BILL NUMBER: SB 1185	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 29, 2012
	AMENDED IN SENATE  APRIL 9, 2012

INTRODUCED BY   Senator Price

                        FEBRUARY 22, 2012

   An act to add  and repeal  Part 12.2 (commencing with
Section 15910)  to  of  Division 3 of Title
2 of  , and to repeal Section 15923 of,  the
Government Code, relating to  the Centralized Intelligence
Partnership Act   underground operations  .


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1185, as amended, Price. Centralized Intelligence Partnership
 Act.   Act: pilot program. 
   Existing law requires various state entities, including, but not
limited to, the State Board of Equalization, the Franchise Tax Board,
and the Department of Justice, to enforce laws relating to the
taxation and legal operation of businesses throughout the state under
their respective jurisdictions.
   This bill would  establish, until January 1, 2018, a pilot
program to  create a multiagency partnership consisting of
 specified state entities   the Employment
Development Department, Franchise Tax Board, and State Board of
Equalization  , to be known as the Centralized Intelligence
Partnership, to collaborate in combating illegal underground
operations by, among other activities, providing a central intake
process and organizational structure, with an administrator and
support staff, to document, review, and evaluate data and complaints.
 The bill would authorize other specified state entities to
participate in the pilot program in an advisory capacity.  The
bill would create an advisory committee, comprised of one
representative from each entity in the partnership,  and those
serving in an advisory capacity, as specified,  to provide
guidance on the activities and operations of the partnership. The
bill would require the advisory committee to the partnership to
determine the appropriate agency to house the processing center for
the partnership. The bill would authorize duly authorized
representatives of members of the partnership to exchange information
for the purpose of investigating illegal underground operations. The
bill would require the partnership,  starting  on
or before July 1, 2014, to annually report to the Legislature and
entities participating in the partnership on its activities. The bill
would require an additional report to be filed with the Legislature
by December 1,  2018   2016  , to include
the number of complaints received by the partnership and cases
investigated or prosecuted, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) According to the Employment Development Department's analysis
of findings made by the Internal Revenue Service, the underground
economy in California is estimated to be between sixty billion
dollars ($60,000,000,000) and one hundred forty billion dollars
($140,000,000,000) each year.
   (b) According to the State Board of Equalization, an 
average   estimate  of eight billion dollars
($8,000,000,000) in corporate, personal, and sales and use taxes goes
uncollected in California each year, with unreported and
underreported economic activity responsible for the vast majority of
that total. 
   (c) For purposes of this section, "underground economy" means the
activities of individuals, businesses, or other entities that
knowingly and intentionally use practices designed to conceal illegal
or fraudulent activities that negatively impact legitimate
businesses, workers, and consumers, as well as deprive the state and
local governments of vital resources.  
   (c) 
    (d) The underground economy hurts all Californians.
Revenues to support government services are lost, workers are forced
to go without basic employment protections, and legitimate businesses
are confronted with unfair competition. 
   (d) 
    (e)  Since the activities of many operating in the
underground economy span across multiple jurisdictions, various joint
agency enforcement efforts have been undertaken to combat the
underground economy, including, but not limited to, the creation of
the Joint Enforcement Strike Force on the Underground Economy in
1993, and the creation of the Economic and Employment Enforcement
Coalition in 2005. Furthermore, various individual agency efforts
have been created, including, but not limited to, the State Board of
Equalization's Statewide Compliance and Outreach Program and the
Contractors' State License Board's Statewide Investigative Fraud
Team. Thus, investigative collaboration among state agencies is not a
new concept in California. Many collaborative efforts are already
under way, pursuant to which investigators periodically meet to
discuss current investigations, collaborate to conduct sting
operations, and develop best practices policies. 
   (e) 
    (f)  Despite significant statewide efforts, California
continues to lose billions of dollars in annual revenue due to the
underground economy. 
   (f) 
    (g)  The Legislature intends this act to enhance
existing efforts to combat the underground economy by
institutionalizing collaboration among state agencies through a
Centralized Intelligence Partnership  , a pilot program 
that acquires relevant data for collaborative data analysis, economic
threat assessment, strategic planning, and provides a referral
tracking and value-added referral disbursement process to monitor the
progress and measure the success of the partnership activities. This
collaborative effort to combat the underground economy will, in
turn, further aid the state in its progress toward preventing human
trafficking. The Legislature recognizes that the state needs to
comprehensively address the underground economy and capitalize on
each agency's enforcement efforts and investigative resources by
creating the Centralized Intelligence Partnership. A key element of
this effort is to authorize and facilitate data and intelligence
sharing among the Centralized Intelligence Partnership and state
agencies. It is the intent of the Legislature in enacting this act to
focus on the criminal and civil prosecution of those operating in
the underground economy in flagrant violation of the law. Businesses
that are in compliance with state employment, safety, licensing, and
tax laws that are found to have committed minor or inadvertent
violations of existing law are to be addressed through other
administrative procedures. 
   (g) 
    (h)  It is the intent of the Legislature that this act
be part of ongoing efforts by the Legislature to combat the
underground economy in this state through legislation.
  SEC. 2.  Part 12.2 (commencing with Section 15910) is added to
Division 3 of Title 2 of the Government Code, to read:

