BILL NUMBER: AB 279	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Dodd

                        FEBRUARY 11, 2015

   An act to amend Sections 19551.1 and 19551.5 of the Revenue and
Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 279, as introduced, Dodd. Tax administration: disclosure of
information: Franchise Tax Board and cities and counties.
   Existing law authorizes, until January 1, 2019, a city that has
entered into a reciprocal agreement, as defined, with the Franchise
Tax Board, to exchange tax information, as provided. Existing law
requires, until January 1, 2019, upon the request of the Franchise
Tax Board, each city that assesses a city business tax or requires a
city business license to annually submit to the board specified
information relating to the administration of the city's business tax
program. Existing law defines the term "city" to include, among
others, a city and county. Existing law limits the collection and use
of this information and provides that any unauthorized use of this
information is punishable as a misdemeanor.
   This bill would expand these provisions to additionally apply to a
county. By expanding the scope of a crime, this bill would impose a
state-mandated local program.
   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: yes.


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

  SECTION 1.  Section 19551.1 of the Revenue and Taxation Code is
amended to read:
   19551.1.  (a) (1) The Franchise Tax Board may permit the tax
officials of any  city   city, county, or city
and county  to enter into a reciprocal agreement with the
Franchise Tax Board to obtain tax information from the Franchise Tax
Board, as specified in subdivision (b).
   (2) For purposes of this section, "reciprocal agreement" means a
formal agreement to exchange information for tax administration
purposes between tax officials of a  city  
city, county, or city and county,  and the Franchise Tax Board.
   (b) The information furnished to tax officials of a  city
  city, county, or city and county  under this
section shall be limited as follows:
   (1) The tax officials of a  city   city,
county, or city and county  are authorized to receive
information only with respect to taxpayers with an address as
reflected on the Franchise Tax Board's records within the
jurisdictional boundaries of the  city  city,
county, or city and county  who report income from a trade or
business to the Franchise Tax Board.
   (2) The tax information that may be provided by the Franchise Tax
Board to a  city   city, county, or city and
county  is limited to a taxpayer's name, address, social
security or taxpayer identification number, and business activity
code.
   (3) Tax information provided to the taxing authority of a 
city may   city, county, or city and county shall 
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 Franchise Tax
Board, including, but not limited to:
   (A) The completion of a data exchange security questionnaire
provided by the Franchise Tax Board prior to approval of a data
exchange by the Franchise Tax Board.
   (B) The tax official of a  city   city,
county, or city and county  shall allow for an onsite safeguard
review conducted by the Franchise Tax Board.
   (C) The completion of disclosure training provided by the
Franchise Tax Board and a confidentiality statement signed by all
employees with access to information provided by the Franchise Tax
Board 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 of
this code and Section 502 of the Penal Code.
   (D) The tax official of a  city   city,
county, or city and county  shall notify the Franchise Tax Board
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
  city, county, or city and county  shall be
destroyed in a manner to make them unusable or unreadable so an
individual record may no longer be ascertained in a timeframe
specified by the Franchise Tax Board.
   (4) The information provided to the tax officials of the 
city   city, county, or city and county  by the
Franchise Tax Board under this section is subject to Section 19542,
and may not be used for any purpose other than the  city's
  city, county, or city and county's  tax
enforcement, or as otherwise authorized by state or federal law.
   (5) Section 19542.1 applies to this section.
   (c) The Franchise Tax Board may not provide any information
pursuant to this section until all of the following have occurred:
   (1) An agreement has been executed between a  city
  city, county, or city and county  and the
Franchise Tax Board, that provides that an amount equal to all first
year costs necessary to furnish the  city  
city, county, or city and county  information pursuant to this
section shall be received by the Franchise Tax Board before the
Franchise Tax Board incurs any costs associated with the activity
permitted by this section. For purposes of this section, first year
costs include costs associated with, but not limited to, the
purchasing of equipment, the development of processes, and labor.
   (2) An agreement has been executed between a  city
  city, county, or city and county  and the
Franchise Tax Board, that provides that the annual costs incurred by
the Franchise Tax Board, as a result of the activity permitted by
this section, shall be reimbursed by the city  
city, county, or city and county  to the Franchise Tax Board.
   (3) Pursuant to the agreement described in paragraph (1), the
