Bill Text: CA SB402 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Recycling: California redemption value.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Vetoed) 2010-01-19 - Stricken from Senate file. [SB402 Detail]

Download: California-2009-SB402-Amended.html

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BILL NUMBER: SB 402	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 16, 2009

INTRODUCED BY   Senator Wolk

                        FEBRUARY 26, 2009

   An act to add Sections 19266 and 19560 to the Revenue and Taxation
Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 402, as amended, Wolk. Franchise Tax Board: collections.
   Existing laws require the Franchise Tax Board to administer
specified taxes and collect those taxes from delinquent tax debtors.
   This bill would require the board, in coordination with financial
institutions doing business in this state, to operate a Financial
Institution Record Match System utilizing automated data exchanges to
the maximum extent feasible in order to allow the board to match its
list of delinquent tax debtors with the lists provided by the
financial institutions. The bill would authorize the board to
institute civil proceedings to enforce specified provisions of the
bill, and would impose specified penalties on financial institutions
for failure to provide records in connection with the match system,
as provided. This bill would provide that the specified use of
certain data is a misdemeanor.
   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 19266 is added to the Revenue and Taxation
Code, to read:
   19266.  (a)  (1)    The Franchise Tax Board, in
coordination with financial institutions doing business in this
state, shall operate a Financial Institution Record Match System
utilizing automated data exchanges to the maximum extent feasible.
 The 
    (2)     The  Franchise Tax Board shall
prescribe any rules and regulations that may be necessary or
appropriate to implement this section. These rules and regulations
shall include  a   all of the following: 
    (A)     A  structure by which
financial institutions, or their designated data-processing agents,
shall receive from the Franchise Tax Board the file or files of
delinquent debtors that the institution shall match with its own list
of accountholders to identify delinquent tax debtor accountholders
at the institution.  The rules and regulations shall include
an 
    (B)     An  option by which financial
institutions without the technical ability to process the data
exchange, or without the ability to employ a third-party data
processor to process the data exchange, may forward to the Franchise
Tax Board a list of all accountholders and their social security
numbers or other taxpayer identification numbers, so that the
Franchise Tax Board shall match that list with the file or files of
delinquent tax debtors. 
   (C) Authority for the Franchise Tax Board to exempt a financial
institution from the requirements of this section if the Franchise
Tax Board determines that the financial institution participation
would not generate sufficient revenue to be cost effective for the
Franchise Tax Board.  
   (D) Authority for the Franchise Tax Board to temporarily suspend
the requirements of this section for a financial institution if the
Franchise Tax Board determines that the financial institution is
undercapitalized (as defined by FDIC Regulation 325.103 (3) subparts
(1) and (2)). 
   (b) The Financial Institution Data Record Match System shall not
be subject to any limitation set forth in Chapter 20 (commencing with
Section 7460) of Division 7 of Title 1 of the Government Code.
However, any use of the information provided pursuant to this section
for any purpose other than the collection of delinquent franchise or
income tax or other debts referred to the Franchise Tax Board for
collection, as imposed under Part 5 (commencing with Section 10878),
Part 10 (commencing with Section 17001), Part 10.2 (commencing with
Section 19280), or Part 11 (commencing with Section 23001) shall be a
violation of Section 19542.
   (c)  (1)    To effectuate the Financial
Institution Record Match System, financial institutions subject to
this section shall provide to the Franchise Tax Board on a quarterly
basis the name, record address, and other addresses, social security
number or other taxpayer identification number, and other identifying
information for each delinquent tax debtor, as identified by the
Franchise Tax Board by name and social security number or other
taxpayer identification number, who maintains an account at the
institution. 
   (2) The first data file created by the Franchise Tax Board for
purposes of matching tax debtor records to financial institution
accountholder records shall be limited to 600,000 tax debtor records.
The number of tax debtor records included in a subsequent data file
created by the Franchise Tax Board may be increased by no more than
600,000 tax debtor records greater than the number of tax debtor
records included in the immediately preceding data file until all
eligible tax debtor records are included in the data match file.

