Senate Resolution No. 18

Introduced by Senator Pan

March 11, 2015

Senate Resolution No. 18—Relative to the Tax Recovery and Criminal Enforcement Task Force.

WHEREAS, California’s ranking as the eighth largest economy
in the world makes it a prime target for individuals and businesses
that conceal their illicit activities, evade their tax liabilities, and
gain an unfair advantage over law-abiding businesses by operating
in the “underground economy.” Also known as the “informal
economy,” “shadow economy,” or “cash economy,” California’s
underground economy is estimated to be as high as $140 billion
annually; and

WHEREAS, California’s underground economy steals revenues
from the state’s coffers that provide public services and fund
infrastructure. California’s citizens are further victimized by the
underground economy through false representations and inferior
or tainted products, layoffs, lost job opportunities, and diminished
employer market share; and

WHEREAS, California’s tax agencies identified the need to
improve communications and collaboration among enforcement
agencies to more effectively combat the serious issue of the
growing underground economy in California. Using existing
resources, the Department of Justice, the Board of Equalization,
the Franchise Tax Board, the Department of Alcoholic Beverage
Control, and the Employment Development Department entered
into an agreement that resulted in the creation of the Tax Recovery
and Criminal Enforcement (TRaCE) Task Force; and

WHEREAS, As criminal investigations of underground
economic activities often cross state borders, national borders, or
both, the Federal Bureau of Investigation and Homeland Security
Investigations joined the Task Force to facilitate criminal
prosecutions, creating a unique federal and state collaboration that
leverages federal enforcement; and

WHEREAS, The TRaCE Task Force has developed and
implemented an innovative central intake system for the public to
report crimes related to criminal tax evasion, human trafficking,
counterfeiting and piracy, and other crimes to collaboratively
combat illegal business activities that rob California of public
funds and its citizens of public services. The central intake system
allows TRaCE to electronically triage a multiagency criminal lead
to collaborate investigative resources in an efficient, expeditious
manner; and

WHEREAS, The TRaCE Task Force encourages and facilitates
collaboration among state and federal agencies, labor organization,
local governments, and business groups to promote a unified front
in reducing the underground economy; provides for a quicker
response to organized efforts to defraud the state, consumers, and
businesses; reduces its prosecutorial costs by prosecuting
cross-program violations as one case to fully capture the severity
of the crimes and impose stiffer penalties on convicted violators;
and helps to improve the health of California’s economy by
combating organized criminal activity while increasing California’s
tax revenue stream; now, therefore, be it

Resolved by the Senate of the State of California, That the Tax
Recovery and Criminal Enforcement (TRaCE) Task Force is
recognized for its excellent public service in combating the
underground economy in California; and be it further

Resolved, That the Secretary of the Senate transmit copies of
this resolution to the author for appropriate distribution.