Source: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1296
Timestamp: 2020-01-18 18:04:58
Document Index: 665292299

Matched Legal Cases: ['art 12', 'art 12', 'ART 12', 'art 603', 'art 59', 'art 3', 'art 3', 'art 52']

Bill Text - AB-1296 Joint Enforcement Strike Force on the Underground Economy: Labor Enforcement Task Force.
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AB-1296 Joint Enforcement Strike Force on the Underground Economy: Labor Enforcement Task Force.(2019-2020)
An act to add Part 12.3 (commencing with Section 15925) to Division 3 of Title 2 of the Government Code, and to amend Sections 329 and 1095 of the Unemployment Insurance Code, relating to the underground economy.
AB 1296, Gonzalez. Joint Enforcement Strike Force on the Underground Economy: Labor Enforcement Task Force.
Existing law, until January 1, 2019, established the Revenue Recovery and Collaborative Enforcement Team as a pilot program consisting of a team of agencies charged with specified duties that included developing a plan to document, review, and evaluate data and complaints, evaluating the benefits of a processing center to receive and analyze data, share complaints, and research leads, and providing agencies with investigative leads to combat criminal tax evasion associated with the underground economy.
Existing law establishes the Joint Enforcement Strike Force on the Underground Economy to combat tax violations and cash-pay employment, and requires the membership of the strike force to be composed of representatives of the Employment Development Department, the Department of Consumer Affairs, the Department of Industrial Relations, and the Department of Insurance. Existing law invites other agencies that are not part of the administration, such as the Franchise Tax Board, the State Board of Equalization, and the Department of Justice, to participate in the strike force.
This bill would expand the required membership of the strike force to include the Department of Justice, the California Department of Tax and Fee Administration, and the Franchise Tax Board. The bill would authorize the strike force to invite other specified agencies to serve in an advisory capacity. The bill would expand the duties of the strike force to include enforcement activities regarding labor, tax, insurance, and licensing law violators operating in the underground economy and authorize the provision of investigative leads to participating agencies. The bill would provide for the exchange of certain information between strike force member agencies, to the extent permitted by state and federal laws and regulations, and for the confidentiality of that information. The bill would also authorize the strike force member agencies to cooperate and share any appropriate information with the Labor Enforcement Task Force, as specified.
The bill would authorize a strike force member agency, for certain cases that involve tax or fee administration associated with underground economic activities, to request specified information from the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board and would require those agencies to provide that information for prescribed enforcement purposes. The bill would provide for the confidentiality of such information.
The bill would require the Department of Justice, at a minimum, to maintain 2 multiagency Tax Recovery in the Underground Economy Criminal Enforcement Program investigative teams, formerly known as the Tax Recovery and Criminal Enforcement Task Force, in Sacramento and Los Angeles. The bill would require the investigative teams to continue their collaboration for the recovery of lost revenues to the state by investigating and prosecuting criminal offenses in the state’s underground economy.
Under existing law, the information obtained in the administration of the Unemployment Insurance Code is for the exclusive use and information of the Director of Employment Development in the discharge of their duties and is confidential. However, existing law authorizes the use of the information for specified purposes. Existing law makes it a crime for any person to knowingly access, use, or disclose this confidential information without authorization.
This bill would additionally authorize the use of the information (1) to enable the Joint Enforcement Strike Force on the Underground Economy and the Labor Enforcement Task Force to carry out their duties and (2) to provide information requested by a strike force member agency pursuant to the bill. Because the bill would expand the group of persons who can be convicted for knowingly accessing, using, or disclosing this information without authorization, it would expand the scope of an existing crime and therefore impose a state-mandated local program.
This bill would incorporate additional changes to Section 1095 of the Unemployment Insurance Code proposed by AB 593 and AB 1340 to be operative only if this bill and either or both of those bills are enacted and this bill is enacted last.
Part 12.3 (commencing with Section 15925) is added to Division 3 of Title 2 of the Government Code, to read:
PART 12.3. Underground Economic Activities
(a) For a case, including, but not limited to, a Joint Enforcement Strike Force on the Underground Economy case, that involves tax or fee administration associated with underground economic activities, including known or suspected felony violations involving tax-related or fee-related crimes, an agency listed in subdivision (a) of Section 329 of the Unemployment Insurance Code may request information pursuant to subdivision (b) from the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board.
(b) Upon request of an agency listed in subdivision (a) of Section 329 of the Unemployment Insurance Code, the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board shall fully and timely provide the requesting agency with intelligence, data, including confidential tax and fee information, documents, information, complaints, reports, analysis, findings, or lead referrals for the following purposes:
(1) To assess leads or referrals in order to determine if an investigation is warranted.
