or services
with a contractor whose name appears on the list
of the 250 largest tax delinquencies
pursuant to Section 19195 of the Revenue and Taxation Code. Any
contract entered into in violation of this subdivision is void and
unenforceable.
(b) This section shall apply to any contract executed on or after
January 1, 2012.
SEC. 7. Section 19195 of the Revenue and
Taxation Code is amended to read:
19195. (a) Notwithstanding any other provision of law, including
Section 6254.21 of the Government Code, the Franchise Tax Board shall
make available as a matter of public record at least twice
each calendar year a list of the 250 largest tax delinquencies
in excess of one hundred thousand dollars ($100,000) under Part 10
and Part 11 of this division , as of December 31 of the
preceding year . For purposes of compiling the list, a tax
delinquency means the total amount owed by a taxpayer to the State of
California for which a notice of state tax lien has been recorded in
any county recorder's office in this state, pursuant to Chapter 14
(commencing with Section 7150) of Division 7 of Title 1 of the
Government Code.
(b) For purposes of the list, a tax delinquency does not include
any of the following and may not be included on the list:
(1) A delinquency for which payment arrangements have been agreed
to by both the taxpayer and the Franchise Tax Board and the taxpayer
is in compliance with the arrangement.
(2) A delinquency for which the taxpayer has filed for bankruptcy
protection pursuant to Title 11 of the United States Code.
(3) A delinquency for which the person or persons liable for the
tax have contacted the Franchise Tax Board and for which resolution
of the tax delinquency has not been rejected
been accepted by the Franchise Tax Board.
(c) Each annual list shall, with respect to
each delinquency, include all the following:
(1) The name of the person or persons liable for payment of the
tax and that person's or persons' address.
(2) The amount of tax delinquency as shown on the notice or
notices of state tax lien and any applicable interest or penalties,
less any amounts paid.
(3) The earliest date that a notice of state tax lien was filed.
(4) The type of tax that is delinquent.
(5) The type, status, and license number of any occupational or
professional license held by the person or persons liable for payment
of the tax.
(6) The names and titles of the principal officers of the person
liable for payment of the tax if that person is a limited liability
company or corporation.
(d) Prior to making a tax delinquency a matter of public record as
required by this section, the Franchise Tax Board shall provide a
preliminary written notice to the person or persons liable for the
tax by certified mail, return receipt requested. If within 30 days
after issuance of the notice, the person or persons do not remit the
amount due or make arrangements with the Franchise Tax Board for
payment of the amount due, the tax delinquency shall be included on
the list.
(e) The annual list described in subdivision
(a) shall include the following:
(1) The telephone number and address of the Franchise Tax Board
office to contact if a person believes placement of his or her name
on the list is in error.
(2) The aggregate number of persons that have appeared on the list
who have satisfied their delinquencies in their entirety and the
dollar amounts, in the aggregate, that have been paid attributable to
those delinquencies.
(f) As promptly as feasible, but no later than five business days
from the occurrence of any of the following, the Franchise Tax Board
shall remove that taxpayer's name from the list of tax delinquencies:
(1) Tax delinquencies for which the person liable for the tax has
contacted the Franchise Tax Board and resolution of the delinquency
has been arranged.
(2) Tax delinquencies for which the Franchise Tax Board has
verified that an active bankruptcy proceeding has been initiated.
(3) Tax delinquencies for which the Franchise Tax Board has
verified that a bankruptcy proceeding has been completed and there
are no assets available with which to pay the delinquent amount or
amounts.
(4) Tax delinquencies that the Franchise Tax Board has determined
to be uncollectible.
(g) A person whose delinquency appears on the annual
list, and who satisfies that delinquency in whole or in
part, may request the Franchise Tax Board to include in its
annual list any payments that person made to satisfy the
delinquency. Upon receipt of that request, the Franchise Tax Board
shall include those payments on the list as promptly as feasible.
