1 177146-3 : n : 04/20/2016 : sanford / hmb 7 8 13 with...
TRANSCRIPT
1 177146-3 : n : 04/20/2016 : SANFORD / hmb
2
3 SENATE COUNTY AND MUNICIPAL GOVERNMENT COMMITTEE SUBSTITUTE
4 FOR SB335
5
6
7
8
9 SYNOPSIS: Under existing law, the Alabama Taxpayers'
10 Bill of Rights and Uniform Revenue Procedures Act
11 provides procedures for the operation of the
12 Department of Revenue and for all taxpayers dealing
13 with the department. The law further provides for
14 government contracts with private auditing or
15 collecting firms for the collection of certain
16 taxes and fees and for the performance of certain
17 audits.
18 This bill would further require signed and
19 dated written authorization be given by a
20 self-administered municipality or county to any
21 person examining the books and records of a
22 taxpayer on behalf of the self-administered
23 municipality or county before the person can
24 examine those books and records.
Page 1
1 This bill would require certain disclosures
2 be made by a person examining a taxpayer's books
3 and records.
4 This bill would further provide for the time
5 frame in which a private auditing or collecting
6 firm engaged by a self-administered municipality or
7 county may commence an examination under certain
8 conditions.
9 This bill would require a private auditing
10 or collecting firm be subject to certain
11 confidentiality requirements, would require the
12 taxing authority to use an independent hearing or
13 appeals officer, and would require a public
14 official or employee of the taxing authority sign
15 the final assessment.
16 This bill would provide that the minimum
17 education requirement for the certification of an
18 examiner of a private auditing or collecting firm
19 by the Alabama Local Tax Institute of Standards and
20 Training Board would be a bachelor's degree in
21 accounting and satisfactory completion of the
22 certification program adopted by the board.
23 This bill would require the Alabama Local
24 Tax Institute of Standards and Training Board to
25 establish a hotline to receive taxpayer complaints
Page 2
1 related to the activities of a private auditing or
2 collecting firm.
3
4 A BILL
5 TO BE ENTITLED
6 AN ACT
7
8 To amend Sections 40-2A-3, 40-2A-6, 40-2A-12,
9 40-2A-13, 40-2A-14, and 40-2A-15 of the Code of Alabama 1975,
10 relating to the Alabama Taxpayers' Bill of Rights and Uniform
11 Revenue Procedures Act; to further define terms; to further
12 require signed and dated written authorization for examining
13 the books and records of a taxpayer under certain conditions;
14 to require certain disclosures; to further provide the time
15 frame in which a private auditing or collecting firm engaged
16 by a self-administered municipality or county may commence an
17 examination; to require certain confidentiality requirements;
18 to provide for an independent hearing or appeals officer; to
19 require a public official or employee of the taxing authority
20 sign the final assessment; to provide minimum education
21 requirements for examiners of private auditing or collecting
22 firms; and to require the Alabama Local Tax Institute of
23 Standards and Training Board to establish a hotline to receive
24 taxpayer complaints related to the activities of a private
25 auditing or collecting firm.
26 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Page 3
1 Section 1. Sections 40-2A-3, 40-2A-6, 40-2A-12,
2 40-2A-13, 40-2A-14, and 40-2A-15 of the Code of Alabama 1975,
3 are amended to read as follows:
4 "§40-2A-3.
5 "For the purposes of this chapter and Chapter 2B,
6 the following terms shall have the following meanings:
7 "(1) ASSOCIATE ALABAMA TAX TRIBUNAL JUDGE. An
8 associate judge as defined in Section 40-2B-2.
9 "(2) AUTHORIZED REPRESENTATIVE. Any individual,
10 including, but not limited to, an attorney or certified public
11 accountant with written authority or power of attorney to
12 represent a taxpayer before the department or the Alabama Tax
13 Tribunal; provided however, that nothing herein shall be
14 construed as entitling any such individual who is not a
15 licensed attorney to engage in the practice of law.
16 "(3) CHIEF ALABAMA TAX TRIBUNAL JUDGE or CHIEF
17 JUDGE. The chief judge as defined in Section 40-2B-2.
18 "(4) COMMISSIONER. The commissioner of the
19 department or his or her delegate.