(2) To conduct investigations.
(3) To determine restitution owed to the state.
(4) To prosecute violations.
(5) To conduct data analytics associated with assessing a lead or referral or conducting an investigation pursuant to the Joint Enforcement Strike Force on the Underground Economy.
(c) (1) Any person from an agency listed in subdivision (a) of Section 329 of the Unemployment Insurance Code who received confidential information obtained pursuant to this section shall not divulge, or make known in any manner not provided by law, any of the confidential information received by or reported to the agency. Confidential information authorized to be provided pursuant to this section shall retain its confidential status and shall otherwise remain subject to the confidentiality provisions contained in, but not limited to, all of the following provisions:
(A) Section 11183 as that section pertains to the Department of Justice.
(B) Sections 1094, 1095, and 2111 of the Unemployment Insurance Code as those sections pertain to the Employment Development Department. Part 603 of Title 20 of the Code of Federal Regulations as those provisions pertain to the disclosure of confidential unemployment compensation information.
(C) Sections 19542, 19542.1, and 19542.3 of the Revenue and Taxation Code as those sections pertain to the Franchise Tax Board.
(D) Section 15619 of this code, Section 42464.8 of the Public Resources Code, and Sections 7056, 7056.5, 8255, 9255, 9255.1, 30455, 32455, 32457, 38705, 38706, 43651, 45981, 45982, 45983, 45984, 46751, 50159, 50160, 50161, 55381, 60608, and 60609 of the Revenue and Taxation Code, as those sections pertain to the California Department of Tax and Fee Administration.
(E) Any other information confidentiality provisions in federal and state law.
(2) Except for restrictions imposed by federal law, nothing in this subdivision shall be construed to prohibit the sharing of confidential information authorized pursuant to subdivision (b).
(d) Information requested pursuant to this section shall not include federal tax data without authorization from the Internal Revenue Service.
(a) The Department of Justice, at a minimum, shall maintain the two multiagency Tax Recovery in the Underground Economy Criminal Enforcement Program investigative teams, formerly known as the Tax Recovery and Criminal Enforcement Task Force, in Sacramento and Los Angeles. These investigative teams, including the Department of Justice, the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board shall continue their collaboration for the recovery of lost revenues to the state by investigating and prosecuting criminal offenses in the state’s underground economy, including, but not limited to, tax-related and fee-related crimes such as tax evasion or tax fraud.
(b) For the purpose of this section, “collaboration” means the following:
(1) Each agency works with the investigative teams to assess leads.
(2) When a case may involve the jurisdiction of an agency, the agency assists the investigative team with the investigation and prosecution of the case.
Section 329 of the Unemployment Insurance Code is amended to read:
(a) The director, or the director’s designee, shall serve as Chairperson of the Joint Enforcement Strike Force on the Underground Economy provided for in Executive Order W-66-93. The strike force shall include, but not be limited to, representatives of the Employment Development Department, the Department of Justice, the Department of Consumer Affairs, the Department of Industrial Relations, the California Department of Tax and Fee Administration, the Franchise Tax Board, and the Department of Insurance.
(b) The strike force may invite the following state agencies to serve in an advisory capacity: the California Health and Human Services Agency, the Department of Motor Vehicles, the Department of Alcoholic Beverage Control, and the Department of the California Highway Patrol.
(c) The strike force shall have the following duties:
(1) (A) To facilitate and encourage the development and sharing of information by the participating agencies necessary to combat the underground economy including the enforcement activities regarding labor, tax, insurance, and licensing law violators operating in the underground economy. Duly authorized representatives of the strike force employed by an agency listed in subdivision (a) shall exchange intelligence, data, documents, confidential information, or lead referrals pursuant to this section, to the extent permitted by state and federal laws and regulations.
(B) Any person who is involved or has been involved in the strike force pursuant to this section and at any time has obtained confidential information shall not divulge, or make known in any manner not allowed by law, any of the confidential information received by or reported to members of the strike force. Confidential information authorized to be exchanged pursuant to this section shall retain its confidential status and shall otherwise remain subject to the confidentiality provisions contained in applicable federal and state laws.
