Bill Text: CA SB1496 | 2021-2022 | Regular Session | Chaptered

California Senate Bill 1496 (Prior Session Legislation)

Bill Title: Taxation: tax, fee, and surcharge administration: insurance tax rates.

Spectrum: Committee Bill

Status: (Passed) 2022-09-22 - Chaptered by Secretary of State. Chapter 474, Statutes of 2022. [SB1496 Detail]

Download: California-2021-SB1496-Chaptered.html

Senate Bill No. 1496

CHAPTER 474

An act to amend Section 830.11 of the Penal Code, and to amend Sections 6295, 6592, 6593, 6593.5, 6703, 6901, 6981, 7093.6, 7097, 7657, 7658, 8126, 8191, 8877, 8878, 8957, 9151, 9196, 9275, 9278, 12221, 30282, 30283, 30315, 30361, 30421, 30459.15, 30459.5, 32471.5, 34013, 34016, 34018, 38452, 38453, 38503, 38601, 38631, 40102, 40103, 40111, 40121, 40155, 40215, 41095, 41096, 41097, 41100, 41107, 41123.5, 41171.5, 41175, 43157, 43158, 43444.2, 43451, 43491, 43526, 45155, 45156, 45605, 45651, 45801, 45871, 46156, 46157, 46406, 46501, 46551, 46626, 46628, 50112.2, 50112.3, 50136, 50139, 50151, 50156.15, 50156.18, 55044, 55046.5, 55161, 55162, 55205, 55221, 55281, 55332.5, 55336, 60209, 60211, 60407, 60521, 60581, 60633.2, and 60637 of, to add Sections 6459.5, 7656.5, 8754.5, 30185.5, 34013.1, 38405.5, 40065.5, 41054.5, 43154.5, 45152.5, 46153.5, 50111.5, 55041.5, and 60208.5 to, and to repeal Section 19559 of, the Revenue and Taxation Code, relating to taxation.

[ Approved by Governor September 22, 2022. Filed with Secretary of State September 22, 2022. ]

LEGISLATIVE COUNSEL'S DIGEST

SB 1496, Committee on Governance and Finance. Taxation: tax, fee, and surcharge administration: insurance tax rates.

(1) The California Department of Tax and Fee Administration (CDTFA) administers various taxes, fees, and surcharges, including, among others, the Sales and Use Tax Law, the Motor Vehicle Fuel Tax Law, the Use Fuel Tax Law, the Cigarette and Tobacco Products Tax Law, the Timber Yield Tax Law, the Energy Resources Surcharge Law, the Emergency Telephone Users Surcharge Act, the Hazardous Substances Tax Law, the Integrated Waste Management Fee Law, the Oil Spill Response, Prevention, and Administration Fees Law, the Underground Storage Tank Maintenance Fee Law, the Diesel Fuel Tax Law, and various taxes and fees collected in accordance with the Fee Collections Procedures Law.

Existing law, the California Emergency Services Act, authorizes the Governor to proclaim a state of emergency when specified conditions of disaster or extreme peril to the safety of persons and property exist, and authorizes the Governor to exercise certain powers in response to that emergency, including, but not limited to, suspending specified statutes, ordinances, orders, regulations, or rules.

This bill would authorize the CDTFA, if the Governor issues a state of emergency proclamation, to extend the time, for a period not to exceed 3 months, for making any report or return or paying any tax, fee, or surcharge, as applicable, required under the laws administered by the department specified above for any person in an area identified in the state of emergency proclamation. The bill would additionally authorize the CDTFA to grant relief from specified penalties and interest under those laws during the period the state of emergency proclamation is effective. The bill would, however, authorize the CDTFA to make the extension or grant the relief only during the first 12 months following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less.

(2) Existing law, for purposes of the laws administered by the CDTFA described above, requires the CDTFA to refund the excess balance of a tax, fee, or surcharge, penalty, or interest that has been paid more than once or has been erroneously or illegally collected or computed, if the CDTFA makes a specified determination. Under those laws, if the amount is in excess of $50,000, or $15,000 for specified amounts under the Integrated Waste Management Fee Law, the CDTFA is required to make the determination public record 10 days prior to the effective date of the determination.

This bill would instead require the CDTFA to make the determination public record 10 days after the effective date of the determination. The bill, for purposes of the Integrated Waste Management Fee Law, would increase the amount for which the CDTFA is required to make the determination public record from $15,000 to $50,000.

(3) The Sales and Use Tax Law, the Use Fuel Tax Law, the Cigarette and Tobacco Products Tax Law, the Timber Yield Tax Law, the Emergency Telephone Users Surcharge Act, the Hazardous Substances Tax Law, the Integrated Waste Management Fee Law, the Oil Spill Response, Prevention, and Administration Fees Law, the Underground Storage Tank Maintenance Fee Law, the Diesel Fuel Tax Law, and the Fee Collections Procedures Law authorize the CDTFA to require persons, by notice of levy, to withhold credits or personal property belonging to a retailer or other person liable for taxes, fees, or surcharges, or penalties or interest, under those laws. Existing law authorizes the CDTFA to serve the notices of levy personally or by first-class mail.

This bill would additionally authorize the CDTFA to serve a notice of levy by electronic transmission or other electronic technology.

(4) The Sales and Use Tax Law, the Use Fuel Tax Law, the Cigarette and Tobacco Products Tax Law, the Alcoholic Beverage Tax Law, the Emergency Telephone Users Surcharge Act, the Oil Spill Response, Prevention, and Administration Fees Law, the Underground Storage Tank Maintenance Fee Law, the Diesel Fuel Tax Law, and the Fee Collections Procedures Law, until January 1, 2023, authorize the executive director and chief counsel of the Board of Equalization or the director of the CDTFA, as applicable, to compromise on a final tax, surcharge, or fee liability, as applicable, where the reduction of the tax, surcharge, or fee is $7,500 or less, as provided, regardless of whether the liabilities are generated from a business that has been discontinued or transferred or where the taxpayer or feepayer no longer has a controlling interest or association with a similar business as the transferred or discontinued business. After January 1, 2023, those laws authorize the director to accept an offer in compromise on a final tax, surcharge, or fee liability only if the business has been discontinued or transferred or whether the taxpayer or feepayer has a controlling interest or association with a similar business as the transferred or discontinued business. Under these laws, a taxpayer or feepayer is guilty of a felony if the taxpayer or feepayer conceals specified property or receives, withholds, destroys, mutilates, or falsifies specified items or makes a false statement related to the offer in compromise, as specified.

This bill would instead authorize the executive director and chief counsel or director, as applicable, to compromise all final tax, surcharge, or fee liability, as applicable, regardless of the amount. The bill would extend the repeal date for the above provisions regarding an offer in compromise for a final tax, surcharge, or fee liability regardless of whether the business has been discontinued or transferred or whether the taxpayer or feepayer has a controlling interest or association, as specified, to January 1, 2028. The bill, by extending the repeal date, would expand the scope of an existing crime, thereby imposing a state-mandated local program.

(5) The Sales and Use Tax Law, the Use Fuel Tax Law, the Cigarette and Tobacco Products Tax Law, the Energy Resources Surcharge Law, the Emergency Telephone Users Surcharge Act, the Hazardous Substances Tax Law, the Integrated Waste Management Fee Law, the Oil Spill Response, Prevention, and Administration Fees Law, the Underground Storage Tank Maintenance Fee Law, the Diesel Fuel Tax Law, and the Fee Collections Procedures Law authorize the CDTFA to release or subordinate a lien if the CDTFA makes specified determinations, including that the release or subordination will be in the best interest of the state and the taxpayer.

This bill would additionally authorize the CDTFA to release or subordinate a lien if the CDTFA determines that the release or subordination will be in the best interest of the state and another person that is not the taxpayer but that holds an interest with the taxpayer in the property that is subject to the lien.

(6) Under the Sales and Use Tax Law, the CDTFA, in its discretion, may relieve all or any part of the interest imposed on a person by that law under certain circumstances, including where failure to pay use tax on a vehicle or vessel registered with the Department of Motor Vehicles was the direct result of an error by that department in calculating the use tax.

This bill would instead authorize relief where failure to pay sales or use tax was the direct result of an error or delay by a state agency in collecting sales or use tax on behalf of the CDTFA.

(7) Under the Fee Collections Procedures Law, if at any time within 3 years after any person is delinquent in the payment of any amount required to be paid, as specified, or within 10 years after the last recording or filing of a notice of state tax lien, the CDTFA or its authorized representative is authorized to issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the state, as specified. Existing law requires the warrant to be directed to any sheriff or marshal and authorizes the department to pay or advance to the sheriff or marshal the same fees, commissions, and expenses for their services as are provided by law for similar services pursuant to a writ of execution.

This bill would additionally require the warrant to be directed to, and would authorize the CDTFA to pay or advance fees, commissions, and expenses to, the Department of the California Highway Patrol.

(8) The Sales and Use Tax Law, with respect to specified vehicles sold at retail by a licensed dealer, as defined, requires the dealer to pay the applicable sales tax and use tax under the Transactions and Use Tax Law to the Department of Motor Vehicles acting for and on behalf of the CDTFA, as specified. That law requires specified newly licensed dealers to comply beginning January 1, 2021, and all other dealers to comply by January 1, 2023.

This bill would authorize the CDTFA to delay the compliance schedule for specified dealers that are required to comply by January 1, 2023, to January 1, 2026, if certain conditions are met.

(9) This bill would also make various technical changes to each of these laws by updating references to the State Board of Equalization to instead refer to the CDTFA.

(10) Existing law authorized the Franchise Tax Board, prior to December 31, 2005, to disclose returns and return information to federal agencies, as provided.

This bill would repeal that provision.

(11) Existing law defines who is a peace officer and specifies the powers of peace officers. Under existing law, specified categories of people, including a person employed by the State Board of Equalization, Investigations Division, are not peace officers but are authorized to exercise the powers of arrest of a peace officer and the power to serve warrants, as specified, if they receive a course in the exercise of those powers.

This bill would remove persons employed by the State Board of Equalization, Investigations Division from the categories of people who are not peace officers but are authorized to exercise the powers of arrest of a peace officer and the power to serve warrants, as specified. The bill would add to the classification of persons who are not peace officers but who are authorized to exercise the powers of arrest of a peace officer and the power to serve warrants a person employed by the CDTFA who is designated by the department’s director, provided that the person’s primary duty is the enforcement of laws administered by the department.

(12) The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA), an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. AUMA authorizes the Legislature to amend the act to further the purposes and intent of the act with a ²/₃ vote of the membership of each house of the Legislature, except as provided.

Existing law authorizes any peace officer or employee of the State Board of Equalization who is granted limited peace officer status to enter any place, as described, to conduct inspections. Existing law authorizes the CDTFA or a law enforcement agency to seize cannabis or cannabis products that a licensee or any other person possesses, stores, owns, or has made a retail sale of, without evidence of tax payment or not contained in secure packaging. Existing law provides that seized cannabis or cannabis products shall be deemed forfeited within 7 days, as specified.

This bill would, commencing January 1, 2023, remove the authority of the CDTFA or a law enforcement agency to seize cannabis or cannabis products that are without evidence of tax payment. The bill would continue to authorize the CDTFA or a law enforcement agency to seize cannabis or cannabis products not contained in secure packaging. The bill would additionally authorize the CDTFA or a law enforcement to seize cannabis or cannabis products possessed, stored, owned, or sold by an unlicensed person or that were not reported in the track and trace system, as specified. The bill would provide that seized cannabis or cannabis products are deemed forfeited, as specified. The bill would make technical changes by updating references to the Board of Equalization to instead refer to the CDTFA.

Existing law requires the CDTFA to administer and collect specified cannabis taxes according to specified procedures. Existing law requires certain persons whose estimated fee liability under specified provisions averages $20,000 or more per month remit amounts due by electronic funds transfer, as specified. Existing law excludes, until January 1, 2022, cannabis licensees and a person required to pay or collect specified cannabis taxes from this requirement.

This bill would instead apply the above-described exclusion from on or after January 1, 2022.

Existing law also requires persons required to remit by electronic funds transfer but remit fees by other means to pay a penalty of 10% of the fees incorrectly remitted. Existing law provides that cannabis licensees that failed to remit amounts due by means of electronic funds transfer on and after January 1, 2022, and before a specified operative date, are not subject to or are relieved of any penalties for that failure to remit amounts due by electronic funds transfer.

This bill would extend the relief from penalty due to the failure to remit amounts due by electronic funds transfer until before January 1, 2023.

Under the Sales and Use Tax Law and Fee Collection Procedures Law, it is unlawful for the CDTFA and specified persons and state agencies, as applicable, to make known in any manner certain feepayer or taxpayer information, permit certain information to be seen or examined, except as provided, or retain certain information, as applicable.

This bill would, notwithstanding those prohibitions, require the CDTFA to disclose certain information of a person registered with the CDTFA to collect and remit the cannabis excise tax. The bill would require the CDTFA to disclose to state and local law enforcement agencies, upon written request, any and all information collected under the Sales and Use Tax Law and collected by the CDTFA, as specified, regarding a person required to collect and remit the cannabis excise tax. The bill would require state and local enforcement agencies that receive that information to access and use the information only to the extent necessary to carry out the functions and duties of the agency, among other things. The bill would also authorize the CDTFA to share information with a licensing authority pursuant to a memorandum of understanding, as deemed necessary by the department.

This bill would declare that it furthers the purposes and intent of AUMA.

(13) Existing insurance tax laws imposes a tax upon insurers based upon a percentage of gross premiums, as specified. Those laws provide that in the case of an insurer not transacting title insurance in this state, the basis of the tax is, in respect of each year, the amount of gross premiums, less return premiums, received in that year by the insurer regarding its business in this state.

This bill would provide that for annuity policies or contracts that constitute qualified funding assets, as described, the gross premiums tax rate for premiums received for those annuity policies and contracts is 0% for premiums received on or after January 1, 2023.

(14) This bill would incorporate additional changes to Section 830.11 of the Penal Code proposed by SB 1498 to be operative only if this bill and SB 1498 are enacted and this bill is enacted last.

(15) This bill would incorporate additional changes to Section 41100 of the Revenue and Taxation Code proposed by SB 1496 to be operative only if this bill and SB 1496 are enacted and this bill is enacted last.

(16) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

(17) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: YES

The people of the State of California do enact as follows:

SECTION 1.

Section 830.11 of the Penal Code is amended to read:

830.11.