20 "(5) COMPTROLLER. The Comptroller of the State of
21 Alabama.
22 "(6) DELEGATE. When used with reference to the
23 commissioner means any officer or employee of the department
24 duly authorized by the commissioner, directly or indirectly,
25 by one or more redelegations of authority, to perform the
26 function described in the context.
Page 4
1 "(7) DEPARTMENT or DEPARTMENT OF REVENUE. The
2 Alabama Department of Revenue.
3 "(8) GROSS RECEIPTS TAX IN THE NATURE OF A SALES
4 TAX. A privilege or license tax, imposed by a municipality or
5 county, measured by gross receipts or gross proceeds of sale
6 and which: (i) was in effect on or before February 25, 1997,
7 or is an amendment to a tax which was in effect on that date;
8 (ii) is levied against those selling tangible personal
9 property at retail, those operating places of amusement or
10 entertainment, those making street deliveries, and those
11 leasing or renting tangible personal property; and (iii) is
12 due and payable to a county or municipality monthly or
13 quarterly.
14 "(9) FINAL ASSESSMENT. The final notice of value,
15 underpayment, or nonpayment of any tax administered by the
16 department.
17 "(10) INTEREST. That amount computed under Section
18 40-1-44, on any overpayment or underpayment of tax or under
19 Section 40-2A-18 on a final assessment.
20 "(11) INTERNAL REVENUE SERVICE. The agency of the
21 United States principally responsible for the determination,
22 assessment, and collection of taxes established by Title 26 of
23 the United States Code.
24 "(12) NOTICE OF APPEAL. Any written notice
25 sufficient to identify the name of the taxpayer or other party
Page 5
1 appealing, the specific matter appealed from, the basis for
2 that appeal, and the relief sought.
3 "(13) PERSON. Any individual, association, estate,
4 trust, partnership, corporation, or other entity of any kind.
5 "(14) PETITION FOR REFUND. Any written request for a
6 refund of any tax previously paid, including in the form of an
7 amended return. Unless otherwise provided by law, the request
8 shall include sufficient information to identify the type and
9 amount of tax overpaid, the taxpayer, the period included, and
10 the reasons for the refund.
11 "(15) PETITION FOR REVIEW. A written document filed
12 with the department in response to a preliminary assessment in
13 which the taxpayer sets forth reasonably specific objections
14 to the preliminary assessment.
15 "(16) PRELIMINARY ASSESSMENT. The preliminary notice
16 of value or underpayment of any tax administered by the
17 department.
18 "(17) PRIVATE AUDITING OR COLLECTING FIRM. Any
19 person in the business of collecting, through contract or
20 otherwise, local sales, use, rental, lodgings or other taxes
21 or license fees for any county or municipality, or auditing
22 any taxpayer, through the examination of books and records,
23 for any county or municipality. The term shall also be
24 referred to as a third-party auditing firm, a third-party
25 collecting firm, or a third-party administrator. The term
26 shall not include any of the following:
Page 6
1 "a. The Department of Revenue.
2 "b. A county or municipality that has entered into a
3 contract or other arrangement to collect local sales, use,
4 rental, lodgings, or other taxes or license fees on behalf of
5 another county or municipality, or to audit a taxpayer,
6 through the examination of books and records, on behalf of
7 another county or municipality.
8 "c. A person or firm whose sole function and purpose
9 on behalf of a municipality or group of municipalities is to
10 collect delinquent insurance premium license fees levied by
11 that municipality or group of municipalities, and who has no
12 authority to determine the amount of license fee, interest,
13 court cost, or penalty owed to the municipality or group of
14 municipalities.
15 "(18) PUBLICATION 1A. A written pamphlet to be
16 distributed by the department to all taxpayers whose books and
17 records are being examined by the department, at or before the
18 commencement of an examination, explaining in simple and
19 nontechnical terms, the role of the department and the rights
20 of the taxpayer whose books and records are being examined by
21 the department during the examination and which shall be
22 promptly revised from time to time to reflect any changes in
23 the applicable law or rules.
