BILL ANALYSIS Ó
AB 279
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
279 (Dodd) - As Introduced February 11, 2015
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|Policy |Revenue and Taxation |Vote:|6 - 3 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill expands the existing data sharing program between the
Franchise Tax Board (FTB) and cities to include counties,
authorizing FTB and county tax officials to enter into
reciprocal agreements to share tax information, subject to
specific limitations on the type, manner, and use in order to
safeguard taxpayer information.
FISCAL EFFECT:
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1)Minor and absorbable administrative costs to FTB.
2)Estimated GF revenue gains of $80,000, $500,000, and $800,000
in FY 2015-16, FY 2016-17, and FY 2017-18, respectively, as a
result of more effective filing notice and enforcement.
COMMENTS:
1)Purpose. According to the author, allowing information
sharing agreements between FTB and counties will allow the FTB
and counties to more effectively collect back taxes.
Supporters, including the California Association of County
Treasurers and Tax Collectors, argue the strong financial ties
between the counties and the state merit closer coordination
and sharing of information to ensure timely, efficient, and
accurate tax collection.
2)Tax Sharing With Cities. Existing law permits FTB and cities
to enter into tax information sharing agreements. FTB
compiles information from many different sources, such as
employers, financial institutions, and federal and other state
agencies for purposes of ensuring compliance. When FTB
receives information indicating a tax return should be filed,
FTB is able to follow up with that taxpayer. Information
sharing agreements allow FTB to use data from cities for this
purpose as well as share taxpayer data with cities to ensure
local business taxes are being paid.
The information sharing agreements generally come in three
varieties: (i) those in which FTB provides data to cities in
exchange for reimbursement of any FTB costs; (ii) those in
which both FTB and the cities provide data to one another at
no cost to either; and (iii) those in which FTB receives data
only from cities and reimburses the city up to $1 per usable
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record. Information shared is typically limited to taxpayer
names, addresses, social security or taxpayer identification
numbers, and principal business activities, and can only be
shared for taxpayers located within the city's jurisdiction.
3)Data Security. FTB is required to maintain the integrity of
taxpayer information, and the Legislature modified the program
in 2013 to create additional safeguards to protect taxpayer
information from unauthorized disclosure. These additional
safeguards must be included in every tax sharing agreement,
requiring cities to limit access to the data to only those
city employees subject to confidentiality agreements and
specialized training, and destroy the data received after
three years, among others.
Though data security agreements would be required as part of
any data sharing with counties, expanding the number of
entities and persons eligible to receive confidential taxpayer
information may increase the chance of a data breach. The
current safeguards impose penalties on cities and agents
responsible for any mishandling or breach of confidential
taxpayer data, however these penalties provide little to
individual taxpayers, who must invest time and money to
resolve any harms caused to them by a breach.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081
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