(a) The following persons are not peace officers but may exercise the powers of arrest of a peace officer as specified in Section 836 and the power to serve warrants as specified in Sections 1523 and 1530 during the course and within the scope of their employment, if they receive a course in the exercise of those powers pursuant to Section 832. The authority and powers of the persons designated under this section extend to any place in the state:

(1) A person employed by the Department of Financial Protection and Innovation designated by the Commissioner of Financial Protection and Innovation, provided that the person’s primary duty is the enforcement of, and investigations relating to, the provisions of law administered by the Commissioner of Business Oversight.

(2) A person employed by the Bureau of Real Estate designated by the Real Estate Commissioner, provided that the person’s primary duty is the enforcement of the laws set forth in Part 1 (commencing with Section 10000) and Part 2 (commencing with Section 11000) of Division 4 of the Business and Professions Code. The Real Estate Commissioner may designate a person under this section who, at the time of their designation, is assigned to the Special Investigations Unit, internally known as the Crisis Response Team.

(3) A person employed by the State Lands Commission designated by the executive officer, provided that the person’s primary duty is the enforcement of the law relating to the duties of the State Lands Commission.

(4) A person employed as an investigator of the Investigations Bureau of the Department of Insurance, who is designated by the Chief of the Investigations Bureau, provided that the person’s primary duty is the enforcement of the Insurance Code and other laws relating to persons and businesses, licensed and unlicensed by the Department of Insurance, who are engaged in the business of insurance.

(5) A person employed as an investigator or investigator supervisor by the Public Utilities Commission, who is designated by the commission’s executive director and approved by the commission, provided that the person’s primary duty is the enforcement of the law as that duty is set forth in Section 308.5 of the Public Utilities Code.

(6) (A) A person employed by the California Department of Tax and Fee Administration, who is designated by the department’s director, provided that the person’s primary duty is the enforcement of laws administered by the California Department of Tax and Fee Administration.

(B) A person designated pursuant to this paragraph is not entitled to peace officer retirement benefits.

(7) A person employed by the Department of Food and Agriculture and designated by the Secretary of Food and Agriculture as an investigator, investigator supervisor, or investigator manager, provided that the person’s primary duty is enforcement of, and investigations relating to, the Food and Agricultural Code or Division 5 (commencing with Section 12001) of the Business and Professions Code.

(8) The Inspector General and those employees of the Office of the Inspector General designated by the Inspector General, provided that the person’s primary duty is the enforcement of the law relating to the duties of the Office of the Inspector General.

(9) A person employed by the Department of Cannabis Control and designated by the director of the department as an investigator, investigator supervisor, or investigator manager, provided that the person’s primary duty is enforcement of, and investigations relating to, Division 10 (commencing with Section 26000) of the Business and Professions Code. This section shall apply to only those investigator positions occupied by persons previously designated by the Secretary of the Department of Food and Agriculture as an investigator, investigator supervisor, or investigative manager whose primary duty was to enforce Division 10 (commencing with Section 26000) of the Business and Professions Code.

(b) Notwithstanding any other law, a person designated pursuant to this section may not carry a firearm.

(c) A person designated pursuant to this section shall be included as a “peace officer of the state” under paragraph (2) of subdivision (c) of Section 11105 for the purpose of receiving state summary criminal history information and shall be furnished that information on the same basis as other peace officers designated in paragraph (2) of subdivision (c) of Section 11105.

SEC. 1.5.

Section 830.11 of the Penal Code is amended to read:

830.11.

(B) A person designated pursuant to this paragraph is not entitled to peace officer retirement benefits.

(b) Notwithstanding any other law, a person designated pursuant to this section may not carry a firearm.

SEC. 2.

Section 6295 of the Revenue and Taxation Code is amended to read:

6295.

(a) (1) When a motor vehicle required to be registered under the Vehicle Code, except for a recreational vehicle that is either truck-mounted, permanently towable on the highways without a permit or a park trailer, as these terms are used in Section 18010 of the Health and Safety Code, is sold at retail by a dealer holding a license issued pursuant to Chapter 4 (commencing with Section 11700) of Division 5 of the Vehicle Code, the dealer shall pay the applicable sales tax and any applicable use tax due under the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2) to the Department of Motor Vehicles acting for and on behalf of the California Department of Tax and Fee Administration pursuant to Sections 4456 and 4750.6 of the Vehicle Code.

(2) The amendments to this subdivision made by the act adding this paragraph do not constitute a change in, but are declaratory of, existing law.

(b) If the dealer makes an application to the Department of Motor Vehicles that is not timely, and is subject to penalty because of delinquency in effecting registration or transfer of registration of the vehicle, the dealer shall also be liable for penalty as specified in Section 6591, but no interest shall accrue.

(c) Application to the Department of Motor Vehicles by the dealer shall not relieve the dealer of the obligation to file a return with the California Department of Tax and Fee Administration under Section 6452. The dealer shall file a return as specified in Section 6453.

(d) (1) If the dealer fails to make an application to the Department of Motor Vehicles, fails to pay the amount of sales or use tax due, or fails to timely file a return with the California Department of Tax and Fee Administration under Section 6452, interest and penalties shall apply with respect to the unpaid amount as provided in Chapter 5 (commencing with Section 6451).

(2) The amendments to this section made by the act adding this subdivision do not constitute a change in, but are declaratory of, existing law.

(e) For purposes of this section, the following shall apply:

(1) “Dealer” shall not include a franchisee as defined in Section 331.1 of the Vehicle Code, a franchisee of a recreational vehicle franchise as defined in Section 331.3, a manufacturer or remanufacturer holding a license issued pursuant to Chapter 4 (commencing with Section 11700) of Division 5 of the Vehicle Code, an automobile dismantler holding a license and certificate issued pursuant to Chapter 3 (commencing with Section 11500) of Division 5 of the Vehicle Code, or a lessor-retailer holding a license issued pursuant to Chapter 3.5 (commencing with Section 11600) of Division 5 of the Vehicle Code, and subject to the provisions of Section 11615.5 of the Vehicle Code.

(2) “Newly licensed dealer” means a dealer who was originally licensed by the Department of Motor Vehicles on or after January 1, 2019.

(f) The Department of Motor Vehicles shall, through the adoption of regulations, establish any additional requirements for the implementation of this section.

(g) (1) Subject to paragraph (2), this section shall apply to sales of vehicles occurring on and after January 1, 2021.

(2) Based upon operational needs to effectively enforce the collection of taxes pursuant to this section, the Department of Motor Vehicles may establish the following compliance schedule for this section:

(A) Newly licensed dealers, dealers whose seller’s permit was reinstated within the last two years, and dealers with a previous finding of underreporting within the last two years shall comply beginning January 1, 2021.

(B) Except as provided in paragraph (3), all other dealers shall comply by January 1, 2023.

(3) Based upon operational needs to effectively enforce the collection of taxes pursuant to this section, the California Department of Tax and Fee Administration, in consultation with the Department of Motor Vehicles, may delay the compliance schedule set forth in subparagraph (B) of paragraph (2) to no later than January 1, 2026, for dealers that made more than 300 retail vehicle sales in the previous calendar year and are not subject to the compliance schedule set forth in subparagraph (A) of paragraph (2).

SEC. 3.

Section 6459.5 is added to the Revenue and Taxation Code, to read:

6459.5.

(a) Subject to subdivision (c), if the Governor issues a state of emergency proclamation, the department may extend the time, for a period not to exceed three months, for making any report or return or paying any tax required under this part for any person in an area identified in the state of emergency proclamation.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

(c) The department may make the extension in subdivision (a) only during the first 12 months following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less.

SEC. 4.

Section 6592 of the Revenue and Taxation Code is amended to read:

6592.

(a) (1) If the department finds that a person’s failure to make a timely return or payment is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person shall be relieved of the penalties provided by Sections 6452.05, 6476, 6477, 6479.3, 6480.4, 6511, 6565, 6591, 7051.2, 7073, and 7074.

(2) If the department finds, with respect to the information return required by Section 6452.05, that a person’s failure to accurately disclose information is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person shall be relieved of the relevant penalty provided by Section 6591.3.

(b) Except as provided in subdivisions (c) and (d), a person seeking to be relieved of the penalty shall file with the department a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

(c) (1) Subject to paragraph (2), the department may grant relief of the penalty for any person in an area identified in a state of emergency proclamation made by the Governor for the period the state of emergency proclamation is effective, regardless of whether the person has filed a statement with the department pursuant to subdivision (b).

(2) The department may grant the relief in paragraph (1) only during the first 12 months following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less.

(d) The department shall establish criteria that provides for efficient resolution of requests for relief pursuant to this section.

SEC. 5.

Section 6593 of the Revenue and Taxation Code is amended to read:

6593.

(a) If the department finds that a person’s failure to make a timely return or payment was due to a disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the interest provided by Sections 6459, 6480.4, 6480.8, 6513, 6591, and 6592.5.

(b) Except as provided in subdivision (c), a person seeking to be relieved of the interest shall file with the department a statement under penalty of perjury setting forth the facts upon which that person bases the claim for relief.

(c) (1) Subject to paragraph (2), the department may grant relief of the interest for any person in an area identified in a state of emergency proclamation made by the Governor for the period the state of emergency proclamation is effective, regardless of whether the person has filed a statement with the department pursuant to subdivision (b).

SEC. 6.

Section 6593.5 of the Revenue and Taxation Code is amended to read:

6593.5.

(a) The department, in its discretion, may relieve all or any part of the interest imposed on a person by this part under the following circumstances:

(1) Where the failure to pay tax is due in whole or in part to an unreasonable error or delay by an employee of the department acting in their official capacity.

(2) Where failure to pay sales or use tax was the direct result of an error or delay by a state agency that collects the tax on behalf of the California Department of Tax and Fee Administration.

(b) For purposes of this section, an error or delay shall be deemed to have occurred only if no significant aspect of the error or delay is attributable to an act of, or a failure to act by, the taxpayer.

(c) Any person seeking relief under this section shall file with the department a statement under penalty of perjury setting forth the facts on which the claim for relief is based and any other information which the department may require.

(d) The department may grant relief only for interest imposed on tax liabilities that arise during taxable periods commencing on or after July 1, 1999.

SEC. 7.

Section 6703 of the Revenue and Taxation Code is amended to read:

6703.

(a) Subject to the limitations in subdivisions (b) and (c), the department may by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any credits or other personal property belonging to a retailer or other person liable for any amount under this part to withhold from such credits or other personal property the amount of any tax, interest, or penalties due from such retailer or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the department at such times as it may designate. The notice of levy shall have the same effect as a levy pursuant to a writ of execution.

(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.

(1) The amount due stated on the notice.

(2) The amount of each payment due or becoming due to the retailer or other person liable during the period 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, mineral or other natural rights.

(2) Payments or credits due or becoming due periodically as a result of an enforceable obligation to the retailer or other person liable for the tax.

(3) Any other payments or credits due or becoming due the retailer 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 taxpayer and shall be delivered, mailed, or served by electronic transmission or other electronic technology 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.

SEC. 8.

Section 6901 of the Revenue and Taxation Code is amended to read:

6901.

(a) If the department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in the records of the department and shall certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid. The excess amount collected or paid shall be credited by the department on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors, if a determination by the department is made in any of the following cases:

(1) Any amount of tax, interest, or penalty was not required to be paid.

(2) Any amount of prepayment of sales tax, interest, or penalty paid pursuant to Article 1.5 (commencing with Section 6480) of Chapter 5 was not required to be paid.

(3) Any amount that is approved as a settlement pursuant to Section 7093.5.

(b) Any overpayment of the use tax by a purchaser to a retailer who is required to collect the tax and who gives the purchaser a receipt therefor pursuant to Article 1 (commencing with Section 6201) of Chapter 3 shall be credited or refunded by the state to the purchaser. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 9.

Section 6981 of the Revenue and Taxation Code is amended to read:

6981.

If any amount has been illegally determined either by the person filing the return or by the department, the department shall set forth that fact in its records, certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made, and authorize the cancellation of the amount upon the records of the department. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 10.

Section 7093.6 of the Revenue and Taxation Code, as amended by Section 1 of Chapter 272 of the Statutes of 2017, is amended to read:

7093.6.

(a) Beginning January 1, 2003, the director of the department, or their delegates, may compromise any final tax liability.

(b) For purposes of this section, “a final tax liability” means any final tax liability arising under Part 1 (commencing with Section 6001), Part 1.5 (commencing with Section 7200), Part 1.6 (commencing with Section 7251), and Part 1.7 (commencing with Section 7280) or related interest, additions to tax, penalties, or other amounts assessed under this part.

(c) (1) Offers in compromise shall be considered only for liabilities that were generated from a business that has been discontinued or transferred, where the taxpayer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(A) That part of a final tax liability, including related interest, additions to tax, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the taxpayer collected sales tax reimbursement or use tax from the purchaser or other person and which was determined against the taxpayer under Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511), and Article 5 (commencing with Section 6561) of Chapter 5.

(B) A final tax liability, including related interest, additions to tax, penalties, or other amounts assessed under this part, arising under Article 7 (commencing with Section 6811) of Chapter 6.

(C) That part of a final tax liability for use tax, including related interest, additions to tax, penalties, or other amounts assessed under this part, determined under Article 2 (commencing with Section 6481), Article 3 (commencing with Section 6511), and Article 5 (commencing with Section 6561) of Chapter 5, against a taxpayer who is a consumer that is not required to hold a permit under Section 6066.

(3) A qualified final tax liability may not be compromised with any of the following:

(A) A taxpayer who previously received a compromise under paragraph (2) for a liability, or a part thereof, arising from a transaction or transactions that are substantially similar to the transaction or transactions attributable to the liability for which the taxpayer is making the offer.

(B) A business that was transferred by a taxpayer who previously received a compromise under paragraph (2) and who has a controlling interest or association with the transferred business, when the liability for which the offer is made is attributable to a transaction or transactions substantially similar to the transaction or transactions for which the taxpayer’s liability was previously compromised.

(C) A business in which a taxpayer who previously received a compromise under paragraph (2) has a controlling interest or association with a similar type of business for which the taxpayer received the compromise, when the liability of the business making the offer arose from a transaction or transactions substantially similar to the transaction or transactions for which the taxpayer’s liability was previously compromised.

(d) The department may, in its discretion, enter into a written agreement that permits the taxpayer to pay the compromise in installments for a period not exceeding one year. The agreement may provide that the installments shall be paid by electronic funds transfers or any other means to facilitate the payment of each installment.

