HomeMy WebLinkAbout05/18/2004, C6 - LOCAL GOVERNMENT SHARING PROGRAM council Ma�
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CITY OF SAN LUIS OBISPO
FROM: Bill Statler, Director of Finance & Information Technology
Prepared By: Jodi Polk, Customer Services Supervisor
SUBJECT: LOCAL GOVERNMENT SHARING PROGRAM
CAO RECOMMENDATION
Adopt a resolution authorizing the Director of Finance & Information Technology to sign the
annual Local Government Sharing Program agreement with the State of California Franchise Tax
Board.
DISCUSSION
Assembly Bill 63 has given the State Franchise Tax Board the authority to enter into agreements
with cities in order to provide them with confidential income tax data for business tax purposes.
This information will enable cities to identify businesses operating within their jurisdiction and
filing state tax returns, but who have failed to pay appropriate business taxes to the city. If an
agreement is entered into with a city, the Franchise Tax Board will be able to provide the
taxpayer name and address, taxpayer identification number and the principal business activity
code.
Although voluntary business tax compliance is always encouraged in the City of San Luis Obispo
through informative letters and public education, not all businesses understand or are willing to
abide by the City's Municipal Code. Currently, the City's enforcement efforts are limited to
public inquiry, and the review of newspaper advertisements and fictitious business name
publications. The Local Government Sharing Program would provide the City with valuable
business information, which could be cross referenced with our business tax data base. If
discrepancies were found, notifications could be sent to local businesses without business tax
certificates to allow them to correct their oversight.
Staff also recognizes the confidential nature of this information and will take all necessary
precautions to ensure that the information will be used for no other purpose, but to support the
Business Tax program.
FISCAL IMPACT
The recommended action will cost the City $1,242 for the first year's agreement and it is
estimated to be similar in subsequent years. This amount is based on what it costs the State
Franchise Tax Board to collect and distribute the business information and is divided among the
participating cities based on the city's population size. This will be funded using existing budget
in the Contract Services line item of the Revenue Management program.
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Local Government Sharing Program Page 2
To partially offset this cost, additional business tax revenue may be received from all organizations
identified through this program as not having paid the required local taxes. Although the amount of
revenue collected based on the new information is unknown, it is anticipated to at least cover the
cost of the program. Should the revenue received not meet this criterion, staff would reevaluate the
City's participation in the program.
Revenue, however, is not the only justification for participation in this program. Staff would also
like to ensure equity in that all qualifying businesses pay the required business taxes.
ALTERNATIVES
Council may choose not to authorize the Director of Finance & Information Technology to sign
the Local Government Sharing agreement. This would save the City approximately $1,242
annually, but would also limit its ability to potentially receive additional business tax revenue.
This alternative is not recommended.
ATTACHMENTS
Attachment 1 —Copy of the Local Government Sharing Agreement
Attachment 2—Resolution
G: Finance/Business Tax/Enforcement/Local Government Sharing Program/Council Agenda Rpt
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STATE OF CALIFORNIA w I
STANDARD AGREEMENT Attachment®
STD 213(Rev 06/03)
COPY
AGREEMENT NUMBER
C2323159.
REGISTRATION NUMBER
1. This Agreement is entered into between the State Agency and the Contractor named below:
STATE AGENCYS NAME
Franchise Tax Board
CONTRACTOR'S NAME
City of San Luis Obispo
2. The term of this
Agreement is: January 1, 2004 through January 31, 2005
3. The maximum amount $ 1,242.00
of this Agreement is: One Thousand Two Hundred Forty-Two and No/100 dollars
4. The parties agree to comply with the terms and conditions of the following exhibits, which are by this reference made
a part of the Agreement.
Exhibit A—Scope of Work 1 page
Exhibit B—Budget Detail and Payment Provisions 1 page
Exhibit C'—General Terms and Conditions GTC304
Exhibit D -Special Terms and Conditions 3 pages
Exhibit.E—Confidentiality Statement 1 page
Items shown with an Asterisk('),are hereby incorporated by reference and made part of this agreement as if attached hereto.
