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HomeMy WebLinkAboutRES 19-7173 (FINANCE DIRECTOR-FRANCHISE TAX BOARD)1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ?R RESOLUTION NO. 19-7173 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DESIGNATING THE FINANCE DIRECTOR AS THE AUTHORIZED AGENT FOR THE PURPOSES OF A NON -FINANCIAL CONTRACT WITH THE STATE OF CALIFORNIA FRANCHISE TAX BOARD FOR EXCHANGE OF INFORMATION The City Council of the City of Hermosa Beach, California, does hereby resolve as follows: SECTION 1. Recitals. A. The City Council of the City of Hermosa Beach is eligible to participate in a non -financial contract with the State of California Franchise Tax Board for data exchange purposes. B. The State Franchise Tax Board agrees to share information obtained through the Taxpayer Information and Business Entities Tax System for taxpayers within the city's jurisdiction. C. The City of Hermosa Beach agrees to share information obtained through business licensing within the City's jurisdiction. D. The City of Hermosa Beach designates the Finance Director as the authorized agent to execute Franchise Tax Board Reciprocal Agreement #37223 for and on the behalf of the City of Hermosa Beach. SECTION 2.This Resolution shall take effect immediately. The City Clerk shall certify the passage and adoption of the this Resolution, shall cause the original of the same to be entered among the original resolutions of the City Council and shall make a minute of the passage and adoption thereof in the minutes of the City Council meeting at which the same is passed and adopted. Page 1 of 2 19-7173 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 IR PASSED, APPROVED and ADOPTED this 23rd day of April, 2019. PRESIDENT of the City Coifncil and ATTEST: i�Cie (seal) of the City of Hermosa Beach, California APPROVED AS TO FORM: y City Attorney Page 2 of 2 19-7173 STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF HERMOSA BEACH I, Elaine Doerfling, City Clerk of the City of Hermosa Beach, California, do hereby certify that the foregoing Resolution No. 19-7173 was duly and regularly passed, approved and adopted by the City Council of the City of Hermosa Beach at a Regular Meeting of said Council at the regular place thereof on April 23, 2019 by the following vote: AYES: Campbell, Duclos, Fangary, Massey, Mayor Armato NOES: None ABSENT: None ABSTAIN: None Dated: April 23, 2019 sine Doe ing, City lerk STATE OF CALIFORNIA - DEPARTMENT OF GENERAL SERVICES STANDARD AGREEMENT AGREEMENT NUMBER PURCHASING AUTHORITY NUMBER (If Applicable) STD 213 (Rev. 03/2019) 100000000000000000000372231 1. This Agreement is ente'red into between the Contracting Agency and the Contractor named below: CONTRACTING AGENCY NAME Franchise Tax Board CONTRACTOR NAME City of Hermosa Beach 2. The term of this Agreement is: START DATE June 1, 2019 or date of approval, whichever is later THROUGH END DATE December 31, 2021 3. The maximum amount.of this Agreement is: $0.00 (NON -FINANCIAL AGREEMENT) 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, EXHIBITS TITLE PAGES Exhibit A Scope of Work 3 Exhibit C General Terms and Conditions GTC417 Exhibit D Special Terms and Conditions 3 Exhibit E City and County Record Format Specifications 2 Exhibit F FTB Record Layout Specifications 1 Exhibit G Confidentiality Statement items snown wrrn an as f -), are nereoy incorporarea oy reference ano mace parr or cars agreemen r as fr auacneu nerero, These documents can be viewed at httos.//www.das.co.aovLOLS/Resources IN WITNESS WHEREOF, THIS AGREEMENTHAS BEEN EXECUTED BY THE PARTIES HERETO. CONTRACTOR CONTRACTOR NAME (Ifother than an Individual, state whether a corporation, partnership, etc.) City of Hermosa Beach CONTRACTOR BUSINESS ADDRESS CITY STATE ZIP 1315 Valley Drive Hermosa Beach CA 90254 TITLE PRINTED NAME OF PERSON SIGNING Viki Copeland Finance Director CONTRACTOR AUTHORIZED SIGNATURE DATE SIGNED Paqe 1 of 2 STATE OF CALIFORNIA- DEPARTMENT OF GENERAL SERVICES STANDARD AGREEMENT AGREEMENT NUMBER PURCHASING AUTHORITY NUMBER (If Applicable) STD 213 (Rev.03/2019) 100000000000000000000372231 STATE OF CALIFORNIA CONTRACTING AGENCY NAME FranchlseTax Board CONTRACTING AGENCY ADDRESS CITY STATE ZIP P.O. Box 2086 Rancho Cordova CA 95741 PRINTED NAME OF PERSON SIGNING TITLE Michael A. Banuelos Procurement and Contracting Officer or Designee CONTRACTING AGENCY AUTHORIZED SIGNATURE DATE SIGNED CALIFORNIA DEPARTMENT OF GENERAL SERVICES APPROVAL EXEMPTION (If