(e) A taxpayer that has received a compromise under paragraph (2) of subdivision (c) may be required to enter into any collateral agreement that is deemed necessary for the protection of the interests of the state. A collateral agreement may include a provision that allows the department to reestablish the liability, or any portion thereof, if the taxpayer has sufficient annual income during the succeeding five-year period. The department shall establish criteria for determining “sufficient annual income” for purposes of this subdivision.

(f) A taxpayer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required sales and use tax returns for a five-year period from the date the liability is compromised, or until the taxpayer is no longer required to file sales and use tax returns, whichever period is earlier.

(g) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(B) The taxpayer does not have reasonable prospects of acquiring increased income or assets that would enable the taxpayer to satisfy a greater amount of the liability than the amount offered, within a reasonable period of time.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(h) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final tax liability shall not be subject to administrative appeal or judicial review.

(i) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the taxpayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the taxpayer.

(j) When more than one taxpayer is liable for the debt, such as with spouses or partnerships or other business combinations, the acceptance of an offer in compromise from one liable taxpayer shall not relieve the other taxpayers from paying the entire liability. However, the amount of the liability shall be reduced by the amount of the accepted offer.

(k) Whenever a compromise of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 7056. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(l) A compromise made under this section may be rescinded, all compromised liabilities may be reestablished (without regard to any statute of limitations that otherwise may be applicable), and no portion of the amount offered in compromise refunded, if either of the following occurs:

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record, or made a false statement, relating to the estate or financial condition of the taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(m) A person who, in connection with an offer or compromise under this section, or offer of that compromise to enter into that agreement, willfully does either of the following shall be guilty of a felony and, upon conviction, shall be fined not more than fifty thousand dollars ($50,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both, together with the costs of investigation and prosecution:

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(2) Receives, withholds, destroys, mutilates, or falsifies a book, document, or record, or makes a false statement, relating to the estate or financial condition of the taxpayer or other person liable in respect of the tax.

(n) For purposes of this section, “person” means the taxpayer, a member of the taxpayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the taxpayer, or another corporation or entity owned or controlled by the taxpayer, directly or indirectly, or that owns or controls the taxpayer, directly or indirectly.

(o) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 11.

Section 7093.6 of the Revenue and Taxation Code, as amended by Section 2 of Chapter 272 of the Statutes of 2017, is amended to read:

7093.6.

(a) The director of the department, or their delegates, may compromise any final tax liability.

(c) Offers in compromise shall be considered only for liabilities that were generated from a business that has been discontinued or transferred, where the taxpayer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(d) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(e) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final tax liability shall not be subject to administrative appeal or judicial review.

(f) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the taxpayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the taxpayer.

(g) When more than one taxpayer is liable for the debt, such as with spouses or partnerships or other business combinations, the acceptance of an offer in compromise from one liable taxpayer shall not relieve the other taxpayers from paying the entire liability. However, the amount of the liability shall be reduced by the amount of the accepted offer.

(h) Whenever a compromise of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 7056. No list shall be prepared and no releases distributed by the department in connection with these statements.

(i) A compromise made under this section may be rescinded, all compromised liabilities may be reestablished (without regard to any statute of limitations that otherwise may be applicable), and no portion of the amount offered in compromise refunded, if either of the following occurs:

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(j) A person who, in connection with an offer or compromise under this section, or offer of that compromise to enter into that agreement, willfully does either of the following shall be guilty of a felony and, upon conviction, shall be fined not more than fifty thousand dollars ($50,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both, together with the costs of investigation and prosecution:

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(k) For purposes of this section, “person” means the taxpayer, a member of the taxpayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the taxpayer, or another corporation or entity owned or controlled by the taxpayer, directly or indirectly, or that owns or controls the taxpayer, directly or indirectly.

(l) This section shall become operative on January 1, 2028.

SEC. 12.

Section 7097 of the Revenue and Taxation Code is amended to read:

7097.

(a) At least 30 days prior to the filing or recording of liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code, the department shall mail to the taxpayer a preliminary notice. The notice shall specify the statutory authority of the department for filing or recording the lien, indicate the earliest date on which the lien may be filed or recorded, and state the remedies available to the taxpayer to prevent the filing or recording of the lien. In the event tax liens are filed for the same liability in multiple counties, only one preliminary notice shall be sent.

(b) The preliminary notice required by this section shall not apply to jeopardy determinations issued under Article 4 (commencing with Section 6536) of Chapter 5.

(c) If the department determines that filing a lien was in error, it shall mail a release to the taxpayer and the entity recording the lien as soon as possible, but no later than seven days, after this determination and the receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the taxpayer and the entity recording the lien.

(d) When the department releases a lien erroneously filed, notice of that fact shall be mailed to the taxpayer and, upon the request of the taxpayer, a copy of the release shall be mailed to the major credit reporting companies in the county where the lien was filed.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the tax liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(C) Release or subordination will be in the best interest of the state and another person that is not the taxpayer but that holds an interest with the taxpayer in the property that is subject to the lien.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 13.

Section 7656.5 is added to the Revenue and Taxation Code, to read:

7656.5.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 14.

Section 7657 of the Revenue and Taxation Code is amended to read:

7657.

(a) If the department finds that a person’s failure to make a timely report, return, or payment is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the penalty provided by Sections 7655, 7659.5, 7659.6, 7659.9 7660, 7705, and 7713.

(b) Except as provided in subdivisions (c) and (d), any person seeking to be relieved of the penalty shall file with the department a statement under penalty of perjury setting forth the facts upon which that person bases the claim for relief.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 15.

Section 7658 of the Revenue and Taxation Code is amended to read:

7658.

SEC. 16.

Section 8126 of the Revenue and Taxation Code is amended to read:

8126.

If the department determines that any amount not required to be paid under this part has been paid by any person to the state, the department shall set forth that fact in its records and certify the amount collected in excess of the amount legally due and the person from whom it was collected and certify the amount to the Controller for credit or refund. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 17.

Section 8191 of the Revenue and Taxation Code is amended to read:

8191.

If the department determines that any amount has been illegally determined to be due from any person either by the person filing the return or by the department, the department shall set forth that fact in its records, certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made, and authorize the cancellation of the amount upon the records of the department and the Controller. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 18.

Section 8754.5 is added to the Revenue and Taxation Code, to read:

8754.5.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 19.

Section 8877 of the Revenue and Taxation Code is amended to read:

8877.

(a) If the department finds that a person’s failure to make a timely return or payment is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the penalty provided by Sections 8760, 8801, 8854, and 8876.

(b) Except as provided in subdivisions (c) or (d), any person seeking to be relieved of the penalty shall file with the department a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 20.

Section 8878 of the Revenue and Taxation Code is amended to read:

8878.

(b) Except as provided in subdivision (c), any person seeking to be relieved of the interest shall file with the department a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

SEC. 21.

Section 8957 of the Revenue and Taxation Code is amended to read:

8957.

(a) Subject to the limitations in subdivisions (b) and (c), the department may by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a user, vendor, or other person liable for any amount under this part to withhold from those credits or other personal property the amount of any tax, interest, or penalties due from that user, vendor, or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the department at those times as 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).

(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.

(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 user, vendor, or other person liable for the tax.

(3) Any other payments or credits due or becoming due the user, vendor, 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.

SEC. 22.

Section 9151 of the Revenue and Taxation Code is amended to read:

9151.

If the department determines that any amount not required to be paid under this part has been paid by any person, the department shall set forth that fact in its records and certify the amount paid in excess of the amount legally due and the person by whom the excess was paid to the department or from whom it was collected. The excess amount paid or collected shall be credited on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall either be refunded to the person, or the person’s successors, administrators, executors, or assigns, or, if authorized by the department, deducted by the person from any amounts to become due from that person under this part.

Any overpayment of the tax by a user to a vendor who is required to collect the tax and who gives the user a receipt therefor pursuant to Section 8732 shall be credited or refunded by the state to the user.

For any amount exceeding fifty thousand dollars ($50,000), the department’s determination under this section shall be available as a public record for at least 10 days after the effective date of the determination.

SEC. 23.

Section 9196 of the Revenue and Taxation Code is amended to read:

9196.

SEC. 24.

Section 9275 of the Revenue and Taxation Code is amended to read:

9275.

(b) The preliminary notice required by this section shall not apply to jeopardy determinations issued under Article 4 (commencing with Section 8826) of Chapter 4.

(c) If the department determines that filing a lien was in error, it shall mail a release to the taxpayer and the entity recording the lien as soon as possible, but no later than seven days, after this determination and receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the taxpayer and the entity recording the lien.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the tax liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 25.

Section 9278 of the Revenue and Taxation Code, as amended by Section 3 of Chapter 272 of the Statutes of 2017, is amended to read:

9278.

(a) Beginning January 1, 2003, the director of the department, or their delegates, may compromise any final tax liability.

(b) For purposes of this section, “a final tax liability” means any final tax liability arising under Part 3 (commencing with Section 8601), or related interest, additions to tax, penalties, or other amounts assessed under this part.

(A) That part of a final tax liability, including related interest, additions to tax, penalties or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the vendor collected use fuel tax reimbursement from the purchaser or other person and which was determined against the vendor under Article 2 (commencing with Section 8776), Article 3 (commencing with Section 8801), or Article 5 (commencing with Section 8851) of Chapter 4.

(B) A final tax liability, including related interest, additions to tax, penalties or other amounts assessed under this part, arising under Article 4.5 (commencing with Section 9021) of Chapter 5.

(3) A qualified final tax liability may not be compromised with any of the following:

(f) A taxpayer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required use fuel tax returns for a five-year period from the date the liability is compromised, or until the taxpayer is no longer required to file use fuel tax returns, whichever period is earlier.

(g) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 9255. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(o) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 26.

Section 9278 of the Revenue and Taxation Code, as amended by Section 4 of Chapter 272 of the Statutes of 2017, is amended to read:

9278.

(a) The director of the department, or their delegates, may compromise any final tax liability.

(d) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 9255. No list shall be prepared and no releases distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(l) This section shall become operative on January 1, 2028.

SEC. 27.

Section 12221 of the Revenue and Taxation Code is amended to read:

12221.

In the case of an insurer not transacting title insurance in this State, the basis of the tax is, in respect to each year, the amount of gross premiums, less return premiums, received in such year by such insurer upon its business done in this State. “Gross premiums” do not include premiums received for reinsurance and for ocean marine insurance. Gross premiums of reciprocal or interinsurance exchanges shall be determined as provided in Section 1530 of the Insurance Code. For purposes of the tax imposed by this chapter, “gross premiums” shall be deemed to include home protection contract fees defined in Section 12740 of the Insurance Code. Notwithstanding the rate specified in Section 12202, for annuity policies or contracts that constitute qualified funding assets pursuant to Section 130(d) of Title 26 of the United States Code, the gross premiums tax rate for premiums received for those annuity policies and contracts shall be 0 percent for premiums received on or after January 1, 2023.

SEC. 28.

Section 19559 of the Revenue and Taxation Code is repealed.

SEC. 29.

Section 30185.5 is added to the Revenue and Taxation Code, to read:

30185.5.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 30.

Section 30282 of the Revenue and Taxation Code is amended to read:

30282.

(a) If the department finds that a person’s failure to make a timely report or payment is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and in the absence of willful neglect, the person may be relieved of the penalty provided by Sections 30171, 30190, 30221, 30264, and 30281.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 31.

Section 30283 of the Revenue and Taxation Code is amended to read:

30283.

SEC. 32.

Section 30315 of the Revenue and Taxation Code is amended to read:

30315.

(a) The department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a distributor, dealer, or other person liable for any amount under this part to withhold from these credits or other personal property the amount of any tax, interest, or penalties due from the distributor, dealer, or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the department 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).

(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.

(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 distributor, dealer, or other person liable for the tax.

(3) Any other payments or credits due or becoming due the distributor, dealer, 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.

SEC. 33.

Section 30361 of the Revenue and Taxation Code is amended to read:

30361.

If the department determines that any amount not required to be paid under this part has been paid by any person, the department shall set forth that fact in its records and certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom it was paid. The excess amount collected or paid shall be credited by the department on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 34.

Section 30421 of the Revenue and Taxation Code is amended to read:

30421.

If any amount has been illegally determined, the department shall set forth that fact in its records, certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made, and authorize the cancellation of the amount upon the records of the department. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 35.

Section 30459.15 of the Revenue and Taxation Code, as amended by Section 5 of Chapter 272 of the Statutes of 2017, is amended to read:

30459.15.

(a) Beginning on January 1, 2007, the director of the department, or their delegates, may compromise any final tax liability.

(b) For purposes of this section, “a final tax liability” means any final tax liability arising under Part 13 (commencing with Section 30001), or related interest, additions to tax, penalties, or other amounts assessed under this part.

(1) A business that has been discontinued or transferred, where the taxpayer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(2) A taxpayer that has purchased untaxed cigarettes or tobacco products from out-of-state vendors for the taxpayer’s own use or consumption.

(3) Notwithstanding paragraph (1) or (2), a qualified final tax liability may be compromised regardless of whether the business has been discontinued or transferred or whether the taxpayer has a controlling interest or association with a similar type of business as the transferred or discontinued business. All other provisions of this section that apply to a final tax liability shall also apply to a qualified final tax liability, and a compromise shall not be made under this subdivision unless all other requirements of this section are met. For purposes of this subdivision, a “qualified final tax liability” means either of the following:

(A) That part of a final tax liability, including related interest, additions to tax, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the taxpayer collected cigarette or tobacco products tax reimbursement from the purchaser or other person and which was determined against the taxpayer under Article 2 (commencing with Section 30201), Article 3 (commencing with Section 30221), or Article 5 (commencing with Section 30261) of Chapter 4.

(B) That part of a final tax liability for cigarette or tobacco products tax, including related interest, additions to tax, penalties, or other amounts assessed under this part, determined under Article 2 (commencing with Section 30201), Article 3 (commencing with Section 30221), and Article 5 (commencing with Section 30261) of Chapter 4 against a taxpayer who is a consumer that is not required to hold a license under Article 1 (commencing with Section 30140) of Chapter 3.

(4) A qualified final tax liability may not be compromised with any of the following:

(A) A taxpayer who previously received a compromise under paragraph (3) for a liability, or a part thereof, arising from a transaction or transactions that are substantially similar to the transaction or transactions attributable to the liability for which the taxpayer is making the offer.

