CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
TO: Honorable City Council
FROM: City Manager
SUBJECT: Resolution Approving an Agreement with the California Franchise Tax Board for Continued Participation in the Data Exchange Program Meeting Date: August 25, 2026
RECOMMENDATION:
Adopt the Resolution approving an agreement with the California Franchise Tax Board for continued participation in the Data Exchange Program for the period of January 1, 2027, through December 31, 2029.
BACKGROUND:
In September 2008, Senate Bill (SB) 1146 established a data-sharing framework between cities that administer business license programs and the California Franchise Tax Board (“FTB”). Under the program, participating cities provide business license information to the FTB, and in return receive limited taxpayer information that may assist in identifying businesses operating within the City that may not be properly registered or licensed. The City of Commerce has participated in the FTB Data Exchange Program since its inception. Participation in the program supports the City’s business license efforts by providing information that can be used to identify businesses conducting activity within the City, verify business license records, and improve overall compliance with the City’s business license requirements.
The current agreement is set to expire by December 31, 2026 and the proposed agreement will allow the City to continue participating in the program from January 1, 2027, through December 21, 2029. Continued participation will provide the Finance Department with an additional tool to assist in the administration and enforcement of the City’s business license program while minimizing administrative costs. The FTB imposes strict confidentiality requirements on all information exchanged under the program. The City is required to safeguard the information, restrict access only to authorized personnel, and destroy the data, if not used within 1 year. Approval of the proposed agreement will ensure uninterrupted participation in the program and allow the City to continue utilizing available data resources to improve business license compliance and protect local revenue sources.
FISCAL IMPACT:
There is no direct fiscal impact associated with approval of the proposed agreement. Participation in the Franchise Tax Board Data Exchange Program is provided at no cost to the City. Continued participation may result in increased business license compliance and revenue collection by assisting the City, and its third-party provider, in identifying businesses that may be operating within the City without a valid business license.
ALTERNATIVES:
Approve recommendation
Disapprove recommendation
Provide staff with further direction
Recommended by: Alvaro Castellon, Director of Finance
Approved as to form: Noel Tapia, City Attorney
Respectfully submitted: Ernie Hernandez, City Manager ATTACHMENTS:
1. Resolution
2. Agreement
3. Exhibit
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