2005 California Revenue and Taxation Code Sections 46401-46407 Article 1. Security for Fee

46401.  (a) The board, whenever it determines it to be necessary to
ensure compliance with this part, may require any person subject to
this part to place with it such security as the board may determine
to be reasonable, taking into account the circumstances of that
person.  Any security in the form of cash, government bonds, or
insured deposits in banks or savings and loan institutions shall be
held by the board in trust to be used solely in the manner provided
by this section.  The board may sell the security at public auction
if it becomes necessary to do so in order to recover any fee or any
amount required to be collected, including any interest or penalty
due.  Notice of the sale shall be served upon the person who placed
the security personally or by mail.
   (b) If service is made by mail, service shall be addressed to the
person at his or her address as it appears in the records of the
board.  Service shall be made at least 30 days prior to the sale in
the case of personal service, and at least 40 days prior to the sale
in the case of service by mail.  Security in the form of a bearer
bond issued by the United States or the State of California which has
a prevailing market price may, however, be sold by the board at
private sale at a price not lower than the prevailing market price
thereof.  Upon any sale, any surplus above the amounts due shall be
returned to the person who placed the security.
46402.  If any feepayer is delinquent in the payment of any
obligations imposed by this part, or in the event a determination has
been made against the feepayer which remains unpaid, the board may,
not later than three years after the payment becomes delinquent, or
the last recording or filing of a notice of state tax lien under
Section 7171 of the Government Code, give notice thereof, personally
or by first-class mail, to all persons, including any officer or
department of the state or any political subdivision or agency of the
state, having in their possession or under their control any credits
or other personal property belonging to the feepayer, or owing any
debts to the feepayer.  In the case of any state officer, department,
or agency, the notice shall be given to the officer, department, or
agency prior to the time it presents the claim of the delinquent
taxpayer to the Controller.
46403.  After receiving the notice, the person so notified shall
neither transfer nor make any other disposition of the credits, other
personal property, or debts in their possession or under their
control at the time they receive the notice until the board consents
to a transfer or disposition or until 60 days elapse after the
receipt of the notice, whichever period expires first.
46404.  All persons so notified shall immediately, after receipt of
the notice, advise the board of all credits, other personal property,
or debts in their possession, under their control, or owing by them.
  If the notice seeks to prevent the transfer or other disposition of
a deposit in a bank or other credits or personal property in the
possession or under the control of a bank, the notice, to be
effective, shall state the amount, interest, and penalty due from the
person and shall be delivered or mailed to the branch or office of
the bank at which the deposit is carried at which the credits or
personal property is held.  Notwithstanding any other provision, with
respect to a deposit in a bank or other credits or personal property
in the possession or under the control of a bank, the notice shall
only be effective with respect to an amount not in excess of the
amount, interest, and penalty due from the person.
46405.  If, during the effective period of the notice to withhold,
any person so notified makes any transfer or disposition of the
property or debts required to be withheld, to the extent of the value
of the property or the amount of the debts thus transferred or paid,
he or she shall be liable to the state for any indebtedness due
under this part from the person with respect to whose obligation the
notice was given, if solely by reason of that transfer or
disposition, the state is unable to recover the indebtedness of the
person with respect to whose obligation the notice was given.
46406.  (a) The board may, by notice of levy served personally or by
first-class mail, require all persons having in their possession, or
under their control, any payments, credits other than payments, or
other personal property belonging to a feepayer or other person
liable for any amount under this part to withhold from those credits
or other personal property the amount of any fee, interest, or
penalties due from that feepayer or other person, or the amount of
any liability incurred by them under this part, and to transmit the
amount withheld to the board at the time it may designate.  The
notice of levy shall have the same effect as a levy pursuant to a
writ of execution except for the continuing effect of the levy, as
provided in subdivision (b).
   (b) The person served shall continue to withhold pursuant to the
notice of levy until the amount specified in the notice, including
accrued interest, has been paid in full, until the notice is
withdrawn, or until one year from the date the notice is received,
whichever occurs first.
   (c) The amount required to be withheld is the lesser of the
following:
   (1) The amount due stated on the notice.
   (2) The sum of both of the following:
   (A) The amount of the payments, credits other than payments, or
personal property described above and under the person's possession
or control when the notice of levy is served on the person.
   (B) The amount of each payment that becomes due following service
of the notice of levy on the person and prior to the expiration of
the levy.
   (d) For the purposes of this section, the term "payments" does not
include earnings as that term is defined in subdivision (a) of
Section 706.011 of the Code of Civil Procedure or funds in a deposit
account as defined in paragraph (29) of subdivision (a) of Section
9102 of the Commercial Code.  The term "payments" does include any of
the following:
   (1) Payments due for services of independent contractors,
dividends, rents, royalties, residuals, patent rights, or mineral or
other natural rights.
   (2) Payments or credits due or becoming due periodically as a
result of an enforceable obligation to the feepayer or other person
liable for the fee.
   (3) Any other payments or credits due or becoming due the feepayer
or other person liable as the result of written or oral contracts
for services or sales whether denominated as wages, salary,
commission, bonus, or otherwise.
   (e) In the case of a financial institution, to be effective, the
notice shall state the amount due from the feepayer and shall be
delivered or mailed to the branch or office of the financial
institution where the credits or other property is held, unless
another branch or office is designated by the financial institution
to receive the notice.
46407.  (a) Notwithstanding Article 7 (commencing with Section
706.151) of Chapter 5 of Title 9 of Part 2 of the Code of Civil
Procedure, if the board determines, upon receiving information from a
fee payer or other person liable for any amount under this part,
that the person's employer withheld earnings for taxes pursuant to
Section 46406 and failed to remit the withheld earnings to the board,
the employer shall be liable for the amount not remitted.  The board'
s determination shall be based on payroll documents or other
substantiating evidence furnished by the person liable for the tax.
   (b) Upon its determination, the board shall mail notice to the
employer at its last known address that upon failure to remit the
withheld earnings to the board within 15 days of the date of its
notice to the employer, the employer shall be liable for that amount
which was withheld and not remitted.
   (c) If the employer fails to remit the amount withheld to the
board upon notice, that amount for which the employer is liable shall
be determined, collected, and paid as though it were a tax
deficiency.  The amount may be assessed at any time prior to seven
years from the first day that the unremitted amount, in the
aggregate, was first withheld.  Interest shall accrue on that amount
from the first day that the unremitted amount, in the aggregate, was
first withheld.
   (d) When the determination against the employer is final and due
and payable, the person's account shall be immediately credited with
an amount equal to that determined amount as though it were a payment
received by the board on the first date that the unremitted amount,
in the aggregate, was first withheld by the employer.
   (e) Collection against the person liable for the tax is stayed for
both the following amount and period:
   (1) An amount equal to the amount determined by the board under
subdivision (a).
   (2) The earlier of the time the credit is applied to the person's
account pursuant to subdivision (d) or the determination against the
employer is withdrawn or revised and the person is notified by the
board thereof.
   (f) If under this section an amount that was withheld and not
remitted to the board is final and due and payable by the employer
and credited to the person's account, this remedy shall be the
exclusive remedy for the person to recover that amount from the
employer.
   (g) This section shall apply to determinations made by the board
on or after the effective date of the act adding this section.