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F I S C A L I M P A C T R E P O R T

SPONSOR Smith

ORIGINAL DATE

LAST UPDATED

1-26-06

1/27/06 HB

SHORT TITLE Disclosure of Tax Info to Licensing Bodies

SB 322

ANALYST Dearing

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB 389

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

Regulation and Licensing Department (RLD)

SUMMARY

Synopsis of Bill

Under enactment of Senate Bill 322 Taxation and Revenue Department would be authorized to

provide information to a licensing agency if a taxpayer who is required by the state to have a le-

gal, professional or occupational license fails to file a tax return or fails to pay a liability of

$1,000 or more. Failure to file a state or local tax return or to pay a tax liability over a specified

level would be added to the list of grounds for disbarment of an attorney. Failure to file a state

or local tax return or to pay a tax liability over a specified level would be added to the list of

grounds for suspension or revocation of a professional license.

Enacted legislation would be effective July 1, 2006.

FISCAL IMPLICATIONS

No significant fiscal impacts on state or local revenues.

Senate Bill 322 – Page

2

SIGNIFICANT ISSUES

According to the Regulation and Licensing Department, SB322 would add to the grounds for

suspension or revocation of a professional or occupational license another basis for suspension or

revocation unrelated to violations of a practice act, the most significant other such basis being the

ability of a board to take action against a professional license for failure to pay court ordered

child support.

From the standpoint of the professional and occupational licensing boards, enactment of SB322

would require the establishment of procedures for taking disciplinary action against licensees

based on these grounds.

The process of by which professional and occupational licensing boards commence action

against a licensee for failure to pay court ordered child support begins with an informal notice

from the board to the licensee advising that the licensee’s name has appeared on a list of indi-

viduals who are delinquent in their obligations, and giving the licensee thirty days to come into

compliance. Once the licensee produces a certificate of compliance from the Human Services

Department, the disciplinary proceeding is dismissed. The sponsor of SB322 might consider an

amendment providing for an informal notification process prior to the commencement of formal

disciplinary proceedings.

ADMINISTRATIVE IMPLICATIONS

Provisions of the bill could encourage tax compliance by attorneys and licensed professionals.

Provisions would require an electronic data exchange to obtain ID numbers and names of li-

censed individuals as well as notification of non-compliance. Other system changes will be re-

quired to determine compliance.

TECHNICAL ISSUES

Section 1(B). The definition of “settled tax liability” should be amended to include liability for

taxes not administered under the Tax Administration Act and to make the definition consistent

with the definition of “settled tax liability” in Sections 2(B) and 3(B) of the bill.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

If SB322 is not enacted, the Taxation and Revenue Department will not have this avenue through

which to collected unpaid taxes.

PD/mt:yr