These documents can be viewed at www.dos.ca.gov/contracts
IN WITNESS WHEREOF,this Agreement has been executed by the parties hereto.
CONTRACTOR California Department of General
Services Use Only
CONTRACTOR'S NAME(d other than an individual,state whether a corporation,partnership,etc.)
City of San Luis Obispo
BY(Authorized Signature) DATE SIGNED(Do not type)
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PRINTED NAME AND TITLE OF PERSON SIGNING
ADDRESS
STATE OF CALIFORNIA
AGENCY NAME
Franchise Tax Board
BY(Authorized Signature) DATE SIGNED(Do not type)
PRINTED NAME AND TITLE OF PERSON SIGNING ® Exempt per. SCM 404.13.5.b.
Titus S. Toyama, Chief Financial Officer
ADDRESS
P.O. Box 2086, Rancho Cordova, CA 95741-2086
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City of San Luis Obispo Agreement#C2323159
EXHIBIT A
SCOPE OF WORK
This Agreement is entered into by and between the Franchise Tax Board, herein referred to as
(FTB) and the City of San Luis Obispo, herein after referred to as the City.
1. FTB will provide to the City the following records obtained from the FTB Taxpayer
Information System (TI) and Business Entity Tax System (BETS) files:
a. Taxpayer name
b. Taxpayer Address
c. Taxpayer Social Security Number or Taxpayer Identification Number
d. Principal Business Activity Code
2. The records will be extracted from information in the FTB files obtained from the 2003 tax
year.
3. The records will be identified by zip codes located within the jurisdictional boundaries of the
City. A database of the identified records will be transmitted to the City.
4. Information will be transmitted to the City project coordinator by way of a 3 '/ inch diskette,
or CD-Rom.
5. The records will be transmitted to the City no later than January 31, 2005.
6. The project coordinators during the term of this Agreement will be:
Franchise Tax Board City of San Luis Obispo
Robert Bisho Jodi Polk
Architecture and Data Management Bureau Customer Services Supervisor
P.O. Box 1468, MS-13-40 990 Palm Street
Sacramento, CA 95812-1468 San Luis Obispo, CA 93401
Phone: (916) 845-4762 Phone: 805-781-7129
Fax: (916) 845-0412
Franchise Tax Board
Business Acquisitions Unit
Attention: Roshni Caswell
P.O. Box 2086, MS B-27
Rancho Cordova, CA 95741-2086
Phone: (916) 845-3700
Fax: (916) 845-3599
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City of San Luis Obispo - Agreement#02323159
EXHIBIT B
BUDGET DETAIL AND PAYMENT PROVISION
1. PAYMENT: The City agrees to pay FTB $1,242.00 for 2003 data. Upon the receipt of
executed agreements, the FTB will invoice the City for its share of the cost for 2003 data.
The total cost reimbursable agreement shall not exceed $1,242.00.
2. INVOICING: FTB shall render an invoice in triplicate to:
City of San Luis Obispo
Jodi Polk
Customer Services Supervisor
990 Palm Street
San Luis Obispo, CA 93401
Upon receipt of the agreement executed by the FTB and an accompanying invoice, the City
agrees to remit payment of the amount shown on the invoice, within 10 days.
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City of San Luis ObispoAgreement#C2323159
EXHIBIT D
SPECIAL TERMS AND CONDITIONS
1. STATEMENT OF CONFIDENTIALITY: The Franchise Tax Board has tax returns and their
data in its custody, which is confidential data. Unauthorized inspection or disclosure of
State returns or other confidential data is a misdemeanor (Revenue and Taxation Code
Section 19542 and 19542.1, and Government Code Section 90005).
The City and each of the City's employees who may have access to the confidential data of
the Franchise Tax Board will be required to sign a statement attesting to the fact that
he/she is aware of the confidential data and the penalties for unauthorized disclosure
thereof.