24 "(19) RETURN. Any report, document, or other
25 statement required to be filed with the department for the
Page 7
1 purpose of paying, reporting, or determining the proper amount
2 of value or tax due.
3 "(20) SECRETARY. The secretary of the department.
4 "(21) SELF-ADMINISTERED COUNTY OR MUNICIPALITY. A
5 county or municipality that administers its own sales and use
6 taxes or other local municipal or county taxes levied or
7 authorized to be levied by a general or local act, or
8 contracts out all or part of that function to a private
9 auditing or collecting firm. The term does not include any of
10 the following:
11 "a. A county or municipality that allows the
12 department to administer a sales, use, rental, or lodgings tax
13 which is levied by or on behalf of that county or
14 municipality.
15 "b. A municipality or county that levies a gross
16 receipts tax in the nature of a sales tax, as defined in
17 subdivision (8). A county or municipality that both
18 self-administers a sales, use, rental, or lodgings tax and
19 allows the department to administer a sales, use, rental, or
20 lodgings tax that is levied by or on behalf of the county or
21 municipality is only a self-administered county or
22 municipality with respect to those sales, use, rental, or
23 lodgings taxes that the county or municipality administers
24 itself or for those taxes that it contracts for the
25 collection.
Page 8
1 "(22) TAX. Any amount, including applicable penalty
2 and interest, levied or assessed against a taxpayer and which
3 the department or any county, municipality, or their designees
4 are required or authorized to administer under the provisions
5 of Alabama law.
6 "(23) ALABAMA TAX TRIBUNAL. The Alabama Tax Tribunal
7 as described in Chapter 2B.
8 "(24) TAXPAYER. Any person subject to or liable for
9 any state or local tax; any person required to file a return
10 with respect to, or to pay, or withhold and remit any state or
11 local tax or to report any information or value to the
12 department, a county, municipality, or its designee; or any
13 person required to obtain or holding any interest in any
14 license, permit, or certificate of title issued by the
15 department, a county, municipality, or its designee, or any
16 person that may be affected by any act or refusal to act by
17 the department, a county, municipality, or its designee, or to
18 keep any records required by this chapter.
19 "(25) TAXPAYER ADVOCATE. The person so designated
20 from time to time by the commissioner to assist the taxpayers
21 of the State of Alabama with regard to tax issues resulting
22 from any taxes administered or collected by the department.
23 "(26) TAXPAYER ASSISTANCE ORDER. A written order
24 issued by the Taxpayer Advocate and approved by either the
25 commissioner or assistant commissioner which, among other
26 items, states the facts and grants relief to a taxpayer
Page 9
1 concerning an issue in dispute with the department with regard
2 to tax issues resulting from any taxes administered or
3 collected by the department.
4 "§40-2A-6.
5 "(a) The state or any county or municipal governing
6 authority may not enter into any contract or arrangement for
7 the examination of a taxpayer's books and records, written or
8 otherwise, with a private auditing or collecting firm, if any
9 part of the compensation or other benefits paid or payable for
10 the services of to the private examining auditing or
11 collecting firm conducting the examination is contingent upon
12 or otherwise in any manner related to the amount of tax,
13 license fee, interest, court cost, or penalty, or any other
14 item assessed against or collected from the taxpayer. Any such
15 contract or arrangement, if made or entered into, is void and
16 unenforceable. Any assessment or preliminary assessment of
17 taxes, license fees, penalties, court costs, or interest, or
18 other items proposed or asserted by, or based upon the
19 recommendation of, a private examining auditing or collecting
20 firm compensated under any such contract or arrangement shall
21 be void and unenforceable. This provision does not prohibit or
22 restrict the state or any county or municipal governing
23 authority from entering into contracts or arrangements for the
24 collection of any tax, interest, court cost, or penalty when
25 the private examining auditing or collecting firm has no
26 authority to determine the amount of tax, interest, court
Page 10
1 cost, or penalty owed the state, county, or municipal
2 governing authority.