Franchise Tax Board has received an amount equal to the first year
costs.
   (d) Any information, other than the type of tax information
specified in subdivision (b), may be requested by the tax officials
of a  city   city, county, or city and county
 from the Franchise Tax Board by affidavit. At the time a tax
official makes the request, he or she shall provide the person whose
information is the subject of the request, with a copy of the
affidavit and, upon request, make the information obtained available
to that person.
   (e) This section does not invalidate any other law. This section
does not preclude any  city or county   city,
county, or city and county  from obtaining information about
individual taxpayers, including those taxpayers not subject to this
section, by any other means permitted by state or federal law.
   (f) Nothing in this section shall be construed to affect any
obligations, rights, or remedies regarding personal information
provided under state or federal law.
   (g) Notwithstanding subdivision (c), the Franchise Tax Board shall
waive a  city's   city, county, or city and
county's  reimbursement of the Franchise Tax Board's cost if a
 city   city, county, or city and county 
enters into a reciprocal agreement as defined in paragraph (2) of
subdivision (a). The reciprocal agreement shall specify that each
party shall bear its own costs to furnish the data involved in the
exchange authorized by this section and Section 19551.5, and a
 city   city, county, or city and county 
shall be precluded from obtaining reimbursement as specified under
Section 5 of the act adding this subdivision.
   (h) This section shall remain in effect only until January 1,
2019, and as of that date, is repealed.
  SEC. 2.  Section 19551.5 of the Revenue and Taxation Code is
amended to read:
   19551.5.  (a) Notwithstanding any other law, each  city
  city, county, or city and county  that assesses a
 city   city, county, or city and county 
business tax or requires a  city   city, county,
or city and county  business license shall, upon the request of
the Franchise Tax Board, annually submit to the Franchise Tax Board
the information that is collected in the course of administration of
the  city's   city, county, or city and county's
 business tax  or business license  program, as
described in subdivision (b).
   (b) Information, collected in the course of administration of the
 city's   city, county, or city and county's
 business tax  or business license  program, shall be
limited to the following:
   (1) Name of the business, if the business is a corporation,
partnership, or limited liability company, or the owner's name if the
business is a sole proprietorship.
   (2) Business mailing address.
   (3) Federal employer identification number, if applicable, or the
business owner's social security number  , if known  .
   (4) Standard Industrial Classification (SIC) Code or North
American Industry Classification System (NAICS) Code.
   (5) Business start date.
   (6) Business cease date.
   (7) City  , county, or city and county account or license
 number.
   (8) Ownership type.
   (c) The reports required under this section shall be filed on
magnetic media such as tapes or compact discs, through a secure
electronic process, or in other machine-readable form, according to
standards prescribed by regulations promulgated by the Franchise Tax
Board.
   (d) Cities that receive a request from the Franchise Tax Board
shall begin providing to the Franchise Tax Board the information
required by this section as soon as economically feasible, but no
later than December 31, 2009. The information shall be furnished
annually at a time and in the form that the Franchise Tax Board may
prescribe by regulation.
   (e) The  city   city, county, or city and
count   y  data provided to the Franchise Tax Board
under this section is subject to Section 19542, and may not be used
for any purpose other than state tax enforcement or as otherwise
authorized by law.
   (f) If a  city   city, county, or city and
county  enters into a reciprocal agreement with the Franchise
Tax Board pursuant to subdivision (a) of Section 19551.1, the
 city   city, county, or city and county 
shall also waive reimbursement for costs incurred to provide
information required under this section and shall be precluded from
obtaining reimbursement as specified under Section 5 of Chapter 345
of the Statutes of 2008. The reciprocal agreement shall specify that
each party shall bear its own costs to furnish the data involved in
the exchange authorized by Section 19551.1 and this section, and the
Franchise Tax Board shall be precluded from obtaining reimbursement
as specified under subdivision (c) of Section 19551.1.
   (g) A  city  city, county, or city and county
 shall not be required to provide information to the Franchise
Tax Board pursuant to this section if the Franchise Tax Board fails
to provide tax information to the  city   city,
county, or city and county  pursuant to a reciprocal agreement
entered into pursuant to subdivision (a) of Section 19551.1 for
reasons other than concerns related to confidentiality of tax
information provided to the  city.   city,
county, or city and county. 
   (h) This section shall remain in effect only until January 1,
2019, and as of that date, is repealed.
  SEC. 3.  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.