Applicable) SCM 1 - 4.04.A.2. Paqe 2 of 2 City of Hermosa Beach Agreement # 37223 EXHIBIT A SCOPE OF WORK This agreement is entered into by and between the Franchise Tax Board, herein after referred to as (FTB), and the City of Hermosa Beach, herein after referred to as the City. Purpose: This agreement provides for the reciprocal exchange between FTB and the City tax data specific to city business license information for tax administration purposes. By entering into a reciprocal agreement, each party agrees to bear its own costs of providing the data, and the City is precluded from obtaining reimbursement, Both parties will abide by the legal and confidential provisions of this agreement. Exhibits A, C, D, E, F, and G, attached hereto and incorporated by reference herein, set forth additional terms to which the parties agree to be bound. No Federal Tax Information will be exchanged. Legal Authority: California Revenue and Taxation Code (R&TC) Section 19551.1 authorizes a reciprocal agreement for the exchange of specified tax information between a city/county and FTB. RUC Section 19551.5 mandates cities/counties to provide city/county business licensing and tax information to FTB upon request. ' City Responsibilities: 1. The City agrees that the information provided by FTB will be used exclusively to administer the City/County Business Tax program. 2. The City 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; and will only be accessed or used by city employees whose duties are to administer the City/County Business Tax program. 3. The City agrees to provide FTB with tax information pursuant to Format Specifications, Exhibit E, which shall include, but not be limited to, the following: • Business or owner's name • Business or residence address • Federal Employer Identification Number (FEIN) or Social Security Number (SSN) • Ownership type • North American Industry Classification Code or Standard Industry Classification Code • Business start and cessation dates • City Business Tax Number, to be assigned to the City by FTB 4. The City agrees to extract and provide city data to FTB annually in June for each tax year that the agreement is in place: June 2019, 2020, and 2021. If the agreement is executed after June 30, 2019, the City will have 30 days after execution to provide FTB with the first year's data. City of Hermosa Beach Agreement # 37223 EXHIBIT A SCOPE OF WORK 5, The City agrees to submit the records to FTB electronically using FTB's Secure Web Internet File Transfer (SWIFT) system. 6. The City agrees to submit the records to FTB in ASCII fixed -length format, .txt, per Exhibit E, Format Specifications. 7. The City agrees to resubmit data in the event data is initially submitted with errors. The resubmission of data must be within 30 days of notification. If data is not submitted accurately and timely, the City will forfeit its rights to FTB data for that year. 8. The City agrees that each city employee having access to FTB data shall sign City/County Business Tax Program Confidentiality Statement, Exhibit G, and FTB 712. The signed statement is to be retained by the City and produced to FTB upon request. 9. The City agrees to submit to FTB a completed Safeguard Review Questionnaire prior to receiving any FTB data. The Safeguard Review Questionnaire is valid for the duration of the agreement. 10. The City agrees to provide a copy of the resolution, order, minutes reflecting passage of a motion, or ordinance of the local governing body authorizing the execution of the agreement. FTB Responsibilities: 1. FTB agrees that information provided by the City will be used for tax administration and non -tax programs that FTB administers and may be shared with other state or federal agencies as authorized by law. 2. FTB 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, except as provided in paragraph 1 or otherwise authorized by law. 3. FTB agrees to provide the City with data extracted from the Taxpayer Information (TI) system and Business Entities Tax System (BETS). FTB will provide the City with records for taxpayers within the City's jurisdiction who indicate a business on their personal or business entity income tax return. The Record Layout, Exhibit F, FTB 909A shall include: • Taxpayer name • Taxpayer address • Taxpayer SSN or FEIN • Principal Business Activity code 4. FTB agrees to match the data provided by the City using the SSN or FEIN against FTB's data with a "Yes" or "No" indicator on the Record Layout, Exhibit F, FTB 909A. The first year's data match is at the discretion of FTB based on when the data is received from the City and processed. City of Hermosa Beach Agreement # 37223 EXHIBIT A SCOPE OF WORK 5. FTB agrees to provide the City with an annual data extract in December 2019 for tax year 2018, in December 2020 for tax year 2019, and in December 2021 for tax year 2020 via SWIFT. 