3 "(b) The compensation or other benefits paid or
4 payable to any employee or other agent of a private examining
5 auditing or collecting firm or to any employee or other agent
6 of the state or county or municipal governing authority
7 serving in the capacity of a hearings or appeals officer,
8 including an attorney serving in that capacity, may not be
9 contingent upon, in whole or in part, or otherwise related to
10 in any manner, the amount of tax, license fee, interest, court
11 cost, or penalty, or other item assessed against or collected
12 from the taxpayer. Any contract or arrangement based, in whole
13 or in part, on any such contingency is void and unenforceable.
14 Any assessment or preliminary assessment of taxes, license
15 fees, penalties, court cost, or interest, or other items
16 proposed or asserted by or upon the recommendation of a
17 private examining auditing or collecting firm, compensated
18 under any such contract or arrangement, is void and
19 unenforceable.
20 "(c) Any person violating this section, for each
21 violation, shall have committed a Class A misdemeanor.
22 Violators shall also forfeit any certification granted under
23 Section 40-2A-14. Any private examining auditing or collecting
24 firm that violates subsections (a) or (b) shall forfeit its
25 license issued under Section 40-12-43.1 until such time as it
26 and each of its examiners or other employees or agents
Page 11
1 involved in the violation meet any remedial requirements
2 prescribed by the board created under Section 40-2A-15. This
3 provision may not, however, preclude employees of a private
4 examining auditing or collecting firm from participating in a
5 profit-sharing arrangement generally made available to other
6 employees of the firm who are not engaged in examining
7 taxpayers' books and records, provided that the formula
8 utilized in calculating the profit-sharing allocations is
9 based primarily on the overall profitability of the firm and
10 secondarily on non-monetary criteria such as age or years of
11 service.
12 "(d) Except as otherwise provided in this
13 subsection, the state or any county or municipal governing
14 authority may not assess or attempt to assess a taxpayer for
15 any costs incurred by, or charged to, the state, county, or
16 municipality in connection with performing an examination of
17 the taxpayer's books and records, including lodging, meals, or
18 mileage charges, and any assessment or proposed assessment of
19 such costs is void and unenforceable. A self-administered
20 county or municipality may, however, assess and collect from
21 the taxpayer the reasonable costs, based on the then current
22 state government employee per diem rates incurred by, or
23 charged to, the county or municipality in connection with
24 performing an examination of the taxpayer's books and records,
25 if the taxpayer received notice by certified U.S. mail, return
26 receipt requested, at least 30 days prior to the date on which
Page 12
1 the examination was to commence and the taxpayer either failed
2 or refused to respond or did not propose a reasonable
3 alternative date on which the examination was to commence
4 within 15 days of receipt of notice of the pending
5 examination, or the taxpayer and the self-administered county
6 or municipality agreed in writing as to an alternative date on
7 which the examination was to commence but the taxpayer then
8 failed or refused to permit reasonable access to its books and
9 records on the alternative date. This subsection does not
10 apply to examinations of the books and records of a taxpayer
11 with respect to the insurance premium license tax levied by
12 Chapter 4A, Title 27, or examinations for gasoline or motor
13 fuel taxes if authorized by local law in effect on July 1,
14 1998.
15 "§40-2A-12.
16 "No contract between a self-administered
17 municipality or county and a private examining auditing or
18 collecting firm entered into for the purpose of examining or
19 collecting municipal or county taxes shall have a term in
20 excess of three years, including any renewal or extension
21 options, and any contract between a self-administered
22 municipality or county and a private examining auditing or
23 collecting firm shall terminate automatically, whether or not
24 it is stated in the contract, if the private examining
25 auditing or collecting firm loses or forgoes its license under
26 Sections 40-2A-13 or 40-2A-14. The limitation on the term of a
Page 13
1 contract between a self-administered county or municipality
2 and a private examining auditing or collecting firm does not
3 prohibit the negotiation of a new contract between the parties
4 following expiration of a properly executed contract.
5 Contracts executed on or after October 1, 2016, shall be
6 subject to termination upon either party giving 90 days'
7 written notice to the other party.
8 "§40-2A-13.