(C) Participating agencies may also cooperate and share any appropriate information with the Labor Enforcement Task Force established pursuant to Assembly Bill 1464 of the 2011–12 Regular Session (Chapter 21 of the Statutes of 2012), to the extent related to the underground economy including the enforcement activities regarding labor, tax, insurance, and licensing law violators operating in the underground economy permitted by state and federal laws and regulations. Members of the Labor Enforcement Task Force who have obtained confidential information pursuant to this section shall not divulge, or make known in any manner not allowed by law, any of the confidential information received from the strike force.
(2) To improve the coordination of activities among the participating agencies.
(3) To develop methods to pool, focus, and target the enforcement resources of the participating agencies in order to deter tax evasion and maximize recoveries from blatant tax evaders and violators of cash-pay reporting laws.
(4) To reduce enforcement costs wherever possible by eliminating duplicative audits and investigations.
(d) In addition, the strike force shall be empowered to:
(1) Form joint enforcement teams when appropriate to utilize the collective investigative and enforcement capabilities of the participating members.
(2) Establish committees and rules of procedure to carry out the activities of the strike force.
(3) To solicit the cooperation and participation of district attorneys and other state and local agencies in carrying out the objectives of the strike force.
(4) Establish procedures for soliciting referrals from the public, including, but not limited to, an advertised telephone hotline.
(5) Develop procedures for improved information sharing among the participating agencies and the Labor Enforcement Task Force, such as shared automated information database systems, the use of a common business identification number, and a centralized debt collection system, to the extent permitted by state and federal laws and regulations.
(6) Develop procedures to permit the participating agencies to use civil sanctions.
(7) Provide participating agencies, including the Department of Justice, with investigative leads where collaboration opportunities exist for felony-level criminal investigations, including, but not limited to, referring leads to agencies with appropriate enforcement jurisdiction, and to pursue criminal prosecution when unscrupulous businesses violate the state’s labor, employment, licensing, insurance, and tax laws with respect to the underground economy.
(8) Evaluate, based on its activities, the need for any statutory change to do any of the following:
(B) Improve the ability of the participating agencies to audit, investigate, and prosecute tax and cash-pay violations.
(E) Establish shareable information databases.
(F) Establish a common business identification number for use by participating agencies.
(G) Establish centralized, automated debt collection services for the participating agencies.
(e) The strike force shall report to the Governor and the Legislature annually during the period of its existence, by June 30, of each year, regarding its activities.
The report shall include, but not be limited to, all of the following:
(1) The number of cases of blatant violations and noncompliance with tax and cash-pay laws identified, audited, investigated, or prosecuted through civil action or referred for criminal prosecution.
(2) Actions taken by the strike force to publicize its activities.
(3) Efforts made by the strike force to establish an advertised telephone hotline for receiving referrals from the public.
(4) Procedures for improving information sharing among the agencies represented on the strike force.
(5) Steps taken by the strike force to improve cooperation among participating agencies, reduce duplication of effort, and improve voluntary compliance.
(6) Recommendations for any statutory changes needed to accomplish the goals described in paragraph (8) of subdivision (c).
The director shall permit the use of any information in their possession to the extent necessary for any of the following purposes and may require reimbursement for all direct costs incurred in providing any and all information specified in this section, except information specified in subdivisions (a) to (e), inclusive:
(a) To enable the director or their representative to carry out their responsibilities under this code.
(c) To acquaint a worker or their authorized agent with their existing or prospective right to benefits.
(d) To furnish an employer or their authorized agent with information to enable them to fully discharge their obligations or safeguard their rights under this division or Division 3 (commencing with Section 9000).
(i) To provide any law enforcement agency with the name, address, telephone number, birth date, social security number, physical description, and names and addresses of present and past employers, of any victim, suspect, missing person, potential witness, or person for whom a felony arrest warrant has been issued, when a request for this information is made by any investigator or peace officer as defined by Sections 830.1 and 830.2 of the Penal Code, or by any federal law enforcement officer to whom the Attorney General has delegated authority to enforce federal search warrants, as defined under Sections 60.2 and 60.3 of Title 28 of the Code of Federal Regulations, as amended, and when the requesting officer has been designated by the head of the law enforcement agency and requests this information in the course of and as a part of an investigation into the commission of a crime when there is a reasonable suspicion that the crime is a felony and that the information would lead to relevant evidence. The information provided pursuant to this subdivision shall be provided to the extent permitted by federal law and regulations, and to the extent the information is available and accessible within the constraints and configurations of existing department records. Any person who receives any information under this subdivision shall make a written report of the information to the law enforcement agency that employs them, for filing under the normal procedures of that agency.
