California Consumer Privacy Act to Impact All Companies Doing Business in California
The California Consumer Privacy Act is a comprehensive new consumer protection law that takes effect on January 1, 2020. The CCPA broadens the existing privacy legislation definition to include data elements that were not previously considered personal information. Under the new law a wide range of businesses that handle Californian's personal information will have to comply with new requirements governing their collection, use and sharing of personal information.
If one or more of the following are true businesses must comply: (1) has gross annual revenues in excess of $25 million; (2) buys, receives, or sells the personal information of 50,000 or more consumers, households, or devices; or (3) derives 50 percent or more of annual revenues from selling consumers' personal information. Business subjected to the CCPA regulations must provide notice to consumers before data collection and create procedures for consumers to opt-out, know and delete. Business must respond to requests from consumers in a specified timeframe and once a request is made, they must verify the consumer, and make records.
The CCPA covers three critical areas of Non-public Private Information. The CCPA gives consumers the right to know, the right to delete, and the right to opt-out, and non-discrimination for exercise of consumer rights. The right to know give consumers the right to request what personal information has been collected, as well as what personal information has been sold or otherwise disclosed about them. The right to delete mandated business honor "verifiable" requests to delete consumer personal information. Covered business must provide notice of the right to opt-out of the sale of consumers personal information by providing consumers with a website and phone number that will allow them to opt-out. Finally, businesses are prohibited from discriminating against consumers based on their having exercised rights pursuant to the CCPA.
For business that are covered by the CCPA you must identify the information you are collecting and why you will need to collect such information. In addition, your privacy policy should state the reasons for sharing, selling or disclosing information to other entities and the reasons for doing so. Finally, you must disclose to your consumers their rights relating to choosing to delete information you possess and how they can exercise those rights.
For companies not covered but obtaining personal information from a covered company, we are seeing requests for compliance as well. Thus, non-covered companies are being impacted by association and must put a policy is place to address the new law to satisfy their business partners.
Since the CCPA includes such significant elements, it is in your entities best interest to update your privacy policy whether or not you are mandated to comply with the CCPA.
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Case of the Month
In 1939, fee simple owner E.S. Barnard Company entered into an oil and gas lease with British-American Oil Producing Company that was recorded. The lease required that British-American and successor lessees pay oil royalties to the lessor. In 1957, E.S. Barnard Company dissolved and conveyed its interest in Lot 7, accessors Parcel 045, including the oil and gas lease to its shareholders the Barnards and Pooles. Then in 1978 The Ventura County Tax Assessor asses Lot 7 using two assessor parcel numbers: APN 063-9-190-024 and APN 063-0-190-045. Parcel number 024 tax bill was mailed to Gulf Oil Corporation, the successor lessee for the oil and gas lease. The $12.78 tax bill for Parcel 045 was mailed to Barnard HA Attn Barnard, Austin M.
Austin Barnard then defaulted on the tax bill and the Ventura County Tax Collector sold Lot 7 to the State of California for $12.78. On February 10, 978 the State of California sold Lot 7 to appellants parents, Joseph and Roby Gallegos for $3,000. After Joe Gallegos passed, Ruby Gallegos deeded Lot 7 to appellant.
In 2014 appellant, Dennis Gallegos, received a letter from Aera Energy LLC describing the extent of the oil extraction operation that was to happen on Lot 7. Dennis Gallegos claimed that Aera was "potentially trespassing" and that he was entitled to 5.714 percent of the royalties, as he represented H.A Barnard's Fractional interest. Appellant tentatively settled the dispute with Gary Leiper, trustee of Barnard Oil Trust. Appellant was to receive $12,000 plus 5.174 percent of the royalties, but the agreement required approval from the Ventura County Superior Court. Aera filed a cross-petition to interplead the oil royalties ($177,000+). Then the fractional owner of Barnard Oil Trust, John L. Poole objected to the settlement agreement and filed a petition to determine title and royalty rights.
The trial court declared the case a complex design and appointed a Gas and Oil Expert, J. Nile Kinney. Kinney and the Supreme Court ruled that appellant had no interest in the oil and gas royalties as the tax collector "didn't foreclose upon those rights".
The tax and sale of oil field property presents usual title problems because a gas and oil leasehold is not "real property" but an estate in land measured by duration. An oil and gas lease is a taxable possessory interest because the interest is of infinite duration, and at some point the possessor will terminate and the possession of the property will revert to the owner.
The trial court found that the 1939 oil and gas lease was a restriction of record and was not intended to be sold at the tax sale. Kinney found that at no point was the "surface fee estate ever severed from any portion of the mineral fee estate". This meaning that because the oil and gas leasehold was not foreclosed upon that the taxes were paid by E.S Barnard, his successors, or the oil companies who own the oil and gas lease. The trial court amended the judgement to clarify that upon termination of the oil and gas lease, the oil, gas and hydrocarbon rights would revert to the surface owner.
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Franchise Tax Board Revises 593 Forms for 2020
The State of California requires withholding on the sale of real property unless an exemption applies. The withholding and attendant rules thereto are administered by the California Franchise Tax Board (FTB). Up until now, the reporting has been done through a plethora of different 593 forms.
Beginning January 1st, 2020, the form used for reporting has been revised. This change eliminates Forms 593-C, 593-I, and 593-E, combining them into Form 593. This updated form is required to be submitted to both the Franchise Tax Board and the Seller in the transaction. The Franchise Tax Board also requires all remitters to submit a completed and signed copy of 593 to the FTB even if the seller qualifies for a full or partial real estate holding.
All of the information from form 593-C, 593-I and 593-E can be found in the updated form. The first page of the form combines fields from the previous 593 and 593-C. The second page combines fields from 593-I and 593-E. Finally, the last page combines fields from 593-E and 593. The last changes that the Franchise Tax Board made to the form is to require the name of the preparer and in the event that the transaction is an installment sale, the buyer's signature.
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Upcoming Speaking Engagements & Events
January 8
- Speaking for Ventura County Escrow Association
VCEA Link
January 14 -
Speaking for Tri-County Escrow Association Tri-County EA
January
23 & 24
- Exhibitor for California Receiver Forum Loyola VIII Loyola VIII Link
January 25 -
Speak for Escrow Training Institute Escrow Business Forum ETI Schedule
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