9 "(a) The Department of Revenue, a governing body of
10 a self-administered county or municipality, or an agent of
11 such a municipality or county may not conduct an examination
12 of a taxpayer's books and records for compliance with
13 applicable sales, use, rental, or lodgings tax laws except in
14 accordance with this section and with the Alabama Taxpayers'
15 Bill of Rights and Uniform Revenue Procedures Act.
16 "(b) Additional sales, use, rental, or lodgings tax
17 may be assessed by the Department of Revenue, a governing body
18 of a self-administered county or municipality, or an agent of
19 such a municipality or county within any applicable period
20 allowed pursuant to Section 40-2A-7(b), even though a
21 preliminary or final assessment has previously been entered by
22 the Department of Revenue, a governing body of a
23 self-administered county or municipality, or an agent of such
24 a municipality or county against the same taxpayer for the
25 same or a portion of the same tax period. No taxpayer,
26 however, shall be subject to unnecessary examination or
Page 14
1 investigation, and no more than one examination of a
2 taxpayer's books and records by each respective taxing entity
3 relating to each type of tax shall be made every three taxable
4 years, unless the taxpayer requests otherwise or unless the
5 commissioner, or the corresponding governing body of a
6 self-administered county or municipality, after investigation,
7 notifies the taxpayer in writing that an additional
8 examination is necessary, together with the basis or bases for
9 the additional examination.
10 "(c) The Department of Revenue and each governing
11 body of a self-administered county or municipality shall
12 promulgate regulations or procedures consistent with those
13 followed by the Internal Revenue Service with respect to
14 second examinations of a taxpayer's books and records.
15 Provided, however, an examination of a taxpayer's books and
16 records may be conducted and shall not constitute an
17 unnecessary examination pursuant to this section or the
18 Alabama Taxpayers' Bill of Rights and Uniform Revenue
19 Procedures Act if the examination is necessary to meet one or
20 more of the following criteria: (i) fulfill an obligation to
21 another state pursuant to a Southeastern Association of Tax
22 Administrators ("SEATA") exchange of information agreement or
23 to the Multistate Tax Commission; (ii) follow up on leads
24 furnished by the Multistate Tax Commission or pursuant to a
25 SEATA exchange agreement; (iii) verify a direct or joint
26 refund claim and to determine if there is any offsetting tax
Page 15
1 liability to be credited against or that may exceed the refund
2 claim; (iv) secure a tax return and the tax, penalty,
3 interest, and service charge, if any, due thereon for any
4 reporting period for which the taxpayer has failed to file a
5 return by the due date of the return; (v) collect any tax,
6 penalty, interest, or service charge which the taxpayer has
7 failed to remit within 30 days after receiving notification
8 that the amount is due; (vi) secure a corrected return and the
9 additional tax, penalty, interest, or service charge due
10 thereon, if any, when the taxpayer has failed to file a
11 corrected return and remit any additional amount due thereon
12 within 30 days of receiving a request for a corrected return;
13 (vii) collect any tax due based upon substantial evidence of
14 fraud or tax evasion discovered since the prior examination,
15 and then only if the Department of Revenue or the governing
16 body of the self-administered municipality or county explains
17 to the taxpayer in writing the basis for the alleged fraud or
18 tax evasion; or (viii) follow up on representations by the
19 taxpayer that it is going out of business or the taxpayer has
20 gone out of business.
21 "(d) Any person examining a taxpayer's books and
22 records on behalf of a self-administered municipality or
23 county shall disclose in writing, upon first contact with the
24 taxpayer, the identity of the self-administered municipalities
25 and counties represented, and provide signed and dated written
26 authorization, or a copy of signed and dated written
Page 16
1 authorization, from each self-administered municipality and
2 county represented. Also, a copy of the contract between the
3 entity and the self-administered municipality or county, and a
4 statement as to whether the municipality or county has elected
5 out of the tax tribunal shall be provided upon first contact
6 with the taxpayer.
7 "(e) On or before January 15 of each year, beginning
8 in 1999, each private examining auditing or collecting firm
9 shall disclose in writing to the department, and to the
10 self-administered municipalities and counties it represents as
11 of the date of disclosure, the identity of all municipalities
12 and counties for which it at any time during the preceding
13 calendar year performed examinations of taxpayers' books and
14 records for compliance with applicable sales, use, rental, or
15 lodgings tax laws or collected sales, use, rental, or lodgings
16 taxes.
