BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 211|
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THIRD READING
Bill No: SB 211
Author: Price (D)
Amended: 5/8/13
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 5/1/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
SENATE APPROPRIATIONS COMMITTEE : 4-2, 5/20/13
AYES: De Le�n, Hill, Padilla, Steinberg
NOES: Walters, Gaines
NO VOTE RECORDED: Lara
SUBJECT : Tax administration: disclosure of information:
Franchise Tax Board and cities
SOURCE : Author
DIGEST : This bill extends the sunset to January 1, 2019, on
the state-local tax sharing program; allows city agents to
receive confidential state tax information; and adds an
additional limitation on the use of the tax data to be utilized
in a form and manner to safeguard the tax information, as
specified.
ANALYSIS : Existing state and federal laws generally prohibit
unlawful disclosure or inspection of any income tax return
information. Existing state law allows a committee of either
house of the Legislature to examine confidential taxpayer
information. Criminal sanctions, including imprisonment, apply
CONTINUED
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to Franchise Tax Board (FTB) personnel convicted of unlawful
disclosure or inspection of tax records. The FTB must notify a
taxpayer if criminal charges have been filed for willful
unauthorized inspection or disclosure of their tax data.
In 2001, the Legislature reenacted the program, but in the
reverse: it allowed city tax officials to obtain state income
tax information subject to a written agreement between FTB and
the taxing authority of a city (AB 63, Cedillo, Chapter 915,
Statutes of 2001); FTB charged the cities for its costs for
collecting and sending the information. In 2008, the
Legislature extended the program until 2014, but allowed cities
to offset costs paid by providing its business license tax
information to FTB to assist Personal Income and Corporation Tax
collection (SB 1146, Cedillo, Chapter 345, Statutes of 2008).
Under the program, FTB may grant information limited to a
taxpayers' name, address, social security or taxpayer
identification number, and business activity code. Only city
employees may use the tax information provided to the city, and
may only use it for tax collection purposes.
This bill extends the sunset from December 31, 2013 to January
1, 2019, on the state-local tax information sharing program, and
allows agents of the city to receive information.
This bill adds an additional limitation on the use of the tax
data to require the data to be utilized in a form and manner to
safeguard the tax information, as prescribed.
Tax information provided to a city's taxing authority may not be
furnished to, or used by, any person other than an employee of
that taxing authority and shall be utilized in a form and manner
to safeguard the tax information as required by the FTB,
including, but not limited to:
A. The completion of a data exchange security questionnaire
provided by the FTB prior to approval of a data exchange by
the FTB.
B. The tax official or agent of a city shall allow for an
onsite safeguard review conducted by the FTB.
C. The completion of disclosure training provided by the
FTB and a confidentiality statement signed by all employees
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or agents with access to information provided by the FTB
confirming the requirement of data security with respect to
that information and acknowledging awareness of penalties
for unauthorized access or disclosure under Sections 19542
and 19552 and Section 502 of the Penal Code.
D. The tax official or agent of a city shall notify the FTB
within 24 hours upon discovery of any incident of
unauthorized or suspected unauthorized access or disclosure
of the tax information and provide a detailed report of the
incident and the parties involved.
E. All records received by the tax officials of a city or
its agents shall be destroyed in a manner to make them
unusable or unreadable so an individual record may no
longer be ascertained in a time frame specified by the FTB.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, the FTB
indicates that this measure would result in revenue gains of
$1.5 million in 2014-15 and $4.9 million in 2015-16. FTB's
indicates that it currently has reciprocal agreements with 102
cities, and that its administrative costs to administer the
program are about $718,000 annually.
SUPPORT : (Verified 5/23/13)
California Municipal Revenue and Tax Association
City of Big Bear Lake
City of El Segundo
City of Oakland
City of Sunnyvale
OPPOSITION : (Verified 5/23/13)
California Taxpayers Association
AB:ej 5/23/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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