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RESOLUTION NO. 2018-225
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE DIRECTOR OF
FINANCE TO EXECUTE A RECIPROCAL DATA SHARING AGREEMENT WITH THE
FRANCHISE TAX BOARD
BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO AS FOLLOWS:
SECTION 1. The Mayor and City Council of the City of San Bernardino hereby authorize and
direct the Director of Finance to execute an information sharing agreement with the Franchise Tax
Board, attached hereto and incorporated herein as Exhibit A.
SECTION 2. The authorization to execute the above -referenced Agreement is hereby rescinded
if both parties fail to execute it within sixty (60) days of the passage of this Resolution.
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE DIRECTOR OF
FINANCE TO EXECUTE A RECIPROCAL DATA SHARING AGREEMENT WITH THE
FRANCHISE TAX BOARD
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
City Council of the City of San Bernardino at a Joint Regular Meeting thereof, held on the 1" day
of Augist 2018, by the following vote, to wit:
Council Members: AYES NAYS ABSTAIN ABSENT
MARQUEZ X
BARRIOS X
VALDIVIA X(m)
SHORETT X
NICKEL X
RICHARD X
MULVIHILL X(S
Georgea Hanna, CMC, City Clerk
The foregoing Resolution is hereby approved this 1St day of Au ust 2018.
U
R. Carey Davis, ayor
City of San Be*nardino
Approved as to form:
Gary D. Saenz, City Attorney
2
STATE OF CALIFORNIA
STANDARD AGREEMENT
STD 213 (Rev 06/03)
AGREEMENT NUMBER
C1700198
REGISTRATION NUMBER
1. This Agreement is entered into between the State Agency and the Contractor named below:
STATE AGENCY'S NAME —
Franchise Tax Board
CONTRACTORS NAME
City of San Bernardino
2. The term of this
Agreement is: June 1, 2018 or date of approval, whichever is later, through December 31, 2020
3. The maximum amount $ 0.00
of this Agreement is: 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.
Exhibit A — Scope of Work
3 pages
Exhibit C* — General Terms and Conditions
GTC417
Exhibit D — Special Terms and Conditions
3 pages
Exhibit E — City/County Record Layout Specifications
2 pages
Exhibit F — FTB Record Layout Specifications
1 page
Exhibit G — 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 ,,. ,........0 ..0 _._------_--------------------•�- -st_
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CONTRACTOR
CONTRACTOR'S NAME (d other than an individual, :a; r• whether a corporation, parh"O, etc.)
City of San Bernardino
BY (Authorized Sign re) DATE SIGNED(Do not type)
PRINTED NAME AN TITLE OF PERSON SIGNING
ADDRESS
290 N D Street. San Bernardino, CA 92418
STATE OF CALIFORNIA
AGENCY NAME
FranqAis,e,,Tax Board
BY DATESI NED�C] r►d type)
PRINTED NAME AND TITLE OF PERSON SIGNING
Michael A. Banuelos, Procurement and Contracting Officer or Designee
ADDRESS
P.O. Box 2086, Rancho Cordova, CA 95741-2086
Calffomfa Deparlinent of General
Services Use Only
® Exempt per: SCM 1 - 4.04.A.2.
City of San Bernardino
Agreement # C1700198
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 San Bernardino, 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 citiestcounties 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 2018, 2019, and 2020. If the Agreement is executed after June
30, 2018, the City will have 30 days after execution to provide FTB with the first year's data.
Page 2 of 11
City of San Bernardino
Agreement # C1700198
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, .bd, per the Format
Specifications, Exhibit E.
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 a 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.
Page 3 of 11
City of San Bernardino
Agreement # C1700198
EXHIBIT A
SCOPE OF WORK
5. FTB agrees to provide the City with an annual data extract in December 2018 for tax year 2017,
in December 2019 for tax year 2018, and in December 2020 for tax year 2019 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 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
Felicia Hicks
City/County Business Tax Program Manager
Data Resources and Services Unit
P.O. Box 1468, Mailstop A181
Sacramento, CA 95812-1468
Phone: (916) 845-6304
Email: FTB CCBTgftt
Return executed agreement to:
Franchise Tax Board
Marisa Lai
Business Acquisitions Unit
P.O. Box 2086, Mailstop A-374
Rancho Cordova, CA 95741-2086
Phone: (916) 845-4518
Fax: (916) 843-2298
City of San Bernardino
Telicia Lopez
Manager
290 N D Street
San Bernardino, CA 92418
Phone: (909) 384-7272
Email: lopez te0-sbcitv.org
Page 4 of 11
City of San Bernardino
Agreement # C1700198
EXHIBIT D
SPECIAL TERMS AND CONDITIONS
1. 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 the 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.