17 "(f) A private examining auditing or collecting firm
18 representing more than one self-administered municipality or
19 more than one self-administered county on the date of the
20 first contact with a taxpayer shall examine the taxpayer's
21 books and records for all such self-administered
22 municipalities and counties simultaneously. A private
23 examining auditing or collecting firm or its examiners or
24 other agents may not disclose or encourage others to disclose,
25 either directly or indirectly, to any non-client municipality
Page 17
1 or county or its agents, the fact that the firm is presently
2 conducting an examination of the taxpayer's books and records.
3 "(g) If a private examining auditing or collecting
4 firm is engaged by a self-administered municipality or county
5 not represented by the firm on the date of the first contact
6 with the taxpayer, and is not in violation of subsection (f),
7 the private examining auditing or collecting firm may conduct
8 an examination of the taxpayer's books and records on behalf
9 of the newly-represented self-administered municipality or
10 county, but the examination may not commence until at least
11 one year three years following the date of completion of the
12 previous examination, as certified in writing by the private
13 examining auditing or collecting firm to the taxpayer, unless
14 one of the grounds for early examination described in
15 subsection (c) exists, or unless the one-year delay would
16 result in the closing of a tax year by virtue of the
17 applicable statute of limitations and the taxpayer fails or
18 refuses, within a reasonable time after written request, to
19 agree in writing to a one-year extension of the an applicable
20 statute of limitations in favor of the newly-represented
21 self-administered municipality or county.
22 "(h) Whenever the private examining auditing or
23 collecting firm becomes aware that a taxpayer may be owed a
24 refund by, or may owe tax to, one or more self-administered
25 counties or municipalities represented by the firm, the firm
26 shall promptly notify the taxpayer in writing and,
Page 18
1 simultaneously, the respective self-administered counties and
2 municipalities, of the reason or reasons for, and the
3 estimated amount of, the refund due or tax owed and shall also
4 advise the taxpayer of the general procedure by which to make
5 a claim for refund or pay the tax. If the private examining
6 auditing or collecting firm refuses or willfully fails to
7 comply with this subsection, and the taxpayer ultimately
8 receives a refund from or pays a tax to a self-administered
9 county or municipality represented by the firm during the
10 course of an examination of more than one hundred dollars
11 ($100) of taxes for which the firm examined the taxpayer's
12 books and records, the firm shall forfeit its license granted
13 pursuant to Section 40-12-43.1 for a period of six months, and
14 each examiner who participated in the examination of the
15 taxpayer's books and records, but did not advise the firm in
16 writing of the possible refund due or tax liability owed at,
17 or prior to completion of, the examination, shall forfeit his
18 or her license granted under Section 40-12-43.1 for a period
19 of six months. At the expiration of the suspension period, any
20 examiner or private examining auditing or collecting firm
21 desiring to reinstate their license must reapply under the
22 provisions of Section 40-12-43.1.
23 "(i) A final assessment or forced collection action
24 based upon an audit conducted by a private auditing or
25 collecting firm shall not be issued and applicable to a
26 taxpayer until signed by a public official or employee
Page 19
1 designated by the self-administered county or municipality.
2 This document shall not be subject to Section 36-12-40.
3 "(j) A self-administered county or municipality,
4 which has chosen to opt-out of participation in the Alabama
5 Tax Tribunal as per Section 40-2B-2, shall retain the services
6 of an independent hearing or appeals officer who is not
7 affiliated with the private auditing or collecting firm to
8 conduct any hearings held pursuant to Section 40-2B-2.
9 "§40-2A-14.
10 "(a) Except as provided in subsection (c), any
11 examiner employed by a private examining auditing or
12 collecting firm to examine books and records of taxpayers on
13 behalf of any self-administered county or municipality shall
14 be certified by the Alabama Local Tax Institute of Standards
15 and Training established pursuant to Section 40-2A-15. Any
16 examiner employed by a private examining auditing or
17 collecting firm to examine books and records of taxpayers on
18 behalf of any self-administered county or municipality as of
19 July 1, 1998, shall have two years from the effective date of
20 the rules and regulations of the certification program to
21 obtain the certification required by this subsection and may
22 continue to conduct examinations during this two-year period.
