Bill Summary – FastDemocracy

Unofficial Draft Copy
****                                              As of: 11/09/2024, 02:12:25
69th Legislature 2025                            Drafter: Jameson Walker, ****                                    LC 0103
                                                    **** BILL NO. ****
                                                  INTRODUCED BY ****
                                      BY REQUEST OF THE STATE AUDITOR
  4
  A BILL FOR AN ACT ENTITLED: “AN ACT REVISING CONFIDENTIALITY OF TAX RECORD LAWS TO
  ALLOW THE COMMISSIONER OF SECURITIES AND INSURANCE TO INVESTIGATE NONCOMPLIANCE,
  FRAUD, AND ABUSE UNDER SECURITIES AND INSURANCE LAWS; AMENDING SECTION 15-30-2618,
  MCA.”
  9
  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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          Section 1. Section 15-30-2618, MCA, is amended to read:
          "15-30-2618.    (Temporary) Confidentiality of tax records. (1) Except as provided in 5-12-303, 15-1-
  106, 17-7-111, and subsections (6) through (8) of this section, in accordance with a proper judicial order, or as
  otherwise provided by law, it is unlawful to divulge or make known in any manner:
          (a)      the amount of income or any particulars set forth or disclosed in any individual report or
  individual return required under this chapter or any other information secured in the administration of this
  chapter; or
          (b)      any federal return or federal return information disclosed on any return or report required by
  rule of the department or under this chapter.
          (2)      (a) The officers charged with the custody of the reports and returns may not be required to
  produce them or evidence of anything contained in them in an action or proceeding in a court, except in an
  action or proceeding:
          (i)      to which the department is a party under the provisions of this chapter or any other taxing act;
  or
          (ii)     on behalf of a party to any action or proceedings under the provisions of this chapter or other
  taxes when the reports or facts shown by the reports are directly involved in the action or proceedings.
          (b)      The court may require the production of and may admit in evidence only as much of the reports
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                                                    Unofficial Draft Copy
****                                               As of: 11/09/2024, 02:12:25
69th Legislature 2025                             Drafter: Jameson Walker, ****                                       LC 0103
  or of the facts shown by the reports as are pertinent to the action or proceedings.
          (3)      This section does not prohibit:
          (a)      the delivery to a taxpayer or the taxpayer's authorized representative of a certified copy of any
  return or report filed in connection with the taxpayer's tax;
          (b)      the publication of statistics classified to prevent the identification of particular reports or returns
  and the items of particular reports or returns;
          (c)      the inspection by the attorney general or other legal representative of the state of the report or
  return of any taxpayer who brings an action to set aside or review the tax based on the report or return or
  against whom an action or proceeding has been instituted in accordance with the provisions of 15-30-2630; or
          (d)      the delivery of information to the revenue interim committee relating to the annual job growth
  incentive tax credit as provided in 15-30-2361.
          (4)      Reports and returns must be preserved for at least 3 years and may be preserved until the
  department orders them to be destroyed.
          (5)      Any offense against subsections (1) through (4) is punishable by a fine not exceeding $500. If
  the offender is an officer or employee of the state, the offender must be dismissed from office or employment
  and may not hold any public office or public employment in this state for a period of 1 year after dismissal or, in
  the case of a former officer or employee, for 1 year after conviction.
          (6)      This section may not be construed to prohibit the department from providing taxpayer return
  information and information from employers' payroll withholding reports to:
          (a)      the department of labor and industry to be used for the purpose of investigation and prevention
  of noncompliance, tax evasion, fraud, and abuse under the unemployment insurance laws;
          (b)      the state fund to be used for the purpose of investigation and prevention of noncompliance,
  fraud, and abuse under the workers' compensation program; or
          (c)      the department of public health and human services to verify, as required under 53-6-133, the
  income reported by applicants for medical assistance; or
          (d)      the office of the Montana state auditor, commissioner of securities and insurance, to be used
  for the purpose of investigation, detection, and prevention of noncompliance, fraud, and abuse under the
  securities and insurance laws.