6. FTB agrees to register the City for a SWIFT account allowing for the secure electronic transmission of data. 7. FTB agrees to provide the City with a unique city/county business tax number to be used for reporting purposes only. 8. FTB agrees to allow the City to resubmit data within 30 days of notification, in the event data is initially submitted with errors. Project Coordinators: The project coordinators during the term of this agreement will be: Franchise Tax Board Whitney Lake City/County Business Tax Program Lead Data Resources and Services Unit P.O. Box 1468, Mailstop A181 Sacramento, CA 95812-1468 Phone: (916) 845-6304 Email: FTBCCBT aOftb.ca.gov Return executed agreement to: Franchise Tax Board TaNita Guereca Business Acquisitions Analyst P.O. Box 2086, Mailstop A-374 Rancho Cordova, CA 95741-2086 Phone: (916) 845-7199 Fax: (916) 843-1098 City of Hermosa Beach Viki Copeland Finance Director 1315 Valley Drive Hermosa Beach, CA 90254 Phone: (310) 318-0225 Email: vcopeland(Mhermosabch.om Liz Zeigler Finance Cashier Supervisor Phone: (310) 318-0256 Email: IzeialerOhermosabch.oro City of Hermosa Beach Agreement # 37223 EXHIBIT D SPECIAL TERMS AND CONDITIONS DATA OWNERSHIP: The confidential tax information or sensitive information being provided under this agreement remains the exclusive property of the FTB, Confidential tax and sensitive data/information are not open to the public and require special precautions to protect from loss and unauthorized use, disclosure, modification, or destruction, The City (or County) shall have the right to use and process the disclosed information for the purposes stated in the Scope of Work of Exhibit A of this agreement, which right shall be revoked and terminated immediately upon termination of this agreement. 2. STATEMENT OF CONFIDENTIALITY: The FTB has tax returns and other confidential data in its custody. Unauthorized inspection or disclosure of federal returns and other - confidential data is a misdemeanor or a felony (R&TC Sections 19542, 19542.1, 19542.3 and 19552 and Government Code Section 90005). Upon the approval of this agreement and prior to any access to the confidential or sensitive data of the FTB, each City (or County) employee who may have access to the confidential data of FTB will be required to sign a City/County Business Tax Program Confidentiality Statement, Exhibit G, FTB 712, attesting to the fact that he/she is aware of the confidentiality of the data and the penalties for unauthorized disclosure thereof under applicable state and federal law. The signed statement(s) shall be retained by the City (or County) and furnished to FTB upon request. 3. USE OF INFORMATION: The City (or County) agrees that the information furnished or secured pursuant to this agreement shall be used solely for the purposes described in the Scope of Work of Exhibit A. The City (or County) 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 as identified in this section. 4. EMPLOYEE ACCESS TO INFORMATION: Both FTB and the City (or County) receiving data agree 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. The "need to know" standard is met by authorized employees who need information to perform their official duties in connection with the uses of the information authorized by this agreement. Each party receiving data recognize(s) their responsibility to protect the confidentiality of the information in its custody as provided by law and ensure that such information is disclosed only to those individuals and for such purposes as authorized by law and this agreement. PROTECTING CONFIDENTIAL INFORMATION/ INCIDENT REPORTING: Both agencies, receiving data, in recognizing the confidentiality of the information to be exchanged, agree to take all appropriate precautions to protect the confidential information obtained pursuant to this agreement from unauthorized disclosure, Both agencies receiving data will conduct oversight of its users with access to the confidential information provided under this agreement and will immediately notify the FTB's Information Security Audit Unit (SecurityAuditMaiI(cDftb.ca.gov) of