23 "(b) Except as provided in subsection (c), every
24 private examining auditing or collecting firm shall maintain
25 fidelity bonds with respect to each of its examiners, in
26 accordance with Section 40-23-30. A private examining auditing
Page 20
1 or collecting firm may not employ unbonded examiners,
2 auditors, or examiners who have failed to receive or maintain
3 their certification under subsection (a). Any violation of
4 this subsection of which the private examining auditing or
5 collecting firm knew or should have known shall have the
6 effect of doing all of the following:
7 "(1) Automatically terminate any contract or
8 arrangement between a self-administered county or municipality
9 and the private examining auditing or collecting firm.
10 "(2) Void any assessment or proposed assessment
11 issued by the self-administered county or municipality or its
12 agent as a result of any examination conducted, in whole or in
13 part, by the examiner, but shall not prohibit a
14 self-administered county or municipality from sending a
15 qualified examiner to reexamine the taxpayer's books and
16 records even though the required waiting period between
17 examinations has not expired or the applicable statute of
18 limitations has expired with respect to the period at issue.
19 "(3) Cause the private examining auditing or
20 collecting firm to forfeit its license granted pursuant to
21 Section 40-12-43.1 for a period of six months.
22 "(c) Certified public accountants and public
23 accountants licensed by the State Board of Public Accountancy
24 are exempt from the following requirements:
Page 21
1 "(1) To be certified by the Alabama Local Tax
2 Institute of Standards and Training pursuant to subsection
3 (a).
4 "(2) To maintain fidelity bonds with respect to each
5 of its examiners pursuant to subsection (b).
6 "(d) At the expiration of any suspension period, any
7 examiner or private examining auditing or collecting firm
8 desiring to reinstate their license must reapply under the
9 provisions of Section 40-12-43.1. The requirements,
10 restrictions, and penalties imposed by this section and
11 Section 40-2A-13 with respect to examiners shall apply equally
12 to those who are employees, as well as those who are
13 independent contractors, of private examining auditing or
14 collecting firms.
15 "(e) For the purposes of this chapter, a private
16 auditing or collecting firm is subject to the confidentiality
17 requirements of Section 40-2A-10.
18 "§40-2A-15.
19 "(a) There is hereby created the Alabama Local Tax
20 Institute of Standards and Training. All costs of operating
21 the institute shall be paid from public funds appropriated,
22 contributions received, or fees and license revenues collected
23 for this purpose.
24 "(b) The institute shall operate under the direction
25 and supervision of a board of directors. The board shall
26 organize, administer, control, oversee, and advise the
Page 22
1 institute so that the institute may carry out the purposes of
2 this section. The board shall promulgate reasonable rules and
3 regulations to effectuate this intent.
4 "(c) The board shall consist of six members as
5 follows:
6 "(1) Three representatives appointed by the Alabama
7 League of Municipalities, who shall either be municipal
8 officers, employees, or attorneys, at least one of whom shall
9 be a municipal revenue officer or finance officer.
10 "(2) Three representatives appointed by the
11 Association of County Commissions of Alabama, who shall either
12 be county officers, employees, or attorneys, at least one of
13 whom shall be a county revenue officer or finance officer.
14 "(d) The board may accept appropriations, grants,
15 gifts, donations, or contributions from: The federal
16 government; the state government; a county, municipal, or
17 local government; a board, bureau, commission, agency, or
18 establishment of any such government; any other organization,
19 firm, or corporation, public or private; and an individual or
20 groups of individuals in furtherance of the services,
21 purposes, duties, responsibilities, or functions vested in the
22 board and institute.