   (d) Unless otherwise required by law, a financial institution
furnishing a report or providing information to the Franchise Tax
Board pursuant to this section shall not disclose to a depositor or
an accountholder, or a codepositor or coaccountholder, that the name,
address, social security number or other taxpayer identification
number, or other identifying information of that delinquent tax
debtor has been received from or furnished to the Franchise Tax
Board.
   (e) A financial institution shall incur no obligation or liability
to any person arising from any of the following:
   (1) Furnishing information to the Franchise Tax Board as required
by this section.
   (2) Failing to disclose to a depositor or accountholder that the
name, address, social security number or other taxpayer
identification number, or other identifying information of that
delinquent tax debtor was included in the data exchange with the
Franchise Tax Board required by this section.
   (3) Any other action taken in good faith to comply with the
requirements of this section.
   (f) The Franchise Tax Board may institute civil proceedings to
enforce this section.
   (g) Any financial institution that willfully fails to comply with
the rules and regulations promulgated by the Franchise Tax Board for
the administration of delinquent tax collections, unless it is shown
to the satisfaction of the Franchise Tax Board that the failure is
due to reasonable cause, shall be assessed a penalty upon notice and
demand of the Franchise Tax Board and collected in the same manner as
tax. The penalty imposed under this section shall be in an amount
equal to fifty dollars ($50) for each record not provided, but the
total imposed on that financial institution for all such failures
during any calendar year shall not exceed one hundred thousand
dollars ($100,000).
   (h) For purposes of this section:
   (1) "Account" means any demand deposit account, share or share
draft account, checking or negotiable withdrawal order account,
savings account, time deposit account, or money market mutual fund
account, regardless of whether the account bears interest.
   (2) "Financial institution" means:
   (A) A depository institution, as defined in Section 1813(c) of
Title 12 of the United States Code.
   (B) An institution-affiliated party, as defined in Section 1813(u)
of Title 12 of the United States Code.
   (C) Any federal credit union or state credit union, as defined in
Section 1752 of Title 12 of the United States Code, including an
institution-affiliated party of a credit union, as defined in Section
1786(r) of Title 12 of the United States Code.
   (D) Any benefit association, insurance company, safe deposit
company, money-market fund, or similar entity authorized to do
business in this state.
   (3) "Delinquent tax debtor" means any person liable for any income
or franchise tax or other debt referred to the Franchise Tax Board
for collection as imposed under Part 5 (commencing with Section
10878), Part 10 (commencing with Section 17001), Part 10.2
(commencing with Section 19280), or Part 11 (commencing with Section
23001), including tax, penalties, interest, and fees, where the tax
or debt, including the amount, if any, referred to the Franchise Tax
Board for collection remains unpaid after 30 days from demand for
payment by the Franchise Tax Board, and the person is not making
current timely installment payments on the liability under an
agreement pursuant to Section 19006. 
   (i) The Franchise Tax Board shall consult with financial
institution representatives to develop a reasonable methodology to
reimburse actual costs incurred by financial institutions to conduct
tax data matches pursuant to this section.  
   (i) A financial institution shall be reimbursed by the Franchise
Tax Board for actual costs incurred to implement the provisions of
this section. Upon receipt of an invoice from the financial
institution, cost reimbursement by the Franchise Tax Board shall be
limited to the following:  
   (1) For one-time startup costs of a financial institution, no more
than two thousand five hundred dollars ($2,500).  
   (2) For data matching costs of a financial institution, other than
one-time startup costs, no more than two hundred fifty dollars
($250) per calendar quarter. 
   (j) Implementation of this section shall be contingent on the
appropriation of funds for the purposes of this  section
  section, and shall be operative 120 days after that
date  .
   (k) This section shall apply with respect to persons that are
delinquent tax debtors on and after the effective date of the act
adding this section.
  SEC. 2.  Section 19560 is added to the Revenue and Taxation Code,
to read:
   19560.  Notwithstanding any law to the contrary, to effectuate the
Financial Institution Record Match System prescribed under Section
19266, the Franchise Tax Board may disclose the name and social
security number or taxpayer identification number to designated
financial institutions or their authorized processing agent for
purposes of matching debtor records to accountholder records at the
financial institution. Any use of the data provided by the Franchise
Tax Board for a purpose other than those identified by Section 19266
is prohibited and considered a violation of Section 19542.
  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.