(h) Notwithstanding subdivision (a), a person whose delinquency
appeared on the list and whose name has been removed pursuant to
paragraph (1) of subdivision (f) shall comply with the terms of the
arranged resolution. If the person fails to do so, the Franchise Tax
Board may add that person's name to the list of delinquencies without
providing the prior written notice otherwise required by subdivision
(d).
SEC. 8. Section 19265 is added to the
Revenue and Taxation Code , to read:
19265. (a) (1) All state governmental licensing entities issuing
professional or occupational licenses, certificates, registrations,
or permits shall provide to the Franchise Tax Board the name and
social security number or federal taxpayer identification number, as
applicable, of each licensee of that state governmental licensing
entity.
(2) If any licensee appears on a list of the 250 largest tax
delinquencies pursuant to Section 19195, and the license of that
licensee has not been suspended, revoked, or denied by the applicable
state governmental licensing entity pursuant to Section 494.5 of the
Business and Professions Code, then the Franchise Tax Board shall
mail a preliminary notice of suspension to the licensee indicating
that the license will be suspended by a date certain, which shall be
at least 60 days after the mailing of the preliminary notice, unless
prior to the date certain the licensee pays the unpaid taxes or
enters into an installment payment agreement, as described in Section
19008, to satisfy the unpaid taxes. The preliminary notice shall
also advise the licensee of the opportunity to request deferral or
cancellation of a suspension pursuant to subdivision (b).
(3) If any licensee subject to paragraph (2) fails to pay the
unpaid taxes or to enter into an installment payment agreement, as
described in Section 19008, to satisfy the unpaid taxes prior to the
date certain listed in the preliminary notice of suspension, his or
her license shall be automatically suspended by operation of this
section, except as provided in subdivision (b), and the Franchise Tax
Board shall provide a notice of suspension to the applicable state
governmental licensing entity and shall mail a notice of suspension
to the licensee. The rights, powers, and privileges of any licensee
whose license to drive a motor vehicle, professional or occupational
license, certificate, registration, or permit has been suspended
pursuant to this section shall be subject to the same prohibitions,
limitations, and restrictions as if the license to drive a motor
vehicle, professional or occupational license, certificate,
registration, or permit were suspended by the state governmental
licensing entity that issued the professional or occupational
license, certificate, registration, or permit.
(4) (A) Upon compliance by the licensee with the tax obligation,
either by payment of the unpaid taxes or entry into an installment
payment agreement, as described in Section 19008, to satisfy the
unpaid taxes, a suspension pursuant to this subdivision shall be
canceled. The Franchise Tax Board shall, within 10 business days of
compliance by the licensee with the tax obligation, notify both the
state governmental licensing entity and the licensee that the unpaid
taxes have been paid or that an installment payment agreement, as
described in Section 19008, has been entered into to satisfy the
unpaid taxes and that the suspension has been canceled.
(B) Whenever a suspension is canceled under this paragraph and the
applicable license or licenses have been suspended in error, the
Franchise Tax Board shall notify the state governmental licensing
entity to reinstate all applicable licenses back to the date of
suspension and expunge any notation of that suspension from the
licensee's record.
(5) If a license is not suspended, or if the suspension of a
license is canceled, based on the licensee entering into an
installment payment agreement as described in Section 19008, and the
licensee fails to comply with the terms of the installment payment
agreement, that license shall be suspended as of the date that is 30
days after the date of termination of that installment payment
agreement. If a license is suspended pursuant to this paragraph, the
Franchise Tax Board shall provide notice of suspension to the
applicable state governmental licensing entity and mail a notice of
suspension to the licensee.
(6) State governmental licensing entities shall provide to the
Franchise Tax Board the information required by this subdivision at a
time that the Franchise Tax Board may require.
(b) (1) The Franchise Tax Board may defer or cancel any suspension
authorized by this section if a licensee is unable to pay the
liability due to a current financial hardship. The Franchise Tax
Board shall, if requested by the licensee in writing, provide for an
administrative hearing to determine if the licensee is unable to pay
the liability due to a current financial hardship.