any unauthorized or suspected unauthorized accesses, uses and/or disclosures (incidents). For purposes of this section, immediately is defined as within 24 hours of the discovery of the breach, The notification must describe the incident in detail and identify responsible personnel (name, title, and contact information). The City (or County) with an incident will comply with the incident reporting requirements in accordance with R&TC Section 19542.1, Civil Code Section 1798.29, SAM Chapter 5300, and SAM City of Hermosa Beach Agreement # 37223 EXHIBIT D SPECIAL TERMS AND CONDITIONS Section 20080 to facilitate or fulfill the required reporting to the taxpayers or state oversight agencies. INFORMATION SECURITY: Information security is defined as the preservation of the confidentiality, integrity, and availability of information. A secure environment is required to protect the confidential information obtained from FTB pursuant to this agreement. The City (or County) receiving data will store information so that it is physically secure from unauthorized access. The records received by the City (or County) will be securely maintained and accessible only by employees of the City (or County) business license or tax programs who are committed to protect the data from unauthorized access, use, or disclosure. All FTB electronic data must be encrypted when in transit using FIPS 140-2 approved encryption technology and be password protected and secure at all times when in storage. Confidential information obtained from the FTB must be secured in accordance with the State Administrative Manual, Chapters 5100 (EDP Standards) and 5300 (Information Security); National Institute of Standards and Technology (NIST) Special Publication 800-53 (moderate); and additional security requirements provided by FTB. 7, CLOUD COMPUTING ENVIRONMENT: A Cloud Computing Environment cannot be used to receive, transmit, store or process FTB's confidential data without prior written approval from FTB's Chief Security Officer, 8. DESTRUCTION OF RECORDS: All records received by the City (or County) y from FTB, and any database(s) created, copies made, or files attributed to the records received, will be returned or destroyed within three years of receipt or upon termination of the agreement due to a breach of its terms, whichever occurs earlier. The records shall be destructed in a manner to be deemed unusable or unreadable, and to the extent that an individual record can no longer be reasonably ascertained. The City (or County) will notify FTB City/County Business Tax program manager annually in writing at FTBCCBTa-FTB.CA,GOV that proper destruction methods have been applied. FTB will destroy city/county data in accordance with the department's data retention policies, 9. DISPUTE RESOLUTION: In the event of a dispute, the City (or County) shall file a "Notice of Dispute" with the Chief Financial Officer of the FTB within ten (10) days of discovery of the problem. Within ten (10) days, the Chief Financial Officer or his/her designee shall meet with the City (or County) for purposes of resolving the dispute. The decision of the Chief Financial Officer shall be final. 10. SAFEGUARD REVIEW QUESTIONNAIRE AND REVIEW: Prior to sending data to the City (or County), FTB requires the City (or County) to submit a Safeguard Review Questionnaire certifying the protection and confidentiality of FTB data. The City (or County) will be provided a minimum of seven (7) days' notice prior to an on -site safeguard review being conducted by FTB. FTB retains the right to conduct on -site safeguard reviews of the City (or County) use of FTB information and security controls established. The safeguard reviews may include, but are not limited to an examination of the adequacy of information security controls, "need to know," and use justifications established by the City (or County) to ensure compliance with the terms and conditions of this agreement. The City (or County) will take appropriate disciplinary actions against any user determined to have violated security or confidentiality requirements. City of Hermosa Beach Agreement # 37223 EXHIBIT D SPECIAL TERMS AND CONDITIONS 11. LIMITED WARRANTY: Neither party represents or warrants the accuracy or content of the material available through this agreement, nor each expressly disclaims any express or implied warranty, including any implied warranty of fitness for a specific purpose. 