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                                                      Unofficial Draft Copy
****                                                 As of: 11/09/2024, 02:12:25
69th Legislature 2025                               Drafter: Jameson Walker, ****                                    LC 0103
          (7)         The department may permit the commissioner of internal revenue of the United States or the
  proper officer of any state imposing a tax on the incomes of individuals or the authorized representative of
  either officer to inspect the return of income of any individual or may furnish to the officer or an authorized
  representative an abstract of the return of income of any individual or supply the officer with information
  concerning an item of income contained in a return or disclosed by the report of an investigation of the income
  or return of income of an individual, but the permission may be granted or information furnished only if the
  statutes of the United States or of the other state grant substantially similar privileges to the proper officer of
  this state charged with the administration of this chapter.
          (8)         On written request to the director or a designee of the director, the department shall furnish:
          (a)         to the department of public health and human services information acquired under 15-30-2616,
  pertaining to an applicant for public assistance, reasonably necessary for the prevention and detection of public
  assistance fraud and abuse, provided notice to the applicant has been given;
          (b)         to the department of labor and industry for the purpose of:
          (i)         prevention and detection of fraud and abuse in and eligibility for benefits under the
  unemployment compensation and workers' compensation programs, information on whether a taxpayer who is
  the subject of an ongoing investigation by the department of labor and industry is an employee, an independent
  contractor, or self-employed;
          (ii)        administering the apprenticeship tax credit provided for in 39-6-109, employer and apprentice
  information necessary to implement 15-30-2357, 15-31-173, and 39-6-109; and
          (iii)       administering the annual job growth incentive tax credit provided for in 39-11-404, taxpayer and
  employee information necessary to implement 15-30-2361 and 15-31-175;
          (c)         to the department of fish, wildlife, and parks specific information that is available from income
  tax returns and required under 87-2-102 to establish the residency requirements of an applicant for hunting and
  fishing licenses;
          (d)         to the board of regents information required under 20-26-1111;
          (e)         to the legislative fiscal analyst and the office of budget and program planning individual income
  tax information as provided in 5-12-303, 15-1-106, and 17-7-111. The information provided to the office of
  budget and program planning must be the same as the information provided to the legislative fiscal analyst.
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                                                   Unofficial Draft Copy
****                                              As of: 11/09/2024, 02:12:25
69th Legislature 2025                            Drafter: Jameson Walker, ****                                    LC 0103
          (f)      to the department of transportation farm income information based on the most recent income
  tax return filed by an applicant applying for a refund under 15-70-430, provided that notice to the applicant has
  been given as provided in 15-70-430. The information obtained by the department of transportation is subject to
  the same restrictions on disclosure as are individual income tax returns.
          (g)      to the department of commerce tax information about a taxpayer whose debt is assigned to the
  department of revenue for offset or collection pursuant to the terms of Title 17, chapter 4, part 1. The
  information provided to the department of commerce must be used for the purposes of preventing and detecting
  fraud or abuse and determining eligibility for grants or loans.
          (h)      to the office of the Montana state auditor, commissioner of securities and insurance, for the
  purpose of investigation, detection, and prevention of noncompliance, fraud, and abuse under the securities
  and insurance laws information relating to taxpayer returns, delinquency, and employers’ payroll withholding
  reports. (Terminates June 30, 2025, on occurrence of contingency--sec. 48, Ch. 415, L. 2019; subsections
  (3)(d) and (8)(b)(iii) terminate December 31, 2028--sec. 4, Ch. 391, L. 2023.)
          15-30-2618.     (Effective July 1, 2025, on occurrence of contingency) Confidentiality of tax
  records. (1) Except as provided in 5-12-303, 15-1-106, 17-7-111, and subsections (7) and (8) of this section, in
  accordance with a proper judicial order, or as otherwise provided by law, it is unlawful to divulge or make known
  in any manner:
          (a)      the amount of income or any particulars set forth or disclosed in any individual report or
  individual return required under this chapter or any other information secured in the administration of this
  chapter; or
          (b)      any federal return or federal return information disclosed on any return or report required by
  rule of the department or under this chapter.
          (2)      (a) The officers charged with the custody of the reports and returns may not be required to
  produce them or evidence of anything contained in them in an action or proceeding in a court, except in an
  action or proceeding:
          (i)      to which the department is a party under the provisions of this chapter or any other taxing act;
  or
          (ii)     on behalf of a party to any action or proceedings under the provisions of this chapter or other
                                                               -4-                                                    LC 103
                                                    Unofficial Draft Copy
****                                               As of: 11/09/2024, 02:12:25
69th Legislature 2025                             Drafter: Jameson Walker, ****                                       LC 0103
  taxes when the reports or facts shown by the reports are directly involved in the action or proceedings.