(2) The request for a hearing specified in paragraph (1) shall be
made in writing within 30 days from the mailing date of the
preliminary notice described in subdivision (a).
(3) The Franchise Tax Board shall conduct a hearing within 30 days
after receipt of a request pursuant to paragraph (1), unless the
board postpones the hearing, upon a showing of good cause by the
licensee, in which case a suspension pursuant to subdivision (a)
shall be deferred until the hearing has been completed.
(4) A licensee seeking relief under this subdivision shall only be
entitled to relief described in paragraph (1) if the licensee
provides the Franchise Tax Board with financial documents that
substantiate a financial hardship, and agrees to an acceptable
payment arrangement.
(5) If the deferral of a suspension of a license under this
subdivision is no longer operative, that license shall be suspended
as of the date that is 30 days after the date the deferral is no
longer operative. If a license is suspended pursuant to this
paragraph, the Franchise Tax Board shall provide notice of suspension
to the applicable state governmental licensing entity and mail a
notice of suspension to the licensee.
(c) For purposes of this section and Section 19571, the following
definitions shall apply:
(1) "Financial hardship" means financial hardship within the
meaning of Section 19008, as determined by the Franchise Tax Board,
where the licensee is financially unable to pay any part of the
amount described in subdivision (a) and the licensee is unable to
qualify for an installment payment arrangement as provided for by
Section 19008. In order to establish the existence of a financial
hardship, the licensee shall submit any information, including
information related to reasonable business and personal expenses,
requested by the Franchise Tax Board for the purpose of making that
determination.
(2) "License" includes a certificate, registration, or any other
authorization to engage in a profession or occupation issued by a
state governmental licensing entity. "License" includes a driver's
license issued pursuant to Chapter 1 (commencing with Section 12500)
of Division 6 of the Vehicle Code.
(3) "Licensee" means an individual authorized by a license to
drive a motor vehicle or authorized by a license, certificate,
registration, or other authorization to engage in a profession or
occupation issued by a state governmental licensing entity.
(4) "State governmental licensing entity" means any entity listed
in Section 101, 1000, or 19420 of the Business and Professions Code,
the office of the Attorney General, the Department of Insurance, the
Department of Motor Vehicles, the Department of Real Estate, and any
other state agency, board, or commission that issues a license,
certificate, or registration authorizing an individual to engage in a
profession or occupation, including any certificate, business or
occupational license, or permit or license issued by the Department
of Motor Vehicles or the Department of the California Highway Patrol.
"State governmental licensing entity" shall not include the
Department of Alcoholic Beverage Control or the State Bar of
California.
(d) Notwithstanding any other law, a state governmental licensing
entity may, with the approval of the appropriate department director
or governing body, impose a fee on licensees whose license has been
suspended as described in subdivision (a). The fee shall not exceed
the amount necessary for the state governmental licensing entity to
cover its costs in carrying out the provisions of this section. Fees
imposed pursuant to this section shall be deposited in the fund in
which other fees imposed by the state governmental licensing entity
are deposited and shall be available to that entity upon
appropriation in the annual Budget Act.
(e) The process described in subdivision (b) shall constitute the
sole administrative remedy for contesting the suspension of a license
under this section. The procedures in the administrative
adjudication provisions of the Administrative Procedure Act (Chapter
4.5 (commencing with Section 11400) and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code) shall not apply to the suspension of a license pursuant to this
section.
(f) This section shall apply to any licensee whose name appears
on a list of the 250 largest tax delinquencies pursuant to Section
19195 on or after January 1, 2012.