(o) To provide an authorized governmental agency with any and all relevant information that relates to any specific workers’ compensation insurance fraud investigation. The information shall be provided to the extent permitted by federal law and regulations. For the purposes of this subdivision, “authorized governmental agency” means the district attorney of any county, the office of the Attorney General, the Contractors’ State License Board, the Department of Industrial Relations, and the Department of Insurance. An authorized governmental agency may disclose this information to the State Bar of California, the Medical Board of California, or any other licensing board or department whose licensee is the subject of a workers’ compensation insurance fraud investigation. This subdivision shall not prevent any authorized governmental agency from reporting to any board or department the suspected misconduct of any licensee of that body.
(p) To enable the Director of Consumer Affairs, or the director’s representatives, to access unemployment insurance quarterly wage data on a case-by-case basis to verify information on school administrators, school staff, and students provided by those schools who are being investigated for possible violations of Chapter 8 (commencing with Section 94800) of Part 59 of Division 10 of Title 3 of the Education Code.
(A) Verifying or determining the eligibility of an applicant for, or a recipient of, state health subsidy programs, limited to the Medi-Cal program, provided pursuant to Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code, and the Medi-Cal Access Program, provided pursuant to Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code, when the verification or determination is directly connected with, and limited to, the administration of the state health subsidy programs referenced in this subparagraph.
(aj) To enable the California Workforce Development Board, the Chancellor of the California Community Colleges, the Superintendent of Public Instruction, the Department of Rehabilitation, the State Department of Social Services, the Bureau for Private Postsecondary Education, the Department of Industrial Relations, the Division of Apprenticeship Standards, the Department of Corrections and Rehabilitation, the Prison Industry Authority, and the Employment Training Panel to access any relevant quarterly wage data necessary for the evaluation and reporting of their respective program performance outcomes as required and permitted by various state and federal laws pertaining to performance measurement and program evaluation under the federal Workforce Innovation and Opportunity Act (Public Law 113-128); the workforce metrics dashboard pursuant to paragraph (1) of subdivision (i) of Section 14013; the Adult Education Block Grant Program consortia performance metrics pursuant to Section 84920 of the Education Code; the economic and workforce development program performance measures pursuant to Section 88650 of the Education Code; and the California Community Colleges Economic and Workforce Development Program performance measures established in Part 52.5 (commencing with Section 88600) of Division 7 of Title 3 of the Education Code.
(al) To provide the California Secure Choice Retirement Savings Investment Board with employer tax information for use in the administration of, and to facilitate compliance with, the California Secure Choice Retirement Savings Trust Act (Title 21 of the Government Code). The information should be limited to the tax information the director deems appropriate and shall be provided to the extent permitted by federal laws and regulations.
(am) (1) To enable the Joint Enforcement Strike Force as established by Section 329, and the Labor Enforcement Task Force, as established pursuant to Assembly Bill 1464 (Chapter 21 of the Statutes of 2012), to carry out their duties.
(c) To acquaint a worker or the worker’s authorized agent with their existing or prospective right to benefits.
(al) To provide the California Secure Choice Retirement Savings Investment Board with employer tax information for use in the administration of, and to facilitate compliance with, the California Secure Choice Retirement Savings Trust Act (Title 21 of the Government Code). The information should be limited to the tax information the director deems appropriate, and shall be provided to the extent permitted by federal laws and regulations.
(a) Section 3.3 of this bill incorporates amendments to Section 1095 of the Unemployment Insurance Code proposed by both this bill and Assembly Bill 593. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2020, (2) each bill amends Section 1095 of the Unemployment Insurance Code, (3) Assembly Bill 1340 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Assembly Bill 593, in which case Sections 3, 3.5, and 3.7 of this bill shall not become operative.
(b) Section 3.5 of this bill incorporates amendments to Section 1095 of the Unemployment Insurance Code proposed by both this bill and Assembly Bill 1340. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2020, (2) each bill amends Section 1095 of the Unemployment Insurance Code, (3) Assembly Bill 593 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Assembly Bill 1340, in which case Sections 3, 3.3, and 3.7 of this bill shall not become operative.
(c) Section 3.7 of this bill incorporates amendments to Section 1095 of the Unemployment Insurance Code proposed by this bill, Assembly Bill 593, and Assembly Bill 1340. That section of this bill shall only become operative if (1) all three bills are enacted and become effective on or before January 1, 2020, (2) all three bills amend Section 1095 of the Unemployment Insurance Code, and (3) this bill is enacted after Assembly Bill 593 and Assembly Bill 1340, in which case Sections 3, 3.3, and 3.5 of this bill shall not become operative.