2. USE OF INFORMATION: The City agrees that the information furnished or secured
pursuant to this Agreement shall be used solely for the purposes described by this section.
The information obtained shall be used exclusively to administer the city business tax
program established by the City. The City further agrees that information obtained under
this agreement will not be reproduced, published, sold or released in original or in any other
form for any purpose other than identified in this section.
3. EMPLOYEE ACCESS TO INFORMATION: The City agrees that the information obtained
will be kept in the strictest confidence and shall make information available to its own
employees only on a "need to know" basis. Need to know are those authorized employees
who need information to perform their official duties in connection with the uses of the
information authorized by this agreement. The parties recognize their mutual
responsibilities to protect the confidentiality of the state tax return information as provided
by law and ensures such information is disclosed only to those individuals and of such
purpose, as authorized by the Revenue and Taxation Code.
4. DISCLOSURE OF CONFIDENTIAL INFORMATION:.Any unwarranted disclosure or use of
tax return information or any willful unauthorized inspection of the return information is an
act punishable as a misdemeanor. Inspection is defined to mean any examination of
confidential information. No one other than city business tax license department
employees may have access, use, and view or manipulate the data being transmitted to the
City under this agreement. The city, in recognizing the confidentiality of State Tax Return
information, agrees to take all appropriate precautions to protect from unauthorized
disclosure of the confidential information obtained pursuant to this agreement. The City will
conduct oversight of its users with access to the confidential information provided under
this agreement, and will promptly notify the FTB of any suspected violations of security or
confidentiality by its users by contacting the Franchise Tax Board Contact.Robert Bisho of
the Architecture and Data Management Bureau at (916) 845-4762.
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City of San Luis Obispo - Agreement#C2323159
EXHIBIT D
SPECIAL TERMS AND CONDITIONS (continued)
5. NON-.IRS INFORMATION: This agreement does not.allow for the release of any
confidential tax return information in the FTB files that may have been obtained from
sources other than the taxpayer. No confidential Federal Tax Return information will be
provided to the city. This agreement does not provide for the exchange of confidential
federal tax returns or confidential tax return information obtained from the Internal Revenue
Service by the FTB.
6. INFORMATION SECURITY: Information security is defined as the preservation of the
confidentiality, integrity, availability, authenticity and utility of information. A secure
environment is required to protect the confidential information obtained from the FTB
pursuant to this Agreement. The City will store information so that it is physically secure
from unauthorized access. The records received by the city will be securely maintained and
accessible only by employees of the city business tax department who are committed to
protect the data from unauthorized access, use or disclosure.
7. DESTRUCTION.OF RECORDS: All records received by the agency from FTB and any
database created, copies made, or files attributed to the records received will be destructed
Within one year of receipt. The records shall be destructed in a manner to be deemed
unusable or readable and to the extent that an individual record can no longer be
reasonable ascertained. Upon destruction of the records, the City will notify FTB of the
completed destruction.
8. INDEMNIFICATION: The City agrees to indemnify, defend and save harmless the State,
its officers, agents and employees from any and all claims and losses accruing or resulting
from any breach of confidentiality by the City and or its employees.
9. SETTLEMENT OF DISPUTES: In the event of a dispute, the City shall file a "Notice of
Dispute" with the Assistant Executive Officer, of the Franchise Tax Board within ten (10)
days of discovery of the problem. Within ten (10) days the Assistant Executive Officer, or
his/her designee shall meet with the City and Project Manager for purposes of resolving the
dispute. The decision of the Assistant Executive Officer shall be final.
10. SAFEGUARD AUDITS: The FTB retains the right to conduct on site safeguard review
audits to the receiving city. The receiving city will be provided a minimum of seven (7) days
notice prior to a safeguard review being conducted by the FTB Disclosure Office. The
safeguard review will examine the adequacy of information security controls established by
the City in compliance with the confidentiality requirements pursuant to this Agreement.
