BILL NUMBER: AB 279 ENROLLED
BILL TEXT
PASSED THE SENATE JULY 9, 2015
PASSED THE ASSEMBLY MAY 14, 2015
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, 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.
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, 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, county, or city and county,
and the Franchise Tax Board.
(b) The information furnished to tax officials of a city, county,
or city and county under this section shall be limited as follows:
(1) The tax officials of a 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, 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, 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,
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, 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, 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, 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,
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, 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, 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, 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, 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,
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, 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, 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, county, or city and county's reimbursement of the
Franchise Tax Board's cost if a 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,
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, county, or
city and county that assesses a city, county, or city and county
business tax or requires a 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, 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, 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, county, or city and county 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, 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, 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, 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, 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, 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.