BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1411|
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THIRD READING
Bill No: AB 1411
Author: Assembly Revenue and Taxation Committee
Amended: 5/23/13 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 7/3/13
AYES: Wolk, Beall, DeSaulnier, Hernandez, Liu
NOES: Knight, Emmerson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 52-24, 5/28/13 - See last page for vote
SUBJECT : Tax administration: Financial Institution Record
Match System:
addresses
SOURCE : Franchise Tax Board
DIGEST : This bill authorizes the Franchise Tax Board (FTB) to
use the taxpayers' updated address information obtained through
the Financial Institution Record Match (FIRM) program for
purposes other than tax collection.
ANALYSIS :
Existing law:
1.Provides that use of the taxpayer's last known address is
sufficient to satisfy the reasonable notice element of due
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process.
2.Defines "last known address" as the address that appears on
the last return filed with the FTB unless the taxpayer has
provided the FTB clear and concise written or electronic
notification of a different address or the FTB has an address
it has reason to believe is the most current address for the
taxpayer.
3.Requires financial institutions doing business in this state
to participate in a quarterly data exchange process with the
FTB to match the FTB's, State Board of Equalization's (BOE),
and Employment Development Department's (EDD) lists of
delinquent debtors with the financial institution's account
holder records.
4.Specifies that any use of the information received from FIRM
for purposes other than tax collection is prohibited and is a
misdemeanor.
This bill:
1.Authorizes the FTB to use the taxpayers' updated address
information obtained through the FIRM program for purposes
other than tax collection.
2.Removes the prohibition on using FIRM tax debtor address
information for tax administration purposes.
3.Applies to both individual and corporate taxpayers.
4.Makes conforming, technical changes to provisions relating to
the FIRM program.
Background
Under existing law, the FTB is required, in coordination with
financial institutions doing business in this state, to operate
the FIRM system, which provides a means to match delinquent tax
debtor records with customer records provided by financial
institutions. (SB 86, Senate Budget and Fiscal Review Committee,
Chapter 4, Statutes of 2011). The FIRM system permits the FTB
to identify previously unknown non-interest-bearing deposit
accounts held by delinquent income tax debtors and collect
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outstanding income tax debts.
This data match program is similar to one used by the existing
Financial Institution Data Match program mandated by federal law
for the collection of delinquent child support payments.
Financial institutions doing business in California are required
to conduct records matches on delinquent taxpayers and are
compensated for their costs of compliance with these
requirements.
In 2012, the Legislature authorized the expansion of the FIRM
program to the EDD and BOE. The FTB is required to operate and
administer FIRM for those two agencies, utilizing automated data
exchanges to identify accounts of delinquent tax debtors held at
financial institutions doing business in California.
Related Legislation
SB 1015 (Senate Budget and Fiscal Review Committee, Chapter 37,
Statutes of 2012) requires the EDD and the BOE to participate in
the FTB's FIRM program.
SB 86 (Senate Budget And Fiscal Review Committee, Chapter 14,
Statutes of 2011) requires the FTB, in coordination with
financial institutions doing business in this state, to
establish FIRM using automated data exchanges to the maximum
extent feasible.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/12/13)
Franchise Tax Board (source)
ARGUMENTS IN SUPPORT : The FTB states that, "The reason for
this bill is to improve the timeliness of communication with a
taxpayer by allowing the use of FIRM address information as a
taxpayer's most current address."
ASSEMBLY FLOOR : 52-24, 5/28/13
AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
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Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray,
Hall, Roger Hern�ndez, Jones-Sawyer, Levine, Lowenthal,
Medina, Mitchell, Mullin, Muratsuchi, Nazarian, Pan, Perea, V.
Manuel P�rez, Quirk, Rendon, Salas, Skinner, Stone, Ting,
Weber, Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Allen, Bigelow, Ch�vez, Conway, Dahle,
Donnelly, Beth Gaines, Grove, Hagman, Harkey, Jones, Linder,
Logue, Maienschein, Mansoor, Melendez, Morrell, Nestande,
Olsen, Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Gorell, Holden, Quirk-Silva, Vacancy
AB:nl 8/13/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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