The City will take appropriate disciplinary actions against any user determined to have
violated security or confidentiality requirements.
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City of San Luis Obispo Agreement#C2323159
EXHIBIT D
SPECIAL TERMS AND CONDITIONS (continued)
11. LIMITED WARRANTY: The FTB does not warrant or represent the accuracy or content of
the material available though this agreement, and expressly disclaims any express or
implied warranty, including any implied warranty of fitness for a specific purpose.
12. CANCELLATION: The City may terminate this Agreement, in writing to the FTB for any
reason, upon thirty days (30) prior written notice. In the event of a voluntary termination,
the City agrees it will not be entitled to a refund. This Agreement may be terminated by
either party in the event of any breach of the terms of this Agreement.
13. INCIDENT REPORTING: All unauthorized or suspected unauthorized access(es); uses
and/or disclosures (incidents) of FTB data shall be reported to the FTB Contact,
Robert Bisho of the Architecture and Data Management Bureau immediately upon
discovery of the incident. The incident report shall contain the following: date, time,
employee name, description of the incident or circumstances, and means of discovery. -
The City agrees to submit a completed FTB Security and Disclosure Questionnaire for each
confirmed unauthorized access within 10 days of the confirmation of the incident: Upon
discovery of any such incident(s), FTB will make the appropriate notification to affected
California Resident(s) pursuant to the requirements of Civil Code Section 1798.29.
City of San Luis Obispo - Agreement#C2323159
EXHIBIT E
CONFIDENTIALITY STATEMENT
State of California Franchise Tax Board
Confidential tax return information is protected from disclosure by law, regulation, and
policy. Information security is strictly enforced. Violators may be subject to disciplinary,
civil, and/or criminal action. Protecting confidential tax return information is in the
public's interest, the state's interest, and the city's interest.
A city employee is required to protect the following types of information received from
the Franchise Tax Board:
• Taxpayer name
• Taxpayer address
• Taxpayer social security number or taxpayer identification number
• Principal business activity code
A city employee is required to protect confidential information by:
• Accessing or modifying information only for the purpose of performing official duties.
• Never accessing or inspecting information for curiosity or personal reasons.
• Never showing or discussing confidential information to or with anyone who does not
have the need to know.
• Placing confidential information only in approved locations.
• Never removing confidential information from your work site without authorization.
Asa city employee, you are required to know whether information is protected. If you have any
question regarding whether particular information is confidential, check with your department's
project coordinator.
Unauthorized inspection, access, use, or disclosure of confidential tax return information
is a crime under state laws, including but not limited to Sections 19542 and 19552 of the
California Revenue and Taxation Code and Section 502 of the Penal Code. Unauthorized
access, inspection, use, or disclosure may result in either or both of the following:
• State criminal action
• State and/or taxpayer civil action
You are reminded that these rules are designed to protect everyone's right to privacy, including
your own.
I certify that./have read the confidentiality statement printed above. 1 further certify and
understand that unauthorized access, inspection, use, or disclosure of confidential
information may be punishable as a crime and may result in disciplinary and/or civil
action being taken against me.
Name
Signature Date
_ I Aftac .menL?.
RESOLUTION NO. (2004 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZING THE DIRECTOR OF FINANCE & INFORMATION TECHNOLOGY TO
SIGN THE LOCAL GOVERNMENT SHARING PROGRAM AGREEMENT WITH THE
STATE OF CALIFORNIA FRANCHISE TAX BOARD
WHEREAS, the City of San Luis Obispo (City) has identified the need to acquire additional
information for business tax enforcement; and
WHEREAS, the State of California Franchise Tax Board has been given the authority to
enter into information sharing agreements with cities.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
that the Director of Finance & Information Technology be authorized to annually enter into the Local
Government Sharing Program agreement with the State of California Franchise Tax Board:
Upon motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 18th day of May 2004.
David F. Romero, Mayor
ATTEST:
City Clerk
APPROVED AS TO FORM:
Jona well
City Attorney
R I1y