      PART 12.2.  Centralized Intelligence Partnership Act


   15910.  This part shall be known, and may be cited, as the
Centralized Intelligence Partnership Act.
   15912.  (a) The Centralized Intelligence Partnership is hereby
established in state government  as a pilot program  .
   (b) For purposes of this part, the term "partnership" shall refer
to the Centralized Intelligence Partnership.
   15914.   (a)    The partnership shall include
all of the following state entities: 
   (a) California Health and Human Services Agency. 

   (b) Department of Consumer Affairs.  
   (c) Department of Industrial Relations.  
   (d) Department of Insurance.  
   (e) Department of Justice.  
   (f) Department of Motor Vehicles.  
   (g) 
    (1)  Employment Development Department. 
   (h) 
    (2)  Franchise Tax Board. 
   (i) 
    (3)  State Board of Equalization. 
   (b) In addition to the agencies listed in subdivision (a), the
following agencies may participate in the pilot program in an
advisory capacity to the partnership:  
   (1) California Health and Human Services Agency.  
   (2) Department of Consumer Affairs.  
   (3) Department of Industrial Relations.  
   (4) Department of Insurance.  
   (5) Department of Justice.  
   (6) Department of Motor Vehicles.  
   (c) If, in its normal course of investigation, an agency listed in
subdivision (b) discovers a violation of law that would result in
increased tax revenues to the state, that agency shall notify the
appropriate tax agency listed in subdivision (a). 
   15916.  (a) The advisory committee to the Centralized Intelligence
Partnership is hereby established to provide guidance to, and advice
on, the activities and operations of the partnership.
   (b) The advisory committee  is   shall be
 comprised of one representative from each of the entities in
the partnership  listed under subdivision (a) of Section 15914
 . Each representative shall be appointed by the head of the
entity in the partnership and serve at the pleasure of the appointing
authority.  An agency participating in an advisory capacity may
provide a representative to the advisory committee to offer guidance
and advice to the partnership.
   (c) The advisory committee shall meet as needed  ,  but
at least quarterly ,  to conduct its business.
   15918.  (a) To serve the best interests of the state by combating
the underground economy, the partnership shall do all of the
following to combat illegal underground operations:
   (1) Provide a central intake process and organizational structure
to document, review, and evaluate data and complaints.
   (2) Establish a processing center to receive and analyze data,
share complaints, and research leads from the input of each impacted
agency.
   (3) Provide participating and nonparticipating agencies with
value-added investigative leads where collaboration opportunities
exist for felony-level criminal investigations, including, but not
limited to, referring leads to agencies with appropriate enforcement
jurisdiction.
   (4) Provide that each participating and nonparticipating agency
retain jurisdictional authority over whether to pursue partnership
strategies or collaborative investigative leads based upon the
direction of their respective governing structures or available
resources.
   (5) Document and provide intake data analysis, analytic data
findings, referrals, collaborative opportunities, outcomes, emerging
evasion trends, lessons learned, as well as additional enforcement,
administrative, and legislative opportunities.
   (b) The scope of activities and projects undertaken by the
partnership shall be consistent with the amount of funds appropriated
by the Legislature.
   (c) The advisory committee to the partnership shall determine the
appropriate agency to house the processing center for the
partnership.
   (d) The partnership may hire an administrator and staff.
   15920.  Duly authorized representatives of members of the
partnership  , and agencies participating in an advisory
capacity,  may exchange intelligence, data, documents,
information, complaints, or lead referrals for the purpose of
investigating illegal underground operations. Any member or ex-member
of the partnership, any agent employed by any member of the
partnership, or any person who has at any time obtained such
knowledge from any of the foregoing partners or persons, shall not
divulge, or make known in any manner not provided by law, any of the
confidential information received by, or reported to, the
partnership. Information exchanged pursuant to this section shall
retain its confidential status and shall remain subject to the
confidentiality provisions contained in the following provisions:

   (a) California Health and Human Services Agency: Subdivision (c)
of Section 6254 of this code and Section 14100.2 of the Welfare and
Institutions Code.  
   (a) 
    (b)  Department of Consumer Affairs: Section 30 of the
Business and Professions Code and Section 56.29 of the Civil Code.

   (c) Department of Industrial Relations: Sections 11181, 11183, and
15553 of this code, Section 1877 of the Insurance Code, and Sections
92, 138.7, 1026, 3762, 6309, 6322, 6396, and 6412 of the Labor Code.
 
   (d) Department of Insurance: Section 11180 of this code and
Sections 1872.6, 1873, 1874.2, 1875.1, 1877.1, 1877.3, 1877.4, and
1877.5 of the Insurance Code.  
   (b) 
    (e)  Department of Justice: Section 11183  of
the Government Code  . 
   (c) 
    (f)  Department of Motor Vehicles: Sections 1808.2,
1808.4, 1808.5, 1808.6, 1808.21, 1808.24, and 12800.5 of the Vehicle
Code. 
   (d) 
    (g)  Employment Development Department: Sections 1094
and 1095 of the Unemployment Insurance Code. 
   (e) 
    (h)  Franchise Tax Board: Sections 19542, 19542.1, and
19542.3 of the Revenue and Taxation Code. 
   (f) 
    (i)  State Board of Equalization: Section 15619 of
 the Government Code   this code  , Section
42464.8 of the Public Resources Code, and Sections 7056, 7056.5,
8255, 9255, 9255.1, 30455, 38705, 38706, 43651, 45981, 45982, 45983,
45984, 46751, 50159, 50160, 50161, 55381, 60608, and 60609 of the
Revenue and Taxation Code.
   15922.  On or before July 1, 2014, and annually thereafter, the
partnership shall report on its activities and accomplishments to the
Legislature and each entity in the partnership.
   15923.   (a)    The partnership
shall submit to the Legislature on or before December 1, 
2018   2016  , a report  of the pilot program
 that includes, but is not limited to, the following
information: 
   (1) 
    (   a)  The number of leads or complaints
received by the partnership. 
   (2) 
    (   b)  The number of cases investigated or
prosecuted through civil action or criminal prosecution. 
   (3) 
    (   c)  Recommendations for modifying,
eliminating, or continuing the operation of any or all of the
provisions of this part. 

   (b) 
    15924.    This  section  part 
shall remain in effect only until January 1,  2020 
 2018  , and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1,  2020
  2018  , deletes or extends that date.