(B) A business that was transferred by a taxpayer who previously received a compromise under paragraph (3) and who has a controlling interest or association with the transferred business, when the liability for which the offer is made is attributable to a transaction or transactions substantially similar to the transaction or transactions for which the taxpayer’s liability was previously compromised.

(C) A business in which a taxpayer who previously received a compromise under paragraph (3) has a controlling interest or association with a similar type of business for which the taxpayer received the compromise, when the liability of the business making the offer arose from a transaction or transactions substantially similar to the transaction or transactions for which the taxpayer’s liability was previously compromised.

(d) The department may, in its discretion, enter into a written agreement that permits the taxpayer to pay the compromise in installments for a period not exceeding one year. The agreement may provide that such installments shall be paid by electronic funds transfers or any other means to facilitate the payment of each installment.

(e) A taxpayer that has received a compromise under paragraph (3) of subdivision (c) may be required to enter into any collateral agreement that is deemed necessary for the protection of the interests of the state. A collateral agreement may include a provision that allows the department to reestablish the liability, or any portion thereof, if the taxpayer has sufficient annual income during the succeeding five-year period. The department shall establish criteria for determining “sufficient annual income” for purposes of this subdivision.

(f) A taxpayer that has received a compromise under paragraph (3) of subdivision (c) shall file and pay by the due date all subsequently required cigarette and tobacco products tax reports or returns for a five-year period from the date the liability is compromised, or until the taxpayer is no longer required to file cigarette and tobacco products tax reports or returns, whichever period is earlier.

(g) Offers in compromise shall not be considered under the following conditions:

(1) The taxpayer has been convicted of felony tax evasion under this part during the liability period.

(2) The taxpayer has filed a statement under paragraph (3) of subdivision (h) and continues to purchase untaxed cigarettes or tobacco products from out-of-state vendors for the taxpayer’s own use or consumption.

(h) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(3) For liabilities generated in the manner described in paragraph (2) of subdivision (c), the taxpayer shall file with the department a statement, under penalty of perjury, that the taxpayer will no longer purchase untaxed cigarettes or tobacco products from out-of-state vendors for the taxpayer’s own use or consumption.

(i) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final tax liability shall not be subject to administrative appeal or judicial review.

(j) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid tax and fraud or evasion penalty.

(2) The minimum offer may be waived if it can be shown that the taxpayer making the offer was not the person responsible for perpetrating the fraud or evasion. This authorization to waive only applies to partnership accounts where the intent to commit fraud or evasion can be clearly attributed to a partner of the taxpayer.

(k) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the taxpayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the taxpayer.

(l) When more than one taxpayer is liable for the debt, such as with spouses or partnerships or other business combinations, including, but not limited to, taxpayers who are liable through dual determination or successor’s liability, the acceptance of an offer in compromise from one liable taxpayer shall reduce the amount of the liability of the other taxpayers by the amount of the accepted offer.

(m) Whenever a compromise of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 30455. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(n) A compromise made under this section may be rescinded, all compromised liabilities may be reestablished, without regard to any statute of limitations that otherwise may be applicable, and no portion of the amount offered in compromise refunded, if either of the following occurs:

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(o) A person who, in connection with an offer or compromise under this section, or offer of that compromise to enter into that agreement, willfully does either of the following shall be guilty of a felony and, upon conviction, shall be fined not more than fifty thousand dollars ($50,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both, together with the costs of investigation and prosecution:

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(p) For purposes of this section, “person” means the taxpayer, a member of the taxpayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the taxpayer, or another corporation or entity owned or controlled by the taxpayer, directly or indirectly, or that owns or controls the taxpayer, directly or indirectly.

(q) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 36.

Section 30459.15 of the Revenue and Taxation Code, as amended by Section 6 of Chapter 272 of the Statutes of 2017, is amended to read:

30459.15.

(a) The director of the department, or their delegates, may compromise any final tax liability.

(2) A taxpayer that has purchased untaxed cigarettes or tobacco products from out-of-state vendors for the taxpayer’s own use or consumption.

(d) Offers in compromise shall not be considered under the following conditions:

(1) The taxpayer has been convicted of felony tax evasion under this part during the liability period.

(2) The taxpayer has filed a statement under paragraph (3) of subdivision (e) and continues to purchase untaxed cigarettes or tobacco products from out-of-state vendors for the taxpayer’s own use or consumption.

(e) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(f) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final tax liability shall not be subject to administrative appeal or judicial review.

(g) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid tax and fraud or evasion penalty.

(h) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the taxpayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the taxpayer.

(i) When more than one taxpayer is liable for the debt, such as with spouses or partnerships or other business combinations, including, but not limited to, taxpayers who are liable through dual determination or successor’s liability, the acceptance of an offer in compromise from one liable taxpayer shall reduce the amount of the liability of the other taxpayers by the amount of the accepted offer.

(j) Whenever a compromise of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 30455. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(k) A compromise made under this section may be rescinded, all compromised liabilities may be reestablished, without regard to any statute of limitations that otherwise may be applicable, and no portion of the amount offered in compromise refunded, if either of the following occurs:

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(l) A person who, in connection with an offer or compromise under this section, or offer of that compromise to enter into that agreement, willfully does either of the following shall be guilty of a felony and, upon conviction, shall be fined not more than fifty thousand dollars ($50,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both, together with the costs of investigation and prosecution:

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(m) For purposes of this section, “person” means the taxpayer, a member of the taxpayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the taxpayer, or another corporation or entity owned or controlled by the taxpayer, directly or indirectly, or that owns or controls the taxpayer, directly or indirectly.

(n) This section shall become operative on January 1, 2028.

SEC. 37.

Section 30459.5 of the Revenue and Taxation Code is amended to read:

30459.5.

(b) The preliminary notice required by this section shall not apply to jeopardy determinations issued under Article 4 (commencing with Section 30241) of Chapter 4.

(c) If the department determines that filing a lien was in error, it shall mail a release to the taxpayer and the entity recording the lien as soon as possible, but no later than seven days, after this determination and receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the taxpayer and the entity recording the lien.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the tax liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 38.

Section 32471.5 of the Revenue and Taxation Code, as amended by Section 7 of Chapter 272 of the Statutes of 2017, is amended to read:

32471.5.

(a) The executive director and chief counsel of the board, or their delegates, may compromise any final tax liability pursuant to this section.

(b) For purposes of this section, the following definitions apply:

(1) “Board” means the State Board of Equalization or its delegates.

(2) “Delegates” includes the California Department of Tax and Fee Administration.

(3) “A final tax liability” means any final tax liability arising under Part 14 (commencing with Section 32001), or related interest, additions to tax, penalties, or other amounts assessed under this part.

(c) (1) Offers in compromise shall be considered only for liabilities that were generated by a business that has been discontinued or transferred, where the taxpayer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(2) Notwithstanding paragraph (1), a qualified final tax liability may be compromised regardless of whether the business has been discontinued or transferred or whether the taxpayer has a controlling interest or association with a similar type of business as the transferred or discontinued business. All other provisions of this section that apply to a final tax liability shall also apply to a qualified final tax liability, and a compromise shall not be made under this subdivision unless all other requirements of this section are met. For purposes of this subdivision, a “qualified final tax liability” means that part of a final tax liability, including related interest, additions to tax, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the board finds no evidence that the taxpayer collected reimbursement or tax reimbursement from the purchaser or other person and which was determined against the taxpayer under Article 2 (commencing with Section 32271), Article 3 (commencing with Section 32291), or Article 4 (commencing with Section 32301) of Chapter 6.

(3) A qualified final tax liability may not be compromised with any of the following:

(d) The board may, in its discretion, enter into a written agreement which permits the taxpayer to pay the compromise in installments for a period not exceeding one year. The agreement may provide that such installments shall be paid by electronic funds transfers or any other means to facilitate the payment of each installment.

(e) The members of the State Board of Equalization shall not participate in any offer in compromise matters pursuant to this section.

(f) A taxpayer that has received a compromise under paragraph (2) of subdivision (c) may be required to enter into any collateral agreement that is deemed necessary for the protection of the interests of the state. A collateral agreement may include a provision that allows the board to reestablish the liability, or any portion thereof, if the taxpayer has sufficient annual income during the succeeding five-year period. The board shall establish criteria for determining “sufficient annual income” for purposes of this subdivision.

(g) A taxpayer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required tax returns and reports for a five-year period from the date the liability is compromised, or until the taxpayer is no longer required to file tax returns and reports, whichever period is earlier.

(h) Offers in compromise shall not be considered where the taxpayer has been convicted of felony tax evasion under this part during the liability period.

(i) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The board shall have determined that acceptance of the compromise is in the best interest of the state.

(j) A determination by the board that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final tax liability shall not be subject to administrative appeal or judicial review.

(k) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid tax and fraud or evasion penalty.

(l) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the board shall notify the taxpayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the taxpayer.

(m) When more than one taxpayer is liable for the debt, such as with spouses or partnerships or other business combinations, including, but not limited to, taxpayers who are liable through dual determination or successor’s liability, the acceptance of an offer in compromise from one liable taxpayer shall reduce the amount of the liability of the other taxpayers by the amount of the accepted offer.

(n) Whenever a compromise of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the board a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 32455. A list shall not be prepared and releases shall not be distributed by the board in connection with these statements.

(o) A compromise made under this section may be rescinded, all compromised liabilities may be reestablished, without regard to any statute of limitations that otherwise may be applicable, and no portion of the amount offered in compromise refunded, if either of the following occurs:

(1) The board determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the board property belonging to the estate of a taxpayer or other person liable for the tax.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record or made a false statement, relating to the estate or financial condition of the taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(p) A person who, in connection with an offer or compromise under this section, or offer of that compromise to enter into that agreement, willfully does either of the following shall be guilty of a felony and, upon conviction, shall be fined not more than fifty thousand dollars ($50,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or both, together with the costs of investigation and prosecution:

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(q) For purposes of this section, “person” means the taxpayer, a member of the taxpayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the taxpayer, or another corporation or entity owned or controlled by the taxpayer, directly or indirectly, or that owns or controls the taxpayer, directly or indirectly.

(r) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 39.

Section 32471.5 of the Revenue and Taxation Code, as amended by Section 8 of Chapter 272 of the Statutes of 2017, is amended to read:

32471.5.

(a) The executive director and chief counsel of the board, or their delegates, may compromise any final tax liability pursuant to this section.

(b) For purposes of this section, the following definitions apply:

(1) “Board” means the State Board of Equalization or its delegates.

(2) “Delegates” includes the California Department of Tax and Fee Administration.

(c) Offers in compromise shall be considered only for liabilities that were generated by a business that has been discontinued or transferred, where the taxpayer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(d) Offers in compromise shall not be considered where the taxpayer has been convicted of felony tax evasion under this part during the liability period.

(e) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The board shall have determined that acceptance of the compromise is in the best interest of the state.

(f) A determination by the board that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final tax liability shall not be subject to administrative appeal or judicial review.

(g) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid tax and fraud or evasion penalty.

(h) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the board shall notify the taxpayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the taxpayer.

(j) Whenever a compromise of tax or penalties or total tax and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the board a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 32455. A list shall not be prepared and releases shall not be distributed by the board in connection with these statements.

(1) The board determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the board property belonging to the estate of a taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(n) This section shall become operative on January 1, 2028.

SEC. 40.

Section 34013 of the Revenue and Taxation Code is amended to read:

34013.

(a) The department shall administer and collect the taxes imposed by this part pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001)). For purposes of this part, the references in the Fee Collection Procedures Law to “fee” shall include the taxes imposed by this part, and references to “feepayer” shall include a person required to pay or collect the taxes imposed by this part.

(b) (1) A person licensed to engage in commercial cannabis activity under Division 10 (commencing with Section 26000) of the Business and Professions Code that failed to remit amounts due by means of electronic funds transfer on and after January 1, 2022, and before January 1, 2023, is not subject to or is relieved of any of the penalties imposed by Section 55050 for that failure.

(2) On or after January 1, 2022, subdivision (a) of Section 55050 shall not apply to a person required to pay or collect the taxes imposed by this part on a person licensed to engage in commercial cannabis activity under Division 10 (commencing with Section 26000) of the Business and Professions Code if the department deems it necessary to facilitate the collection of amounts due.

(c) The department may prescribe, adopt, and enforce regulations relating to the administration and enforcement of this part, including, but not limited to, collections, reporting, refunds, and appeals.

(d) The department shall adopt necessary rules and regulations to administer the taxes in this part. Such rules and regulations may include methods or procedures to tag cannabis or cannabis products, or the packages thereof, to designate prior tax payment.

(e) Until January 1, 2024, the department may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer, and enforce its duties under this division. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption, and may be readopted in accordance with subdivision (h) of Section 11346.1 of the Government Code.

(f) Any person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code who fails to pay the taxes imposed under this part shall, in addition to owing the taxes not paid, be subject to a penalty of at least one-half the amount of the taxes not paid, and shall be subject to having its license revoked pursuant to Section 26031 of the Business and Professions Code.

(g) The department may bring such legal actions as are necessary to collect any deficiency in the tax required to be paid, and, upon the department’s request, the Attorney General shall bring the actions.

SEC. 41.

Section 34013.1 is added to the Revenue and Taxation Code, to read:

34013.1.

Notwithstanding Sections 7056 and 55381:

(a) The department may disclose the name, business name, business city location, account number, and account status of a person registered with the department for purposes of collecting and remitting the cannabis excise tax.

(b) (1) Notwithstanding subdivision (a), the department shall, upon written request, provide to a state and local law enforcement agency any and all information collected by the department under this part regarding a person required by this part to collect and remit the cannabis excise tax and information collected under Part 1 (commencing with Section 6001). The state and local law enforcement agencies authorized by this subdivision shall only access and use this information to the extent necessary to carry out the functions and duties of that agency and the agency shall adhere to all state laws, policies, and regulations pertaining to the protection of personal information and individual privacy.

(2) For purposes of this section, “law enforcement agency” means the Department of the California Highway Patrol, a sheriff department, a police department, or a California state, city, county, or city and county agency or department designated by the governing body of that agency to enforce state cannabis laws or local cannabis ordinances and regulations.

(c) The department is authorized to share information obtained under this part and under Part 1 (commencing with Section 6001), with a licensing authority, pursuant to a memorandum of understanding, as deemed necessary by the department.

SEC. 42.

Section 34016 of the Revenue and Taxation Code is amended to read:

34016.