5. PROTECTING CONFIDENTIAL INFORMATION/ INCIDENT REPORTING: Both agencies,
receiving data, in recognizing the confidentiality of the information to be exchanged,
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
(SecuritvAuditMail(a)-ftb.ca.aov) 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
Section 20080 to facilitate or fulfill the required reporting to the taxpayers or state oversight
agencies.
Page 5 of 11
City of San Bernardino
Agreement # C1700198
EXHIBIT D
SPECIAL TERMS AND CONDITIONS
6. 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 FTB CCBTO-FTB.CA.GU 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.
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.
Page 6 of 11
City of San Bernardino
Agreement # C1700198
EXHIBIT D
SPECIAL TERMS AND CONDITIONS
12. CANCELLATION: Either parry 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.
Page 7 of 11
City of San Bernardino
Agreement # C1700198
EXHIBIT E
CITY AND COUNTY RECORD FORMAT SPECIFICATIONS (FTB 909)
Data Element Name Start End Field Usage Description
Pos. Pos. Size
SOCIAL SECURITY NUMBER
(SSN)
FEDERAL EMPLOYER
ID NUMBER (FEIN)
OWNERSHIP TYPE
1 9 9
10 18 9
19 19 1
OWNER'S LAST NAME
20
34
15
OWNER'S FIRST NAME
35
45
11
OWNER'S MIDDLE INITIAL
46
46
1
BUSINESS NAME
47
86
40
BUSINESS ADDRESS
NUMBER AND STREET
CITY
STATE
ZIP CODE
BUSINESS START DATE
BUSINESS CEASE DATE
87 126 40
127
166
40
167
168
2
169
177
9
178 185 8
186 193 8
Page 8 of 11
AN
Must be present unless FEIN is
provided. Fill unused field with
zeros.
AN
Must be present unless SSN is
provided. Fill unused field with
zeros.
AN
Must be present:
S = Sole Proprietorship
P = Partnership
C = Corporation
T = Trust
L = Limited Liability Company
AN
Must be present if Ownership Type
in position 19 = S.
AN
Must be present if Ownership Type
in position 19 = S.
AN
May be left blank.
AN
Enter if business is operating under
a fictitious name (Doing Business
As (DBA)).
AN
Address of the business location or
the residence of the owner if sole
proprietorship.
A
Must be present.
A
Enter standard state abbreviation.
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.
N
Enter the eight -digit date
(MMDDYYYY). Zero fill if not
known.
N
Enter the eight -digit date
(MMDDYYYY) if out of
business. Zero fill if unknown or still
in business.
City of San Bernardino
Agreement # C1700198
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
Page 9 of 11
City of San Bernardino
Agreement # C1700198
EXHIBIT F
-RANCHISE TAX BOARD RECOKo LAYOUT SPECIFICATIONS (FTB 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 "Ba 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
APARTMENT/SUITE 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.
Page 10 of 11
State of California
City of San Bernardino
Agreement # C1700198
EXHIBIT G
CONFIDENTIALITY STATEMENT (FTB 7121
Franchise Tax Board
City/County Business Tax Program Confidentiality Statement
Confidential tax data 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 data is in the best interest of the city, county, and state.
As a city/county employee, you are required to protect all information received from the
Franchise Tax Board (FTB). To protect confidential tax data, you must:
• Access or modify tax data solely to perform official duties.
• Never access or inspect tax data for curiosity or personal reasons.
• Never show or discuss confidential tax data with anyone who does not have a need
to know.
• Never remove confidential tax data from your worksite without authorization.
• Place confidential tax data in approved locations only.
Unauthorized inspection, access, use, or disclosure of confidential tax data is a crime under state laws
including, but not limited to, California Revenue and Taxation Code Sections 19542 and 19552 and
Penal Code Section 502. Unauthorized access, inspection, use, or disclosure may result in either or
both of the following:
• State criminal action.
• Taxpayer civil action.
I certify that I have read the confidentiality statement printed above. I 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 against me.
Name (print)
Sienature
Date
Each city/county employee accessing FTB data must retain a signed copy of this form and provide it to
FTB upon request.
FTB 712 (REV 06-2016)
Page 11 of 11