          (b)      The court may require the production of and may admit in evidence only as much of the reports
  or of the facts shown by the reports as are pertinent to the action or proceedings.
          (3)      This section does not prohibit:
          (a)      the delivery to a taxpayer or the taxpayer's authorized representative of a certified copy of any
  return or report filed in connection with the taxpayer's tax;
          (b)      the publication of statistics classified to prevent the identification of particular reports or returns
  and the items of particular reports or returns;
          (c)      the inspection by the attorney general or other legal representative of the state of the report or
  return of any taxpayer who brings an action to set aside or review the tax based on the report or return or
  against whom an action or proceeding has been instituted in accordance with the provisions of 15-30-2630; or
          (d)      the delivery of information to the revenue interim committee relating to the annual job growth
  incentive tax credit as provided in 15-30-2361.
          (4)      Reports and returns must be preserved for at least 3 years and may be preserved until the
  department orders them to be destroyed.
          (5)      Any offense against subsections (1) through (4) is punishable by a fine not exceeding $500. If
  the offender is an officer or employee of the state, the offender must be dismissed from office or employment
  and may not hold any public office or public employment in this state for a period of 1 year after dismissal or, in
  the case of a former officer or employee, for 1 year after conviction.
          (6)      This section may not be construed to prohibit the department from providing taxpayer return
  information and information from employers' payroll withholding reports to:
          (a)      the department of labor and industry to be used for the purpose of investigation and prevention
  of noncompliance, tax evasion, fraud, and abuse under the unemployment insurance laws; or
          (b)      the state fund to be used for the purpose of investigation and prevention of noncompliance,
  fraud, and abuse under the workers' compensation program; or
          (c)      the office of the Montana state auditor, commissioner of securities and insurance, to be used
  for the purpose of investigation, detection, and prevention of noncompliance, fraud, and abuse under the
  securities and insurance laws.
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                                                      Unofficial Draft Copy
****                                                 As of: 11/09/2024, 02:12:25
69th Legislature 2025                               Drafter: Jameson Walker, ****                                    LC 0103
          (7)         The department may permit the commissioner of internal revenue of the United States or the
  proper officer of any state imposing a tax on the incomes of individuals or the authorized representative of
  either officer to inspect the return of income of any individual or may furnish to the officer or an authorized
  representative an abstract of the return of income of any individual or supply the officer with information
  concerning an item of income contained in a return or disclosed by the report of an investigation of the income
  or return of income of an individual, but the permission may be granted or information furnished only if the
  statutes of the United States or of the other state grant substantially similar privileges to the proper officer of
  this state charged with the administration of this chapter.
          (8)         On written request to the director or a designee of the director, the department shall furnish:
          (a)         to the department of public health and human services information acquired under 15-30-2616,
  pertaining to an applicant for public assistance, reasonably necessary for the prevention and detection of public
  assistance fraud and abuse, provided notice to the applicant has been given;
          (b)         to the department of labor and industry for the purpose of:
          (i)         prevention and detection of fraud and abuse in and eligibility for benefits under the
  unemployment compensation and workers' compensation programs, information on whether a taxpayer who is
  the subject of an ongoing investigation by the department of labor and industry is an employee, an independent
  contractor, or self-employed;
          (ii)        administering the apprenticeship tax credit provided for in 39-6-109, employer and apprentice
  information necessary to implement 15-30-2357, 15-31-173, and 39-6-109; and
          (iii)       administering the annual job growth incentive tax credit provided for in 39-11-404, taxpayer and
  employee information necessary to implement 15-30-2361 and 15-31-175;
          (c)         to the department of fish, wildlife, and parks specific information that is available from income
  tax returns and required under 87-2-102 to establish the residency requirements of an applicant for hunting and
  fishing licenses;
          (d)         to the board of regents information required under 20-26-1111;
          (e)         to the legislative fiscal analyst and the office of budget and program planning individual income
  tax information as provided in 5-12-303, 15-1-106, and 17-7-111. The information provided to the office of
  budget and program planning must be the same as the information provided to the legislative fiscal analyst.
                                                                  -6-                                                  LC 103
                                                   Unofficial Draft Copy
****                                              As of: 11/09/2024, 02:12:25
69th Legislature 2025                            Drafter: Jameson Walker, ****                                    LC 0103<