(a) Any peace officer or department employee granted limited peace officer status pursuant to paragraph (6) of subdivision (a) of Section 830.11 of the Penal Code, upon presenting appropriate credentials, is authorized to enter any place as described in paragraph (2) and to conduct inspections in accordance with the following paragraphs, inclusive.

(1) Inspections shall be performed in a reasonable manner and at times that are reasonable under the circumstances, taking into consideration the normal business hours of the place to be entered.

(2) Inspections may be at any place at which cannabis or cannabis products are sold to purchasers, cultivated, or stored, or at any site where evidence of activities involving evasion of tax may be discovered.

(3) Inspections shall be conducted no more than once in a 24-hour period.

(b) Any person who fails or refuses to allow an inspection shall be guilty of a misdemeanor. Each offense shall be punished by a fine not to exceed five thousand dollars ($5,000), or imprisonment not exceeding one year in a county jail, or both the fine and imprisonment. The court shall order any fines assessed be deposited in the California Cannabis Tax Fund.

(c) (1) (A) The department or a law enforcement agency may seize cannabis or cannabis products from a person who possesses, stores, owns, or has made a retail sale of those cannabis or cannabis products if any of the following apply:

(i) Until January 1, 2023, the cannabis or cannabis products are without evidence of tax payment.

(ii) The cannabis or cannabis products are not contained in secure packaging.

(iii) The person is an unlicensed person specified in paragraph (1) of subdivision (a) of Section 34015.1.

(iv) The cannabis or cannabis products were not reported in the track and trace system, as specified in subdivision (b) of Section 34015.1.

(B) Any cannabis or cannabis products seized by a law enforcement agency or the department shall be deemed forfeited and the department shall comply with the procedures set forth in Sections 30436 through 30449, inclusive.

(2) Any seizures authorized pursuant to paragraph (1) of this subdivision are in addition to any criminal or civil penalties that may be imposed by law, including subdivision (e) of this section.

(d) Any person who renders a false or fraudulent report is guilty of a misdemeanor and subject to a fine not to exceed one thousand dollars ($1,000) for each offense.

(e) Any violation of any provisions of this part, except as otherwise provided, is a misdemeanor and is punishable as such.

(f) All moneys remitted to the department under this part shall be credited to the California Cannabis Tax Fund.

SEC. 43.

Section 34018 of the Revenue and Taxation Code is amended to read:

34018.

(a) The California Cannabis Tax Fund is hereby created in the State Treasury. The Tax Fund shall consist of all taxes, interest, penalties, and other amounts collected and paid to the department pursuant to this part, less payment of refunds.

(b) Notwithstanding any other law, the California Cannabis Tax Fund is a special trust fund established solely to carry out the purposes of the Control, Regulate and Tax Adult Use of Marijuana Act and all revenues deposited into the Tax Fund, together with interest or dividends earned by the fund, are hereby continuously appropriated for the purposes of the Control, Regulate and Tax Adult Use of Marijuana Act without regard to fiscal year and shall be expended only in accordance with the provisions of this part and its purposes.

(c) Notwithstanding any other law, the taxes imposed by this part and the revenue derived therefrom, including investment interest, shall not be considered to be part of the General Fund, as that term is used in Chapter 1 (commencing with Section 16300) of Part 2 of Division 4 of Title 2 of the Government Code, shall not be considered General Fund revenue for purposes of Section 8 of Article XVI of the California Constitution and its implementing statutes, and shall not be considered “moneys” for purposes of subdivisions (a) and (b) of Section 8 of Article XVI of the California Constitution and its implementing statutes.

SEC. 44.

Section 38405.5 is added to the Revenue and Taxation Code, to read:

38405.5.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 45.

Section 38452 of the Revenue and Taxation Code is amended to read:

38452.

(d) The department shall establish criteria that provides for efficient resolution of requests for relief pursuant to this section.

SEC. 46.

Section 38453 of the Revenue and Taxation Code is amended to read:

38453.

SEC. 47.

Section 38503 of the Revenue and Taxation Code is amended to read:

38503.

(a) Subject to the limitations in subdivisions (b) and (c), the department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any credits or other personal property belonging to a timber owner liable for any amount under this part to withhold from those credits or other personal property the amount of any tax, interest, or penalties due from that timber owner, or the amount of any liability incurred by the timber owner under this part, and to transmit the amount withheld to the department at those times as it may designate.

(1) The amount due stated on the notice.

(2) The amount of each payment due or becoming due to the timber owner during the period of the levy.

(d) For the purposes of this section, “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. “Payments” does include all of the following:

(1) Payments due for services for independent contractors, dividends, rents, royalties, residuals, patent rights, mineral or other natural rights.

(2) Payments or credits due or becoming due periodically as a result of an enforceable obligation to the timber owner liable for the tax.

(3) Any other payments or credits due or becoming due the timber owner as the result of written or oral contracts for services or sales whether denominated as wages, salary, commission, bonus, or otherwise.

SEC. 48.

Section 38601 of the Revenue and Taxation Code is amended to read:

38601.

If the department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in the records of the department, certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid, and credit the excess amount collected or paid on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 49.

Section 38631 of the Revenue and Taxation Code is amended to read:

38631.

SEC. 50.

Section 40065.5 is added to the Revenue and Taxation Code, to read:

40065.5.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 51.

Section 40102 of the Revenue and Taxation Code is amended to read:

40102.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 52.

Section 40103 of the Revenue and Taxation Code is amended to read:

40103.

(a) If the department finds that a person’s failure to make a timely report or payment was due to a disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the interest provided by Sections 40065, 40067, 40083, and 40101.

SEC. 53.

Section 40111 of the Revenue and Taxation Code is amended to read:

40111.

(a) If the department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in the records of the department, certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid, and shall credit the excess amount collected or paid on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

(b) Any overpayment of the surcharge by a consumer to the state shall be credited or refunded by the state to the consumer.

(c) (1) Except as provided in paragraph (2), any overpayment of the surcharge by the consumer to an electric utility that is required to collect the surcharge shall be refunded by the state to the consumer.

(2) If the electric utility has paid the amount to the department and establishes to the satisfaction of the department that it has not collected the amount from the consumer or has refunded the amount to the consumer, the overpayment may be credited or refunded by the state to the electric utility.

SEC. 54.

Section 40121 of the Revenue and Taxation Code is amended to read:

40121.

SEC. 55.

Section 40155 of the Revenue and Taxation Code is amended to read:

40155.

(a) The department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a consumer or other person liable for any amount under this part to withhold from these credits or other personal property the amount of any surcharge, interest, or penalties due from the consumer or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the department 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).

(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.

(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 consumer or other person liable for the surcharge.

(3) Any other payments or credits due or becoming due the consumer 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 consumer and shall be delivered, mailed, or served by first-class mail, or by electronic transmission or other electronic technology, 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.

SEC. 56.

Section 40215 of the Revenue and Taxation Code is amended to read:

40215.

(b) If the department determines that filing a lien was in error, it shall mail a release to the taxpayer and the entity recording the lien as soon as possible, but no later than seven days, after this determination and receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the taxpayer and the entity recording the lien.

(c) When the department releases a lien erroneously filed, notice of that fact shall be mailed to the taxpayer and, upon the request of the taxpayer, a copy of the release shall be mailed to the major credit reporting companies in the county where the lien was filed.

(d) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the tax liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 57.

Section 41054.5 is added to the Revenue and Taxation Code, to read:

41054.5.

(a) Subject to subdivision (c), if the Governor issues a state of emergency proclamation, the department may extend the time, for a period not to exceed three months, for making any report or return or paying any surcharge required under this part for any person in an area identified in the state of emergency proclamation.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 58.

Section 41095 of the Revenue and Taxation Code is amended to read:

41095.

(a) Any person who fails to pay any surcharge to the state or any amount of surcharge required to be collected and paid to the state, except amounts of determinations made by the department under Article 3 (commencing with Section 41070) or Article 4 (commencing with Section 41080), within the time required shall pay a penalty of 10 percent of the surcharge in addition to the surcharge or amount of surcharge, plus interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the surcharge or the amount of surcharge required to be collected became due and payable to the state until the date of payment.

(b) Any person who fails to file a return in accordance with the due date set forth in Section 41052 or the due date established by the department in accordance with Section 41052.1, shall pay a penalty of 10 percent of the amount of the surcharge with respect to the period for which the return is required.

(c) The penalties imposed by this section shall be limited to a maximum of 10 percent of the surcharge for which the return is required for any one return.

SEC. 59.

Section 41096 of the Revenue and Taxation Code is amended to read:

41096.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 60.

Section 41097 of the Revenue and Taxation Code is amended to read:

41097.

SEC. 61.

Section 41100 of the Revenue and Taxation Code is amended to read:

41100.

(a) If the department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in the records of the department, certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid, and credit the excess amount collected or paid on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or their successors, administrators, or executors. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

(b) Any overpayment of the surcharge by a service user to a service supplier or by a prepaid consumer to a seller who is required to collect the surcharge shall be credited or refunded by the state to the service user. However, if the service supplier or seller has paid the amount to the department and establishes to the satisfaction of the department that it has not collected the amount from the service user or has refunded the amount to the service user, the overpayment may be credited or refunded by the state to the service supplier.

SEC. 61.5.

Section 41100 of the Revenue and Taxation Code is amended to read:

41100.

(a) If the department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in the records of the department, certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid, and credit the excess amount collected or paid on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or their successors, administrators, or executors. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

(b) Any overpayment of a surcharge by a service user to a service supplier or by a prepaid consumer to a seller who is required to collect the surcharge shall be credited or refunded by the state to the service user. However, if the service supplier or seller has paid the amount to the department and establishes to the satisfaction of the department that it has not collected the amount from the service user or has refunded the amount to the service user, the overpayment may be credited or refunded by the state to the service supplier.

SEC. 62.

Section 41107 of the Revenue and Taxation Code is amended to read:

41107.

SEC. 63.

Section 41123.5 of the Revenue and Taxation Code is amended to read:

41123.5.

(a) The department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons, other than a service supplier, having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a service user or other person liable for any amount under this part to withhold from these credits or other personal property the amount of any surcharge, interest, or penalties due from the service user or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the department 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).

(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.

(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 service user or other person liable for the surcharge.

(3) Any other payments or credits due or becoming due the service user 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 service user and shall be delivered, mailed, or served by electronic transmission or other electronic technology 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.

SEC. 64.

Section 41171.5 of the Revenue and Taxation Code, as amended by Section 9 of Chapter 272 of the Statutes of 2017, is amended to read:

41171.5.

(a) Beginning on January 1, 2007, the director of the department, or their delegates, may compromise any final surcharge liability.

(b) For purposes of this section, “a final surcharge liability” means any final surcharge liability arising under Part 20 (commencing with Section 41001), or related interest, additions to the surcharge, penalties, or other amounts assessed under this part.

(c) (1) Offers in compromise shall be considered only for liabilities that were generated from a business that has been discontinued or transferred, where the surcharge payer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(2) Notwithstanding paragraph (1), a qualified final surcharge liability may be compromised regardless of whether the business has been discontinued or transferred or whether the surcharge payer has a controlling interest or association with a similar type of business as the transferred or discontinued business. All other provisions of this section that apply to a final surcharge liability shall also apply to a qualified final surcharge liability, and a compromise shall not be made under this subdivision unless all other requirements of this section are met. For purposes of this subdivision, a “qualified final surcharge liability” means either of the following:

(A) That part of a final surcharge liability, including related interest, additions to the surcharge, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the service supplier collected the surcharge from the service user or other person and which was determined against the service supplier under Article 3 (commencing with Section 41070), Article 4 (commencing with Section 41080), or Article 5 (commencing with Section 41085) of Chapter 4.

(B) That part of a final surcharge liability, including related interest, additions to the surcharge, penalties, or other amounts assessed under this part, determined under Article 3 (commencing with Section 41070), Article 4 (commencing with Section 41080), and Article 5 (commencing with Section 41085) of Chapter 4 against a service user who is a consumer that is not required to register with the department under Article 3 (commencing with Section 41040) of Chapter 2.

(3) A qualified final surcharge liability may not be compromised with any of the following:

(A) A surcharge payer who previously received a compromise under paragraph (2) for a liability, or a part thereof, arising from a transaction or transactions that are substantially similar to the transaction or transactions attributable to the liability for which the surcharge payer is making the offer.

(B) A business that was transferred by a surcharge payer who previously received a compromise under paragraph (2) and who has a controlling interest or association with the transferred business, when the liability for which the offer is made is attributable to a transaction or transactions substantially similar to the transaction or transactions for which the surcharge payer’s liability was previously compromised.

(C) A business in which a surcharge payer who previously received a compromise under paragraph (2) has a controlling interest or association with a similar type of business for which the surcharge payer received the compromise, when the liability of the business making the offer arose from a transaction or transactions substantially similar to the transaction or transactions for which the surcharge payer’s liability was previously compromised.

(d) The department may, in its discretion, enter into a written agreement that permits the surcharge payer to pay the compromise in installments for a period not exceeding one year. The agreement may provide that such installments shall be paid by electronic funds transfers or any other means to facilitate the payment of each installment.

(e) A surcharge payer that has received a compromise under paragraph (2) of subdivision (c) may be required to enter into any collateral agreement that is deemed necessary for the protection of the interests of the state. A collateral agreement may include a provision that allows the department to reestablish the liability, or any portion thereof, if the surcharge payer has sufficient annual income during the succeeding five-year period. The department shall establish criteria for determining “sufficient annual income” for purposes of this subdivision.

(f) A surcharge payer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required emergency telephone users surcharge returns for a five-year period from the date the liability is compromised, or until the surcharge payer is no longer required to file emergency telephone users surcharge returns, whichever period is earlier.

(g) Offers in compromise shall not be considered where the surcharge payer has been convicted of felony tax evasion under this part during the liability period.

(h) For amounts to be compromised under this section, the following conditions shall exist:

(1) The surcharge payer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the surcharge payer’s present assets or income.

(B) The surcharge payer does not have reasonable prospects of acquiring increased income or assets that would enable the surcharge payer to satisfy a greater amount of the liability than the amount offered, within a reasonable period of time.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(i) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final surcharge liability shall not be subject to administrative appeal or judicial review.

(j) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid surcharge and fraud or evasion penalty.

(2) The minimum offer may be waived if it can be shown that the surcharge payer making the offer was not the person responsible for perpetrating the fraud or evasion. This authorization to waive only applies to partnership accounts where the intent to commit fraud or evasion can be clearly attributed to a partner of the surcharge payer.