12. CANCELLATION: Either party may terminate this agreement, in writing for any reason, upon thirty (30) days' prior written notice. This agreement may be terminated immediately by either party in the event of any breach of the terms of this agreement. 13. NO THIRD PARTY LIABILITY: Nothing contained in or related to this agreement shall create any contractual relationship between either of the Parties and any other party, except between FTB and the City (or County); and no other party shall relieve the City (or County) or FTB of its responsibilities and obligations hereunder. Each of the parties agrees to be fully responsible for the acts and omissions of its third party contractors and agents, and of persons either directly or indirectly employed by the party. Neither of the parties shall have any obligation to pay, or to see to the payment of, any monies to any party or persons either directly or indirectly employed by the other, City of Hermosa Beach Agreement # 37223 EXHIBIT E CITY AND COUNTY RECORD FORMAT SPECIFICATIONS (FTB 909) Data Element Name Start End Field Usage Description Pos. Pos. Size SOCIAL SECURITY NUMBER 3 9 9 AN Must be present unless FEIN is (SSN) provided. Fill unused field with zeros. FEDERAL EMPLOYER 10 18 9 AN Must be present unless SSN is ID NUMBER (FEIN) provided. Fill unused field with zeros. OWNERSHIP TYPE 19 19 1 AN Must be present: S = Sole Proprietorship P = Partnership C = Corporation T = Trust L = Limited Liability Company OWNER'S LAST NAME 20 34 15 AN Must be present if Ownership Type in position 19 = S. OWNER'S FIRST NAME 35 45 11 AN Must be present if Ownership Type in position 19 = S OWNER'S MIDDLE INITIAL 46 46 1 AN May be left blank. BUSINESS NAME 47 86 40 AN Enter if business is operating under a fictitious name (Doing Business As (DBA)). BUSINESS ADDRESS 87 126 40 AN Address of the business location or NUMBER AND STREET the residence of the owner if sole proprietorship CITY 127 166 40 A Must be present. STATE 167 168 2 A Enter standard state abbreviation. ZIP CODE 169 177 9 AN Enter the five- or nine -digit ZIP Code assigned by the U.S. Postal Service. If only the first five -digits are known, left -justify information and fill the unused fields with zeros. BUSINESS START DATE 178 185 8 N Enter the eight -digit date (MMDDYYYY). Zero fill if not known. BUSINESS CEASE DATE 186 193 8 N Enter the eight -digit date (MMDDYYYY) if out of business. Zero fill if unknown or still in business. City of Hermosa Beach Agreement # 37223 EXHIBIT E CITY AND COUNTY RECORD FORMAT SPECIFICATIONS (FTB 909) Data Element Name Start End Field Usage Description Pos. Pos, Size CITY BUSINESS TAX 194 196 3 N Enter three -digit number assigned NUMBER by FTB, NORTH AMERICAN 197 202 6 N Enter the two- to six -digit NAICS INDUSTRY CLASSIFICATION code. Left justify. (example 99 will SYSTEM (NAICS) be 9900). Fill unused fields with zeros. STANDARD INDUSTRIAL 203 206 4 N Enter the 2-4 digit SIC code. Left CLASSIFICATION (SIC) justify (example 99 will be 9900). Fill unused fields with zeros. TOTAL RECORD LENGTH 206 City of Hermosa Beach Agreement # 37223 EXHIBIT F FRANCHISE TAX BOARD RECORD LAYOUT SPECIFICATIONS IFTB 909A) Field Name Length Start Description Pos, ENTITY TYPE 1 1 "P" — personal income tax record; "B" — business entity tax record. SSN or FEIN 9 2 For "P" records, primary taxpayer's social security number; For "B" records, federal employer identification number. LAST NAME 40 11 For "P" records, the primary taxpayer's last name; For "B" records, business name. FIRST NAME 11 51 For "P" records ONLY. MIDDLE INITIAL 1 62 For "P" records ONLY. SPOUSE SSN 9 63 For "P" records filed with a joint return. SPOUSE LAST NAME 17 72 For "P" records filed with a joint return. SPOUSE FIRST NAME 11 89 For "P" records filed with a joint return. SPOUSE MIDDLE INITIAL 1 100 For "P" records filed with a joint return. PBA CODE 6 101 Principal Business Activity code. ADDRESS NUMBER 10 107 PRE -DIRECTIONAL DIRECTOR 2 117 Postal Service term (i.e., N, S, E. W, NE, NW, SE, SW). STREET NAME 28 119 STREET SUFFIX 4 147 e.g., ST, WAY, HWY, BLVD, etc. POST -DIRECTIONAL INDICATOR 2 151 Postal Service term (i.e., N, S, E, W, NE, NW, SE, SW). STREET SUFFIX 2 4 153 APARTMENTISUITE NUMBER 10 157 e.g., APT, UNIT, FL, etc CITY 13 167 STATE 2 180 Standard state abbreviation. ZIP CODE 5 182 The five -digit ZIP Code assigned by the U.S Postal Service. ZIP CODE SUFFIX 4 187 Provided if known. CBT MATCH 1 191 "N" — No match per CBT data. "Y" — Yes; CBT matched to state tax return filed.