BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 279|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 279
Author: Dodd (D)
Introduced:2/11/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 6-1, 6/17/15
AYES: Hertzberg, Beall, Hernandez, Lara, Moorlach, Pavley
NOES: Nguyen
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 67-9, 5/14/15 - See last page for vote
SUBJECT: Tax administration: disclosure of information:
Franchise Tax Board and cities and counties
SOURCE: Author
DIGEST: This bill extends the state-local tax information
sharing program (program) to counties, and to a city and county.
ANALYSIS:
Existing law:
1)Prohibits disclosure or inspection of any income tax return
information, and applies criminal sanctions, including
imprisonment, to Franchise Tax Board (FTB) personnel convicted
of unlawful disclosure or inspection of tax records.
2)Allows city tax officials to obtain state income tax
information subject to a written agreement between FTB and the
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taxing authority of a city to assist in enforcing its business
license taxes, but required cities to pay FTB's costs (AB 63,
Cedillo, Chapter 915, Statutes of 2001).
3)Provides that cities could offset the cost by entering into a
reciprocal agreement with FTB to share its business license
tax information. (SB 1146, Cedillo, Chapter 345, Statutes of
2008).
4)Sunsets the program on January 1, 2019 (SB 211, Price, Chapter
513, Statutes of 2013).
5)Limits, under the program, information that FTB can share to a
taxpayer's name, address, social security or taxpayer
identification number, and business activity code.
6)Allows city officials to request additional information by
affidavit, so long as they notify the person whose information
is the subject of the request, and provide them a copy of the
affidavit.
7)Limits the use of tax information provided to the city solely
to city officials, and only for tax collection purposes.
8)Requires, as a condition of participation, city officials to:
a) Complete a data exchange security questionnaire before
the data exchange,
b) Direct tax officials to agree to on-site reviews from
FTB as a condition of participation,
c) Complete FTB disclosure training, and
d) Have all employees who receive the information sign a
confidentiality statement acknowledging their awareness of
data security requirements, and penalties for unlawful
disclosure.
9)Requires city tax officials to notify FTB within 24 hours of
any suspected instance of unlawful inspection or disclosure,
and destroy an individual record in a manner to make them
unreadable and unusable.
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This bill extends the state-local tax information sharing
program to allow a county, and a city and county, to enter into
a reciprocal agreement to share tax information with FTB.
Comments
FTB has maintained the integrity of taxpayer information since
the inception of the tax-sharing information program. Any
improper usage or disclosure of this information carries certain
civil and criminal liabilities. In 2013, the Legislature
modified the program to, among other things, create additional
safeguards to protect taxpayer information from unauthorized
disclosure. Currently, every reciprocal agreement must include
provisions ensuring that taxpayer data is safeguarded. The city
must complete and submit a Safeguard Questionnaire to the FTB to
ensure that the data is used only for the tax administration
within the city, and destroy the data as mandated after three
years. In addition, only city employees named in the
confidentiality statement may have access to the data and each
of those employees must complete an annual City Business Tax
Disclosure training.
FTB states that it currently has a reciprocal agreement with 102
cities in California, which costs $718,000 annually. The
following cities reported the following revenue amounts due to
the program:
City of Los Angeles ($13.9 million)
City of San Diego ($1.1 million)
City of Newport Beach ($360,000)
City of Oakland ($260,000)
City of Menlo Park ($172,000)
City of Concord ($154,000)
City of Sunnyvale ($131,000)
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
SUPPORT: (Verified7/1/15)
California Association of County Treasurer-Tax Collectors
California State Association of Counties
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El Dorado County Board of Supervisors
Humboldt County Board of Supervisors
Mono County Board of Supervisors
Rural County Representatives of California
OPPOSITION: (Verified7/1/15)
None received
ARGUMENTS IN SUPPORT: According to the author, AB 279 is a
modest extension to an existing program. By granting approval
for information sharing agreements between the FTB and counties,
counties will be able to more efficiently collect back taxes.
ASSEMBLY FLOOR: 67-9, 5/14/15
AYES: Achadjian, Alejo, Bigelow, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu,
Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández,
Holden, Irwin, Jones, Jones-Sawyer, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, McCarty, Medina, Melendez,
Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Perea, Quirk,
Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth,
Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins
NOES: Travis Allen, Baker, Brough, Beth Gaines, Grove, Harper,
Kim, Mayes, Wagner
NO VOTE RECORDED: Dahle, Patterson, Waldron, Wilk
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
7/1/15 16:37:20
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