(k) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the surcharge payer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the surcharge payer.

(l) When more than one surcharge payer is liable for the debt, such as with spouses or partnerships or other business combinations, including, but not limited to, surcharge payers who are liable through dual determination or successor’s liability, the acceptance of an offer in compromise from one liable surcharge payer shall reduce the amount of the liability of the other surcharge payers by the amount of the accepted offer.

(m) Whenever a compromise of surcharges or penalties or total surcharges and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the surcharge payer.

(2) The amount of unpaid surcharges and related penalties, additions to surcharges, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the surcharge payer or violate the confidentiality provisions of Section 41132. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a surcharge payer or other person liable for the surcharge.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record or made a false statement, relating to the estate or financial condition of the surcharge payer or other person liable for the surcharge.

(2) The surcharge payer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a surcharge payer or other person liable in respect of the surcharge.

(2) Receives, withholds, destroys, mutilates, or falsifies a book, document, or record, or makes a false statement, relating to the estate or financial condition of the surcharge payer or other person liable in respect of the surcharge.

(p) For purposes of this section, “person” means the surcharge payer, a member of the surcharge payer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the surcharge payer, or another corporation or entity owned or controlled by the surcharge payer, directly or indirectly, or that owns or controls the surcharge payer, directly or indirectly.

(q) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 65.

Section 41171.5 of the Revenue and Taxation Code, as amended by Section 10 of Chapter 272 of the Statutes of 2017, is amended to read:

41171.5.

(a) The director of the department, or their delegates, may compromise any final surcharge liability.

(c) Offers in compromise shall be considered only for liabilities that were generated from a business that has been discontinued or transferred, where the surcharge payer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(d) Offers in compromise shall not be considered where the surcharge payer has been convicted of felony tax evasion under this part during the liability period.

(e) For amounts to be compromised under this section, the following conditions shall exist:

(1) The surcharge payer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the surcharge payer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(f) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final surcharge liability shall not be subject to administrative appeal or judicial review.

(g) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid surcharge and fraud or evasion penalty.

(h) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the surcharge payer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the surcharge payer.

(i) When more than one surcharge payer is liable for the debt, such as with spouses or partnerships or other business combinations, including, but not limited to, surcharge payers who are liable through dual determination or successor’s liability, the acceptance of an offer in compromise from one liable surcharge payer shall reduce the amount of the liability of the other surcharge payers by the amount of the accepted offer.

(j) Whenever a compromise of surcharges or penalties or total surcharges and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the surcharge payer.

(2) The amount of unpaid surcharges and related penalties, additions to surcharges, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the surcharge payer or violate the confidentiality provisions of Section 41132. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a surcharge payer or other person liable for the surcharge.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record, or made a false statement, relating to the estate or financial condition of the surcharge payer or other person liable for the surcharge.

(2) The surcharge payer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a surcharge payer or other person liable in respect of the surcharge.

(m) For purposes of this section, “person” means the surcharge payer, a member of the surcharge payer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the surcharge payer, or another corporation or entity owned or controlled by the surcharge payer, directly or indirectly, or that owns or controls the surcharge payer, directly or indirectly.

(n) This section shall become operative on January 1, 2028.

SEC. 66.

Section 41175 of the Revenue and Taxation Code is amended to read:

41175.

(d) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the surcharge liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 67.

Section 43154.5 is added to the Revenue and Taxation Code, to read:

43154.5.

(a) Subject to subdivision (c), if the Governor issues a state of emergency proclamation, the California Department of Tax and Fee Administration may extend the time, for a period not to exceed three months, for making any report or return or paying any tax required under this part for any person in an area identified in the state of emergency proclamation.

(b) If the California Department of Tax and Fee Administration makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

(c) The California Department of Tax and Fee Administration may make the extension in subdivision (a) only during the first 12 months following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less.

SEC. 68.

Section 43157 of the Revenue and Taxation Code is amended to read:

43157.

(a) If the California Department of Tax and Fee Administration finds that a person’s failure to make a timely return, prepayment, or payment is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the penalty provided by Sections 43155, 43170, and 43306.

(b) Except as provided in subdivisions (c) and (d), any person seeking to be relieved of the penalty shall file with the California Department of Tax and Fee Administration a statement, under penalty of perjury, setting forth the facts upon which the person bases the claim for relief.

(c) (1) Subject to paragraph (2), the California Department of Tax and Fee Administration may grant relief of the penalty for any person in an area identified in a state of emergency proclamation made by the Governor for the period the state of emergency proclamation is effective, regardless of whether the person has filed a statement with the department pursuant to subdivision (b).

(2) The California Department of Tax and Fee Administration may grant the relief in paragraph (1) only during the first 12 months following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less.

(d) The California Department of Tax and Fee Administration shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 69.

Section 43158 of the Revenue and Taxation Code is amended to read:

43158.

(a) If the California Department of Tax and Fee Administration finds that a person’s failure to make a timely return or payment was due to disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of interest provided for by Sections 43154, 43155, 43170, and 43201.

(b) Except as provided in subdivision (c), a person seeking to be relieved of interest shall file with the California Department of Tax and Fee Administration a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

(c) (1) Subject to paragraph (2), the California Department of Tax and Fee Administration may grant relief of the interest for any person in an area identified in a state of emergency proclamation made by the Governor for the period the state of emergency proclamation is effective, regardless of whether the person has filed a statement with the department pursuant to subdivision (b).

SEC. 70.

Section 43444.2 of the Revenue and Taxation Code is amended to read:

43444.2.

(a) The California Department of Tax and Fee Administration may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a taxpayer or other person liable for any amount under this part to withhold from these credits or other personal property the amount of any tax, interest, or penalties due from the taxpayer or other person, or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the California Department of Tax and Fee Administration 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).

(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.

(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 distributor, dealer, or other person liable for the tax.

SEC. 71.

Section 43451 of the Revenue and Taxation Code is amended to read:

43451.

If the California Department of Tax and Fee Administration determines that any amount of tax, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the California Department of Tax and Fee Administration shall set forth that fact in the records of the California Department of Tax and Fee Administration, certify the amount collected in excess of what was legally due and the person from whom it was collected or by whom paid, and credit the excess amount collected or paid on any amounts then due from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors. Any determination by the California Department of Tax and Fee Administration pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 72.

Section 43491 of the Revenue and Taxation Code is amended to read:

43491.

If any amount has been illegally determined, either by the person filing the return or by the California Department of Tax and Fee Administration, the California Department of Tax and Fee Administration shall certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made, and authorize the cancellation of the amount upon the records of the California Department of Tax and Fee Administration. Any determination by the California Department of Tax and Fee Administration pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 73.

Section 43526 of the Revenue and Taxation Code is amended to read:

43526.

(a) At least 30 days prior to the filing or recording of liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code, the California Department of Tax and Fee Administration shall mail to the taxpayer a preliminary notice. The notice shall specify the statutory authority of the California Department of Tax and Fee Administration for filing or recording the lien, indicate the earliest date on which the lien may be filed or recorded, and state the remedies available to the taxpayer to prevent the filing or recording of the lien. In the event tax liens are filed for the same liability in multiple counties, only one preliminary notice shall be sent.

(b) The preliminary notice required by this section shall not apply to jeopardy determinations issued under Article 5 (commencing with Section 43350) of Chapter 3.

(c) If the California Department of Tax and Fee Administration determines that filing a lien was in error, it shall mail a release to the taxpayer and the entity recording the lien as soon as possible, but no later than seven days, after this determination and receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the California Department of Tax and Fee Administration shall immediately issue a release of lien to the taxpayer and the entity recording the lien.

(d) When the California Department of Tax and Fee Administration releases a lien erroneously filed, notice of that fact shall be mailed to the taxpayer and, upon the request of the taxpayer, a copy of the release shall be mailed to the major credit reporting companies in the county where the lien was filed.

(e) (1) The California Department of Tax and Fee Administration may release or subordinate a lien if the California Department of Tax and Fee Administration determines any of the following:

(A) Release or subordination will facilitate the collection of the tax liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 74.

Section 45152.5 is added to the Revenue and Taxation Code, to read:

45152.5.

(a) Subject to subdivision (c), the Governor issues a state of emergency proclamation, the department may extend the time, for a period not to exceed three months, for making any report or return or paying any fee required under this part for any person in an area identified in the state of emergency proclamation.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 75.

Section 45155 of the Revenue and Taxation Code is amended to read:

45155.

(a) If the department finds that a person’s failure to make a timely report or return or payment is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the penalty provided by Sections 45153, 45160, and 45306.

(b) Except as provided in subdivision (c) and (d), any person seeking to be relieved of the penalty shall file with the department a statement, under penalty of perjury, setting forth the facts upon which the person bases the claim for relief.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 76.

Section 45156 of the Revenue and Taxation Code is amended to read:

45156.

(a) If the department finds that a person’s failure to make a timely return or payment was due to disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of interest provided for by Sections 45152, 45153, 45160, and 45201.

(b) Except as provided in subdivision (c), a person seeking to be relieved of interest shall file with the department a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

SEC. 77.

Section 45605 of the Revenue and Taxation Code is amended to read:

45605.

(a) The department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, 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 these credits or other personal property the amount of any fee, interest, or penalties due from the feepayer or other person, or the amount of any liability incurred under this part, and to transmit the amount withheld to the department 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).

(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.

(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, mailed, or served by electronic transmission or other electronic technology 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.

SEC. 78.

Section 45651 of the Revenue and Taxation Code is amended to read:

45651.

If the department determines that any amount of fee, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in its records and certify the amount collected in excess of what was legally due and the person from whom it was collected or by whom paid, and credit the excess amount collected or paid on any amounts then due from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 79.

Section 45801 of the Revenue and Taxation Code is amended to read:

45801.

If any amount has been illegally determined, either by the person filing the return or by the department, the department shall certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made, and authorize the cancellation of the amount upon the records of the department. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 80.

Section 45871 of the Revenue and Taxation Code is amended to read:

45871.

(a) At least 30 days prior to the filing or recording of liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code, the department shall mail to the fee payer a preliminary notice. The notice shall specify the statutory authority of the department for filing or recording the lien, indicate the earliest date on which the lien may be filed or recorded, and state the remedies available to the fee payer to prevent the filing or recording of the lien. In the event fee liens are filed for the same liability in multiple counties, only one preliminary notice shall be sent.

(b) The preliminary notice required by this section shall not be required with respect to jeopardy determinations issued under Article 4 (commencing with Section 45351) of Chapter 3.

(c) If the department determines that the filing of a lien was in error, it shall mail a release to the fee payer and the entity recording the lien as soon as possible, but no later than seven days, after this determination and receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the fee payer and the entity recording the lien.

(d) When the department releases a lien that has been erroneously filed, notice of that release shall be mailed to the fee payer and, upon the request of the fee payer, a copy of the release shall be mailed to the major credit reporting companies in the county where the lien was filed.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the fee liability.

(B) Release or subordination will be in the best interest of the state and the fee payer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 81.

Section 46153.5 is added to the Revenue and Taxation Code, to read:

46153.5.

(a) Subject to subdivision (c), if the Governor issues a state of emergency proclamation, the department may extend the time, for a period not to exceed three months, for making any report or return or paying any fee required under this part for any person in an area identified in the state of emergency proclamation.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 82.

Section 46156 of the Revenue and Taxation Code is amended to read:

46156.

(b) Except as provided in subdivisions (c) and (d), any person seeking to be relieved of the penalty shall file with the department a statement, under penalty of perjury, setting forth the facts upon which the person bases the claim for relief.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 83.

Section 46157 of the Revenue and Taxation Code is amended to read:

46157.

SEC. 84.

Section 46406 of the Revenue and Taxation Code is amended to read:

46406.

(a) The department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, 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 department 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).

(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.

(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.

SEC. 85.

Section 46501 of the Revenue and Taxation Code is amended to read:

46501.

(a) If the department determines that any amount of fee, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in its records and certify the amount collected in excess of what was legally due and the person from whom it was collected or by whom paid. The excess amount collected or paid shall be credited on any amounts then due from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors.

(b) Any determination by the department that is in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

SEC. 86.

Section 46551 of the Revenue and Taxation Code is amended to read:

46551.

(a) If any amount has been illegally determined, either by the person filing the return or by the department, the department shall certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made and authorize the cancellation of the amount upon the records of the department.

SEC. 87.

Section 46626 of the Revenue and Taxation Code is amended to read:

46626.

(a) At least 30 days prior to the filing or recording of a lien pursuant to either Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code, the department shall mail to the fee payer a preliminary notice of lien. The notice shall specify the department’s statutory authority for filing or recording the lien, the earliest date on which the lien may be filed or recorded, and the remedies available to the fee payer to prevent the filing or recording of the lien. In the event liens are filed for the same liability in multiple counties, only one preliminary notice shall be sent.

(b) The preliminary notice required by this section shall not apply to jeopardy determinations issued under Article 4 (commencing with Section 46301) of Chapter 3.

(c) If the department determines that a lien was recorded in error, it shall mail a release to the fee payer and the entity that recorded the lien as soon as possible, but in no event later than seven days after this determination and the receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneously recorded lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the fee payer and the entity that recorded the lien.

(d) Upon issuing a release pursuant to subdivision (c), notice of that release shall be mailed to the taxpayer. Upon the request of the taxpayer, a copy of the release shall be mailed to the major credit reporting companies in the county where the lien was recorded.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the fee liability.

(B) Release or subordination will be in the best interest of the state and the fee payer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 88.

Section 46628 of the Revenue and Taxation Code, as amended by Section 11 of Chapter 272 of the Statutes of 2017, is amended to read:

46628.

(a) Beginning on January 1, 2007, the director of the department, or their delegates, may compromise any final fee liability.

(b) For purposes of this section, “a final fee liability” means any final fee liability arising under Part 24 (commencing with Section 46001), or related interest, additions to fees, penalties, or other amounts assessed under this part.

(c) (1) Offers in compromise shall be considered only for liabilities that were generated from a business that has been discontinued or transferred, where the feepayer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(A) That part of a final fee liability, including related interest, additions to fees, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the marine terminal operator or operator of a pipeline collected the oil spill prevention and administration fee from the owner of the petroleum products or crude oil or other person and which was determined against the feepayer under Article 2 (commencing with Section 46201), Article 3 (commencing with Section 46251), or Article 5 (commencing with Section 46351) of Chapter 3.