SEC. 9. Article 7 (commencing with Section 19291)
is added to Chapter 5 of Part 10.2 of Division 2 of the
Revenue and Taxation Code , to read:
Article 7. Collection of Tax Debts Due to the Internal Revenue
Service or Other States
19291. (a) The Franchise Tax Board may enter into an agreement to
collect any delinquent tax debt due to the Internal Revenue Service
or any other state imposing an income tax or tax measured by income
if, pursuant to Section 19377.5, the Internal Revenue Service or that
state has entered into an agreement to collect delinquent tax debts
due the Franchise Tax Board.
(b) Upon written notice to the debtor from the Franchise Tax
Board, any amount referred to the Franchise Tax Board under
subdivision (a) shall be treated as final and due and payable to the
State of California, and shall be collected from the debtor by the
Franchise Tax Board in any manner authorized under the law for
collection of a delinquent income tax liability, including, but not
limited to, the recording of a notice of state tax lien under Article
2 (commencing with Section 7170) of Chapter 14 of Division 7 of
Title 1 of the Government Code, and the issuance of an order and levy
under Article 4 (commencing with Section 706.070) of Chapter 5 of
Division 2 of Title 9 of Part 2 of the Code of Civil Procedure in the
manner provided for earnings withholding orders for taxes.
(c) Part 10 (commencing with Section 17001), this part, Part 10.7
(commencing with Section 21001), and Part 11 (commencing with Section
23001) shall apply to amounts referred under this section in the
same manner and with the same force and effect and to the full extent
as if the language of those laws had been incorporated in full into
this section, except to the extent that any provision is either
inconsistent with this section or is not relevant to this section.
(d) The activities required to implement and administer this
section shall not interfere with the primary mission of the Franchise
Tax Board to administer Part 10 (commencing with Section 17001) and
Part 11 (commencing with Section 23001).
(e) In no event shall a collection under this section be construed
as a payment of income taxes imposed under Part 10 (commencing with
Section 17001) or Part 11 (commencing with Section 23001).
SEC. 10. Section 19377.5 is added to the
Revenue and Taxation Code , to read:
19377.5. (a) The Franchise Tax Board may enter into an agreement
with the Internal Revenue Service or any other state imposing an
income tax or tax measured by income for the purpose of collecting
delinquent tax debts with respect to amounts assessed or imposed
under Part 10 (commencing with Section 17001), this part, or Part 11
(commencing with Section 23001), provided the agreements do not cause
the net displacement of civil service employees. The agreement may
provide, at the discretion of the Franchise Tax Board, the rate of
payment and the manner in which compensation for services shall be
paid.
(b) At the discretion of the Franchise Tax Board, the Internal
Revenue Service or the other state collecting the tax debt pursuant
to subdivision (a) may, as part of the collection process, refer the
tax debt for litigation by its legal representatives in the name of
the Franchise Tax Board.
(c) For purposes of this section, "displacement" includes layoff,
demotion, involuntary transfer to a new class, involuntary transfer
to a new location requiring a change of residence, and time base
reductions. "Displacement" does not include changes in shifts or days
off, nor does it include reassignment to any other position within
the same class and general location.
SEC. 11. Section 19571 is added to the
Revenue and Taxation Code , to read:
19571. (a) The Franchise Tax Board may disclose to state
governmental licensing entities information regarding suspension of a
license pursuant to Section 19265 of this code or Sections 494.5 or
7145.5 of the Business and Professions Code.
(b) Neither the state governmental licensing entity, nor any
officer, employee, or agent, or former officer, employee, or agent of
a state governmental licensing entity, may disclose or use any
information obtained from the Franchise Tax Board, pursuant to this
section, except to inform the public of the suspension of a license
pursuant to Section 19265 of this code or Sections 494.5 or 7145.5 of
the Business and Professions Code.
(c) For purposes of this section, the definitions in Section 19265
shall apply.
SEC. 12. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because a local agency or school district has the
authority to levy service charges, fees, or assessments sufficient to
pay for the program or level of service mandated by this act or
because 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. All matter omitted in this version of the bill
appears in the bill as amended in the Assembly, May 4, 2011. (JR11)