23 "(e) The board shall, as its first order of
24 business, develop a proposed examiner certification program
25 for the examiners of private examining auditing or collecting
26 firms. The program shall require minimum qualifications for
Page 23
1 certification, which shall include at least two years of
2 governmental examining experience or a bachelor's degree in
3 accounting from an accredited university or college and
4 satisfactory completion of the certification program adopted
5 by the board. Beginning October 1, 2016, the program shall
6 include a course on customer relations and professional
7 courtesy. The program shall also impose continuing education
8 rules which shall be substantially similar to the continuing
9 professional education requirements imposed by the State Board
10 of Public Accountancy with respect to public accountants. Once
11 the board has developed a proposed program, copies thereof
12 shall be distributed for comment to all counties and
13 municipalities, the Business Council of Alabama, the Alabama
14 Retail Association, the Alabama Chapter of the National
15 Federation of Independent Business, and the department. Copies
16 may be sold to other interested parties at cost. Written
17 comments may be submitted to the board within 45 days of
18 initial distribution of the proposed program. Following
19 expiration of the comment period, the board shall adopt a
20 final examiner certification program to be administered by the
21 institute. Notwithstanding any provision of this subsection to
22 the contrary, any certified public accountant or public
23 accountant who is licensed by the State Board of Public
24 Accountancy shall be exempt from any certification requirement
25 or any separate continuing professional education requirement.
26 When any certified public accounting or public accounting firm
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1 is employed for the first time by a self-administered county
2 or municipality for local tax examinations, the firm shall
3 notify the board in writing of such employment.
4 "(f) The institute may, however, contract out the
5 examiner certification program to any one of the following:
6 "(1) The Alabama League of Municipalities or the
7 Association of County Commissions of Alabama, or any successor
8 or assignee to, or designee of, either of those organizations.
9 "(2) Any two-year or four-year college or university
10 in the state.
11 "(3) Any organization which the board believes can
12 and will conduct the program in a manner which is consistent
13 with this section.
14 "Any examiner certification program contracted out
15 pursuant to this subsection shall be conducted pursuant to the
16 rules and regulations promulgated by the board pursuant to
17 subsection (b). The institute or the organization with which
18 it contracts shall be authorized to charge a registration fee
19 to all participants in the certification and continuing
20 education programs.
21 "(g) The board shall also develop for the benefit of
22 all municipal, county, or private examiners conducting
23 examinations of taxpayers' books and records on behalf of
24 self-administered counties and municipalities, a minimum
25 standard examination program, not in conflict with the Alabama
26 Taxpayers' Bill of Rights and Uniform Revenue Procedures Act,
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1 to be followed by municipal, county, or private examiners when
2 examining a taxpayer's books and records for compliance with
3 applicable sales, use, rental, or lodgings tax laws of
4 self-administered counties and municipalities. Once the board
5 has developed a proposed program, copies thereof shall be
6 distributed for comment to all counties and municipalities,
7 the Business Council of Alabama, the Alabama Retail
8 Association, the Alabama Chapter of the National Federation of
9 Independent Business, and the department. Copies may be sold
10 to other interested parties at cost. Written comments may be
11 submitted to the board within 45 days of initial distribution
12 of the proposed program. Following expiration of the comment
13 period, the board shall adopt a minimum standard examination
14 program.
15 "(h) The institute shall have in place no later than
16 January 1, 2017, a toll free number identified as a hotline
17 for taxpayers to submit complaints related to the auditing or
18 collection activities of a private auditing or collecting
19 firm. A notice advising taxpayers of the hotline, including
20 the toll free number, shall at all times be posted in
21 conspicuous places in appropriate offices of any
22 self-administered county or municipality utilizing the
23 services of a private auditing or collecting firm and on the
24 website of the county or municipality, if available.
25 Additionally, a notice advising taxpayers of the hotline,
26 including the toll free number, shall be posted on the website
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1 of the Alabama Department of Revenue. The institute shall be
2 responsible for transcribing any complaints received through
3 the hotline, and shall on a quarterly basis beginning April 1,
4 2017, prepare a report of each complaint filed against an
5 auditing or collecting firm and forward the report, including
6 transcripts, to the auditing or collecting firm receiving the
7 complaints. The institute shall maintain reports for a period
8 of three years, and the reports shall be made available to a
9 self-administered county or municipality utilizing the
10 services of a private auditing or collecting firm which has
11 had complaints filed through the hotline. The records shall
12 otherwise be confidential and not subject to Section
13 36-12-40."
14 Section 2. This act shall become effective January
15 1, 2017, following its passage and approval by the Governor,
16 or its otherwise becoming law.
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