(B) A final fee liability, including related interest, additions to fees, penalties, or other amounts assessed under this part, arising under Article 6 (commencing with Section 46451) of Chapter 4.

(C) That part of a final fee liability, including related interest, additions to fees, penalties, or other amounts assessed under this part, determined under Article 2 (commencing with Section 46201), Article 3 (commencing with Section 46251), and Article 5 (commencing with Section 46351) of Chapter 3 against an owner of crude oil or petroleum products that is not required to register with the department under Article 2 (commencing with Section 46101) of Chapter 2.

(3) A qualified final fee liability may not be compromised with any of the following:

(A) A feepayer who previously received a compromise under paragraph (2) for a liability, or a part thereof, arising from a transaction or transactions that are substantially similar to the transaction or transactions attributable to the liability for which the feepayer is making the offer.

(B) A business that was transferred by a feepayer who previously received a compromise under paragraph (2) and who has a controlling interest or association with the transferred business, when the liability for which the offer is made is attributable to a transaction or transactions substantially similar to the transaction or transactions for which the feepayer’s liability was previously compromised.

(C) A business in which a feepayer who previously received a compromise under paragraph (2) has a controlling interest or association with a similar type of business for which the feepayer received the compromise, when the liability of the business making the offer arose from a transaction or transactions substantially similar to the transaction or transactions for which the feepayer’s liability was previously compromised.

(d) The department may, in its discretion, enter into a written agreement that permits the feepayer to pay the compromise in installments for a period not exceeding one year. The agreement may provide that such installments shall be paid by electronic funds transfers or any other means to facilitate the payment of each installment.

(e) A feepayer that has received a compromise under paragraph (2) of subdivision (c) may be required to enter into any collateral agreement that is deemed necessary for the protection of the interests of the state. A collateral agreement may include a provision that allows the department to reestablish the liability, or any portion thereof, if the feepayer has sufficient annual income during the succeeding five-year period. The department shall establish criteria for determining “sufficient annual income” for purposes of this subdivision.

(f) A feepayer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required oil spill prevention and administration fee returns for a five-year period from the date the liability is compromised, or until the feepayer is no longer required to file oil spill prevention and administration fee returns, whichever period is earlier.

(g) Offers in compromise shall not be considered where the feepayer has been convicted of felony tax evasion under this part during the liability period.

(h) For amounts to be compromised under this section, the following conditions shall exist:

(1) The feepayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the feepayer’s present assets or income.

(B) The feepayer does not have reasonable prospects of acquiring increased income or assets that would enable the feepayer to satisfy a greater amount of the liability than the amount offered, within a reasonable period of time.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(i) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final fee liability shall not be subject to administrative appeal or judicial review.

(j) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid fee and fraud or evasion penalty.

(2) The minimum offer may be waived if it can be shown that the feepayer making the offer was not the person responsible for perpetrating the fraud or evasion. This authorization to waive only applies to partnership accounts where the intent to commit fraud or evasion can be clearly attributed to a partner of the feepayer.

(k) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the feepayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the feepayer.

(l) When more than one feepayer is liable for the debt, such as with spouses or partnerships or other business combinations, including, but not limited to, feepayers who are liable through dual determination or successor’s liability, the acceptance of an offer in compromise from one liable feepayer shall reduce the amount of the liability of the other feepayers by the amount of the accepted offer.

(m) Whenever a compromise of fees or penalties or total fees and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the feepayer.

(2) The amount of unpaid fees and related penalties, additions to fees, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the feepayer or violate the confidentiality provisions of Section 46751. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a feepayer or other person liable for the fee.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record or made a false statement, relating to the estate or financial condition of the feepayer or other person liable for the fee.

(2) The feepayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a feepayer or other person liable in respect of the fee.

(2) Receives, withholds, destroys, mutilates, or falsifies a book, document, or record, or makes a false statement, relating to the estate or financial condition of the feepayer or other person liable in respect of the fee.

(p) For purposes of this section, “person” means the feepayer, a member of the feepayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the feepayer, or another corporation or entity owned or controlled by the feepayer, directly or indirectly, or that owns or controls the feepayer, directly or indirectly.

(q) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 89.

Section 46628 of the Revenue and Taxation Code, as amended by Section 12 of Chapter 272 of the Statutes of 2017, is amended to read:

46628.

(a) The director of the department, or their delegates, may compromise any final fee liability.

(c) Offers in compromise shall be considered only for liabilities that were generated from a business that has been discontinued or transferred, where the feepayer making the offer no longer has a controlling interest or association with the transferred business or has a controlling interest or association with a similar type of business as the transferred or discontinued business.

(d) Offers in compromise shall not be considered where the feepayer has been convicted of felony tax evasion under this part during the liability period.

(e) For amounts to be compromised under this section, the following conditions shall exist:

(1) The feepayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the feepayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(f) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final fee liability shall not be subject to administrative appeal or judicial review.

(g) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid fee and fraud or evasion penalty.

(h) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the feepayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the feepayer.

(i) When more than one feepayer is liable for the debt, such as with spouses or partnerships or other business combinations, including, but not limited to, feepayers who are liable through dual determination or successor’s liability, the acceptance of an offer in compromise from one liable feepayer shall reduce the amount of the liability of the other feepayers by the amount of the accepted offer.

(j) Whenever a compromise of fees or penalties or total fees and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the feepayer.

(2) The amount of unpaid fees and related penalties, additions to fees, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the feepayer or violate the confidentiality provisions of Section 40175. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a feepayer or other person liable for the fee.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record, or made a false statement, relating to the estate or financial condition of the feepayer or other person liable for the fee.

(2) The feepayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a feepayer or other person liable in respect of the fee.

(m) For purposes of this section, “person” means the feepayer, a member of the feepayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the feepayer, or another corporation or entity owned or controlled by the feepayer, directly or indirectly, or that owns or controls the feepayer, directly or indirectly.

(n) This section shall become operative on January 1, 2028.

SEC. 90.

Section 50111.5 is added to the Revenue and Taxation Code, to read:

50111.5.

(a) Subject to subdivision (c), if the Governor issues a state of emergency proclamation, the department may extend the time, for a period not to exceed three months, for making any report or return or paying any fee required under this part for any person in an area identified in the state of emergency proclamation.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 91.

Section 50112.2 of the Revenue and Taxation Code is amended to read:

50112.2.

(a) If the department finds that a person’s failure to make a timely report or payment is due to reasonable cause and circumstances beyond the person’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of the penalties provided by Sections 50112, 50112.7, and 50119.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 92.

Section 50112.3 of the Revenue and Taxation Code is amended to read:

50112.3.

(b) Except as provided in subdivision (c), any person seeking to be relieved of the interest provided by Sections 50111, 50112, and 50112.7 shall file with the department a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

SEC. 93.

Section 50136 of the Revenue and Taxation Code is amended to read:

50136.

(a) The department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, 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 these credits or other personal property the amount of any fee, interest, or penalties due from the feepayer or other person, or the amount of any liability incurred under this part, and to transmit the amount withheld to the department 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).

(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.

(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.

SEC. 94.

Section 50139 of the Revenue and Taxation Code is amended to read:

50139.

(a) If the department determines that any amount of fee, interest, or penalty has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in its records and certify the amount collected in excess of what was legally due and the person from whom it was collected or by whom it was paid. The excess amount collected or paid shall be credited on any amounts then due from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors.

SEC. 95.

Section 50151 of the Revenue and Taxation Code is amended to read:

50151.

(a) If any amount has been illegally determined, the department shall certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made and authorize the cancellation of the amount upon the records of the department.

SEC. 96.

Section 50156.15 of the Revenue and Taxation Code is amended to read:

50156.15.

(a) At least 30 days prior to the filing or recording of liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code, the department shall mail to the fee payer a preliminary notice. The notice shall specify the statutory authority of the department for filing or recording the lien, indicate the earliest date on which the lien may be filed or recorded, and state the remedies available to the fee payer to prevent the filing or recording of the lien. In the event fee liens are filed for the same liability in multiple counties, only one preliminary notice shall be sent.

(b) The preliminary notice required by this section shall not be required with respect to jeopardy determinations issued under Article 4 (commencing with Section 50120.1) of Chapter 3.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the fee liability.

(B) Release or subordination will be in the best interest of the state and the fee payer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 97.

Section 50156.18 of the Revenue and Taxation Code, as amended by Section 13 of Chapter 272 of the Statutes of 2017, is amended to read:

50156.18.

(a) Beginning January 1, 2003, the director the department, or their delegates, may compromise any final fee liability.

(b) For purposes of this section, “a final fee liability” means any final fee liability arising under Part 26 (commencing with Section 50101), or related interest, additions to the fee, penalties, or other amounts assessed under this part.

(2) Notwithstanding paragraph (1), a qualified final fee liability may be compromised regardless of whether the business has been discontinued or transferred or whether the feepayer has a controlling interest or association with a similar type of business as the transferred or discontinued business. All other provisions of this section that apply to a final fee liability shall also apply to a qualified final fee liability, and a compromise shall not be made under this subdivision unless all other requirements of this section are met. For purposes of this subdivision, a “qualified final fee liability” means that part of a final fee liability, including related interest, additions to the fee, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the owner of the underground storage tank collected underground storage tank maintenance fee reimbursement from the operator of the underground storage tank or other person and which was determined against the feepayer under Article 2 (commencing with Section 50113) or Article 3 (commencing with Section 50114) of Chapter 3.

(3) A qualified final fee liability may not be compromised with any of the following:

(f) A feepayer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required underground storage tank maintenance fee returns for a five-year period from the date the liability is compromised, or until the feepayer is no longer required to file underground storage tank maintenance fee returns, whichever period is earlier.

(g) For amounts to be compromised under this section, the following conditions shall exist:

(1) The feepayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the feepayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(h) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final fee liability shall not be subject to administrative appeal or judicial review.

(i) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the feepayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the feepayer.

(j) When more than one feepayer is liable for the debt, such as with spouses or partnerships or other business combinations, the acceptance of an offer in compromise from one liable feepayer shall not relieve the other feepayers from paying the entire liability. However, the amount of the liability shall be reduced by the amount of the accepted offer.

(k) Whenever a compromise of the fee or penalties or total fees and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for at least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the feepayer.

(2) The amount of unpaid fees and related penalties, additions to fees, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the feepayer or violate the confidentiality provisions of Chapter 8 (commencing with Section 50159). A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a feepayer or other person liable for the fee.

(2) The feepayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a feepayer or other person liable in respect of the fee.

(n) For purposes of this section, “person” means the feepayer, a member of the feepayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the feepayer, or another corporation or entity owned or controlled by the feepayer, directly or indirectly, or that owns or controls the feepayer, directly or indirectly.

(o) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 98.

Section 50156.18 of the Revenue and Taxation Code, as amended by Section 14 of Chapter 272 of the Statutes of 2017, is amended to read:

50156.18.

(a) The director of the department, or their delegates, may compromise any final fee liability.

(d) For amounts to be compromised under this section, the following conditions shall exist:

(1) The feepayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the feepayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(e) A determination by the department that it would not be in the best interest of the state to accept an offer in compromise in satisfaction of a final fee liability shall not be subject to administrative appeal or judicial review.

(f) When an offer in compromise is either accepted or rejected, or the terms and conditions of a compromise agreement are fulfilled, the department shall notify the feepayer in writing. In the event an offer is rejected, the amount posted will either be applied to the liability or refunded, at the discretion of the feepayer.

(g) When more than one feepayer is liable for the debt, such as with spouses or partnerships or other business combinations, the acceptance of an offer in compromise from one liable feepayer shall not relieve the other feepayers from paying the entire liability. However, the amount of the liability shall be reduced by the amount of the accepted offer.

(h) Whenever a compromise of the fee or penalties or total fees and penalties in excess of five hundred dollars ($500) is approved, there shall be placed on file for a least one year in the office of the director of the department a public record with respect to that compromise. The public record shall include all of the following information:

(1) The name of the feepayer.

(2) The amount of unpaid fees and related penalties, additions to fees, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the feepayer or violate the confidentiality provisions of Chapter 8 (commencing with Section 50159). A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a feepayer or other person liable for the fee.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record, or made any false statement, relating to the estate or financial condition of the feepayer or other person liable for the fee.

(2) The feepayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a feepayer or other person liable in respect of the fee.

(k) For purposes of this section, “person” means the feepayer, a member of the feepayer’s family, a corporation, agent, fiduciary, or representative of, or another individual or entity acting on behalf of, the feepayer, or another corporation or entity owned or controlled by the feepayer, directly or indirectly, or that owns or controls the feepayer, directly or indirectly.

(l) This section shall become operative on January 1, 2028.

SEC. 99.

Section 55041.5 is added to the Revenue and Taxation Code, to read:

55041.5.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 100.

Section 55044 of the Revenue and Taxation Code is amended to read:

55044.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 101.

Section 55046.5 of the Revenue and Taxation Code is amended to read:

55046.5.

(a) If the department finds that a person’s failure to make a timely return or payment was due to a disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the person may be relieved of interest provided by Sections 55041, 55042, 55050, and 55061.

SEC. 102.

Section 55161 of the Revenue and Taxation Code is amended to read:

55161.

At any time within three years after any person is delinquent in the payment of any amount herein required to be paid, or within 10 years after the last recording or filing of a notice of state tax lien under Section 7171 of the Government Code, the department, or its authorized representative, may issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the state under this part. The warrant shall be directed to any sheriff or marshal, or the Department of the California Highway Patrol, and shall have the same effect as a writ of execution. The warrant shall be levied and sale made pursuant to it in the manner and with the same effect as a levy of, and sale pursuant to, a writ of execution.

SEC. 103.

Section 55162 of the Revenue and Taxation Code is amended to read:

55162.

The department may pay or advance to the sheriff, marshal, or Department of the California Highway Patrol the same fees, commissions, and expenses for their services as are provided by law for similar services pursuant to writ of execution. The department, and not the court, shall approve the fees for publication in a newspaper.

SEC. 104.

Section 55205 of the Revenue and Taxation Code is amended to read:

55205.

(a) The department may, by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to the feepayer or other person liable for any amount under this part to withhold from these credits or other personal property the amount of the fee, interest, or penalties due from the feepayer or other person, or the amount of any liability incurred under this part, and to transmit the amount withheld to the department 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 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.

(c) 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.

(d) In the case of a financial institution, to be effective, the notice shall state the amount due from the feepayer and shall be delivered, mailed, or served by electronic transmission or other electronic technology, to the branch office of the financial institution where the credits or other property are held, unless another branch or office is designated by the financial institution to receive the notice.

SEC. 105.

Section 55221 of the Revenue and Taxation Code is amended to read:

55221.

(a) If the department determines that any amount of the fee, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in its records and certify the amount collected in excess of what was legally due and the person from whom it was collected or by whom paid. The excess amount collected or paid shall be credited on any amounts then due from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors.

SEC. 106.

Section 55281 of the Revenue and Taxation Code is amended to read:

55281.

SEC. 107.

Section 55332.5 of the Revenue and Taxation Code, as amended by Section 15 of Chapter 272 of the Statutes of 2017, is amended to read:

55332.5.

(a) Beginning on January 1, 2007, the director of the department, or their delegates, may compromise any final fee liability.

(b) For purposes of this section, “a final fee liability” means any final fee liability arising under Part 30 (commencing with Section 55001), or related interest, additions to fees, penalties, or other amounts assessed under this part.

(2) Notwithstanding paragraph (1), a qualified final fee liability may be compromised regardless of whether the business has been discontinued or transferred or whether the feepayer has a controlling interest or association with a similar type of business as the transferred or discontinued business. All other provisions of this section that apply to a final fee liability shall also apply to a qualified final fee liability, and a compromise shall not be made under this subdivision unless all other requirements of this section are met. For purposes of this subdivision, a “qualified final fee liability” means that part of a final fee liability, including related interest, additions to fees, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the feepayer collected the fee from the purchaser or other person and which was determined against the feepayer under Article 2 (commencing with Section 55061) or Article 3 (commencing with Section 55081) of Chapter 3.

(3) A qualified final fee liability may not be compromised with any of the following:

(f) A feepayer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required returns for a five-year period from the date the liability is compromised, or until the feepayer is no longer required to file returns, whichever period is earlier.

(g) Offers in compromise shall not be considered where the feepayer has been convicted of felony tax evasion under this part during the liability period.

(h) For amounts to be compromised under this section, the following conditions shall exist:

(1) The feepayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the feepayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(j) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid fee and fraud or evasion penalty.

(1) The name of the feepayer.

(2) The amount of unpaid fees and related penalties, additions to fees, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the feepayer or violate the confidentiality provisions of Section 55381. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a feepayer or other person liable for the fee.

(2) The feepayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a feepayer or other person liable in respect of the fee.

(q) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 108.

Section 55332.5 of the Revenue and Taxation Code, as amended by Section 16 of Chapter 272 of the Statutes of 2017, is amended to read:

55332.5.

(a) The director of the department, or their delegates, may compromise any final fee liability.

(d) Offers in compromise shall not be considered where the feepayer has been convicted of felony tax evasion under this part during the liability period.

(e) For amounts to be compromised under this section, the following conditions shall exist:

(1) The feepayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the feepayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(g) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid fee and fraud or evasion penalty.

(1) The name of the feepayer.

(2) The amount of unpaid fees and related penalties, additions to fees, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the feepayer or violate the confidentiality provisions of Section 55381. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a feepayer or other person liable for the fee.

(2) The feepayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a feepayer or other person liable in respect of the fee.

(n) This section shall become operative on January 1, 2028.

SEC. 109.

Section 55336 of the Revenue and Taxation Code is amended to read:

55336.

(b) The preliminary notice required by this section shall not apply to jeopardy determinations issued under Article 4 (commencing with Section 55101) of Chapter 3.

(c) If the department determines that filing a lien was in error, it shall mail a release to the taxpayer and the entity recording the lien as soon as possible, but not later than seven days, after this determination and receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the taxpayer and the entity recording the lien.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the tax liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 110.

Section 60208.5 is added to the Revenue and Taxation Code, to read:

60208.5.

(b) If the department makes an extension pursuant to subdivision (a), any person in an area identified in a state of emergency proclamation shall not be required to file a request for the extension.

SEC. 111.

Section 60209 of the Revenue and Taxation Code is amended to read:

60209.

(b) Except as provided in subdivisions (c) and (d), any person seeking to be relieved of the penalty shall file with the board a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

(d) The department shall establish criteria that provide for efficient resolution of requests for relief pursuant to this section.

SEC. 112.

Section 60211 of the Revenue and Taxation Code is amended to read:

60211.

(b) Except as provided in subdivision (c), person seeking to be relieved of the interest shall file with the department a statement under penalty of perjury setting forth the facts upon which the person bases the claim for relief.

SEC. 113.

Section 60407 of the Revenue and Taxation Code is amended to read:

60407.

(a) Subject to the limitations in subdivisions (b) and (c), the department may by notice of levy, served personally, by first-class mail, or by electronic transmission or other electronic technology, require all persons having in their possession, or under their control, any payments, credits other than payments, or other personal property belonging to a person liable for any amount under this part to withhold from those credits or other personal property the amount of any tax, interest, or penalties due from that person, or the amount of any liability incurred by the person under this part, and to transmit the amount withheld to the department at those times as 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).

(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, “payment” 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. “Payment” does include any of the following:

(1) Any payment due for services of an independent contractor, dividends, rents, royalties, residuals, patent rights, or mineral or other natural rights.

(2) Any payment or credit due or becoming due periodically as the result of an enforceable obligation to the person liable for the tax.

(3) Any other payment or credit due or becoming due the person liable as the result of a written or oral contract for services or sales whether denominated as wages, salary, commission, bonus, or otherwise.

SEC. 114.

Section 60521 of the Revenue and Taxation Code is amended to read:

60521.

If the department determines that any amount not required to be paid under this part has been paid by any person to the state, the department shall set forth that fact in its records and certify the amount paid in excess of the amount legally due and the person by whom the excess was paid to the department or from whom it was collected. The excess amount paid or collected shall be credited on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall either be refunded to the person, or the person’s successors, administrators, executors, or assigns, or, if authorized by the department, deducted by the person from any amounts to become due from the person under this part.

SEC. 115.

Section 60581 of the Revenue and Taxation Code is amended to read:

60581.

If any amount has been illegally determined either by the person filing the return or by the department, the department shall set forth that fact in its records and certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made.

SEC. 116.

Section 60633.2 of the Revenue and Taxation Code is amended to read:

60633.2.

(a) At least 30 days prior to the filing or recording of liens under Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code, the department shall mail to the taxpayer a preliminary notice. The notice shall specify the statutory authority of the department for filing or recording the lien, indicate the earliest date on which the lien may be filed or recorded, and state the remedies available to the taxpayer to prevent the filing or recording of the lien. In the event the tax liens are filed for the same liability in multiple counties, only one preliminary notice shall be sent.

(b) The preliminary notice required by this action shall not apply to jeopardy determinations issued under Article 4 (commencing with Section 60330) of Chapter 6.

(c) If the department determines that filing a lien was in error, it shall mail a release to the taxpayer and the entity recording the lien as soon as possible, but no later than seven days, after this determination and receipt of lien recording information. The release shall contain a statement that the lien was filed in error. In the event the erroneous lien is obstructing a lawful transaction, the department shall immediately issue a release of lien to the taxpayer and the entity recording the lien.

(e) (1) The department may release or subordinate a lien if the department determines any of the following:

(A) Release or subordination will facilitate the collection of the tax liability.

(B) Release or subordination will be in the best interest of the state and the taxpayer.

(2) The amendments added to this subdivision do not constitute a change in, and are declaratory of, existing law.

SEC. 117.

Section 60637 of the Revenue and Taxation Code, as amended by Section 17 of Chapter 272 of the Statutes of 2017, is amended to read:

60637.

(a) Beginning on January 1, 2007, the director of the department, or their delegates, may compromise any final tax liability.

(b) For purposes of this section, “a final tax liability” means any final tax liability arising under Part 31 (commencing with Section 60001), or related interest, additions to tax, penalties, or other amounts assessed under this part.

(A) That part of a final tax liability, including related interest, additions to tax, penalties, or other amounts assessed under this part, arising from a transaction or transactions in which the department finds no evidence that the supplier collected diesel fuel tax reimbursement from the purchaser or other person and which was determined by the department against the taxpayer under Article 2 (commencing with Section 60301), Article 3 (commencing with Section 60310), Article 5 (commencing with Section 60350), or Article 6 (commencing with Section 60360) of Chapter 6.

(B) A final tax liability, including related interest, additions to tax, penalties, or other amounts assessed under this part, arising under Article 6 (commencing with Section 60471) of Chapter 7.

(C) That part of a final tax liability for diesel fuel tax, including related interest, additions to tax, penalties, or other amounts assessed under this part, determined under Article 2 (commencing with Section 60301), Article 3 (commencing with Section 60310), Article 5 (commencing with Section 60350), and Article 6 (commencing with Section 60360) of Chapter 6 against an exempt bus operator, government entity, or qualified highway vehicle operator who used dyed diesel fuel on the highway.

(3) A qualified final tax liability may not be compromised with any of the following:

(d) The department may, in its discretion, enter into a written agreement that permits the taxpayer to pay the compromise in installments for a period not exceeding one year. The agreement may provide that such installments shall be paid by electronic funds transfers or any other means to facilitate the payment of each installment.

(f) A taxpayer that has received a compromise under paragraph (2) of subdivision (c) shall file and pay by the due date all subsequently required returns for a five-year period from the date the liability is compromised, or until the taxpayer is no longer required to file returns, whichever period is earlier.

(g) Offers in compromise shall not be considered where the taxpayer has been convicted of felony tax evasion under this part during the liability period.

(h) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(j) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid tax and fraud or evasion penalty.

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 60609. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that a person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(q) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

SEC. 118.

Section 60637 of the Revenue and Taxation Code, as amended by Section 18 of Chapter 272 of the Statutes of 2017, is amended to read:

60637.

(a) The director of the department, or their delegates, may compromise any final tax liability.

(d) Offers in compromise shall not be considered where the taxpayer has been convicted of felony tax evasion under this part during the liability period.

(e) For amounts to be compromised under this section, the following conditions shall exist:

(1) The taxpayer shall establish that:

(A) The amount offered in payment is the most that can be expected to be paid or collected from the taxpayer’s present assets or income.

(2) The department shall have determined that acceptance of the compromise is in the best interest of the state.

(g) (1) Offers for liabilities with a fraud or evasion penalty shall require a minimum offer of the unpaid tax and fraud or evasion penalty.

(1) The name of the taxpayer.

(2) The amount of unpaid tax and related penalties, additions to tax, interest, or other amounts involved.

(3) The amount offered.

(4) A summary of the reason why the compromise is in the best interest of the state.

The public record shall not include any information that relates to any trade secrets, patent, process, style of work, apparatus, business secret, or organizational structure, that if disclosed, would adversely affect the taxpayer or violate the confidentiality provisions of Section 60609. A list shall not be prepared and releases shall not be distributed by the department in connection with these statements.

(1) The department determines that any person did any of the following acts regarding the making of the offer:

(A) Concealed from the department property belonging to the estate of a taxpayer or other person liable for the tax.

(B) Received, withheld, destroyed, mutilated, or falsified a book, document, or record, or made any false statement, relating to the estate or financial condition of the taxpayer or other person liable for the tax.

(2) The taxpayer fails to comply with any of the terms and conditions relative to the offer.

(1) Conceals from an officer or employee of this state property belonging to the estate of a taxpayer or other person liable in respect of the tax.

(n) This section shall become operative on January 1, 2028.

SEC. 119.

The Legislature finds and declares that Sections 8, 9, 16, 17, 22, 23, 33, 34, 48, 49, 53, 54, 61, 62, 71, 72, 78, 79, 85, 86, 94, 95, 105, 106, 114, and 115 of this act, which amend Sections 6901, 6981, 8126, 8191, 9151, 9196, 30361, 30421, 38601, 38631, 40111, 40121, 41100, 41107, 43451, 43491, 45651, 45801, 46501, 46551, 50139, 50151, 55221, 55281, 60521, and 60581 of the Revenue and Taxation Code, impose a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

The state has a very strong interest in ensuring the timely refund and cancellation of taxation amounts illegally determined by the person filing the return or by the department. In order to protect this interest, it is necessary to allow the California Department of Tax and Fee Administration to make these determinations available as public records for amounts in excess of fifty thousand dollars ($50,000) for at least 10 days after the effective date of the determination.

SEC. 120.

Section 1.5 of this bill incorporates amendments to Section 830.11 of the Penal Code proposed by both this bill and Senate Bill 1498. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2023, (2) each bill amends Section 830.11 of the Penal Code, and (3) this bill is enacted after Senate Bill 1498, in which case Section 1 of this bill shall not become operative.

SEC. 121.

Section 61.5 of this bill incorporates amendments to Section 41100 of the Revenue and Taxation Code proposed by both this bill and Assembly Bill 988. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2023, but this bill becomes operative first, (2) each bill amends Section 41100 of the Revenue and Taxation Code, and (3) this bill is enacted after Assembly Bill 988, in which case Section 41100 of the Revenue and Taxation Code, as amended by Section 61 of this bill, shall remain operative only until the operative date of Assembly Bill 988, at which time Section 61.5 of this bill shall become operative.

SEC. 122.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SEC. 123.

The Legislature finds and declares that this act furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.

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Bill Text: CA SB1496 | 2021-2022 | Regular Session | Chaptered

California Senate Bill 1496 (Prior Session Legislation)

LEGISLATIVE COUNSEL'S DIGEST

Digest Key

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

830.11.

SEC. 1.5.

830.11.

SEC. 2.

6295.

SEC. 3.

6459.5.

SEC. 4.

6592.

SEC. 5.

6593.

SEC. 6.

6593.5.

SEC. 7.

6703.

SEC. 8.

6901.

SEC. 9.

6981.

SEC. 10.

7093.6.

SEC. 11.

7093.6.

SEC. 12.

7097.

SEC. 13.

7656.5.

SEC. 14.

7657.

SEC. 15.

7658.

SEC. 16.

8126.

SEC. 17.

8191.

SEC. 18.

8754.5.

SEC. 19.

8877.

SEC. 20.

8878.

SEC. 21.

8957.

SEC. 22.

9151.

SEC. 23.

9196.

SEC. 24.

9275.

SEC. 25.

9278.

SEC. 26.

9278.

SEC. 27.

12221.

SEC. 28.

SEC. 29.

30185.5.

SEC. 30.

30282.

SEC. 31.

30283.

SEC. 32.

30315.

SEC. 33.

30361.

SEC. 34.

30421.

SEC. 35.

30459.15.

SEC. 36.

30459.15.