Bill Text: CA SB76 | 2009-2010 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Committee on Public Safety: Inmates: incentive credits.
Spectrum: Unknown
Status: (Passed) 2010-09-28 - Chaptered by Secretary of State. Chapter 426, Statutes of 2010. [SB76 Detail]
Download: California-2009-SB76-Amended.html
Bill Title: Committee on Public Safety: Inmates: incentive credits.
Spectrum: Unknown
Status: (Passed) 2010-09-28 - Chaptered by Secretary of State. Chapter 426, Statutes of 2010. [SB76 Detail]
Download: California-2009-SB76-Amended.html
BILL NUMBER: SB 76 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 24, 2009
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 20, 2009
An act relating to the Budget Act of 2009.
An act to amend Sections 17276, 17276.9, 17276.10, 23663, 24416,
24416.9, 24416.10, 30016, 30104, 30108, 30165.1, 30181, and 30436 of,
to add Article 2.5 (commencing with Section 30130.3) to Chapter 2 of
Part 13 of, and to add Part 21 (commencing with Section
42001) to, Division 2 of, the Revenue and Taxation Code, relating to
taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 76, as amended, Committee on Budget and Fiscal Review.
Budget Act of 2009. Income taxation: NOLs: credits:
cigarettes and other tobacco products tax: oil severance tax.
(1) Existing law allows individual and corporate taxpayers to
utilize net operating losses and carryovers of those losses for
purposes of offsetting their individual and corporate tax
liabilities. Existing law allows net operating losses attributable to
taxable years beginning on or after January 1, 2011, to be
carrybacks to each of the preceding 2 taxable years.
This bill would delete those net operating loss carryback
provisions.
(2) The Corporation Tax Law provides for taxable years beginning
on or after July 1, 2008, that any credit that is an eligible credit,
as defined, may be assigned to any eligible assignee, as defined.
This bill would provide that the credits may be assigned only on
an original return that is filed on or before the effective date of
this bill.
(3) The Cigarette and Tobacco Products Tax Law, the violation of
which is a crime, imposes a tax on every distributor of cigarettes
and tobacco products at specified rates, including additional taxes
imposed under the Tobacco Tax and Health Protection Act of 1988
(Proposition 99) and the California Families and Children Act of 1998
(Proposition 10). That law imposes a tax upon the distribution of
tobacco products at a tax rate which is equivalent to the combined
rate of all taxes imposed on cigarettes, which is deposited in
specified accounts.
This bill would, commencing on October 1, 2009, impose an
additional excise tax on the distribution of cigarettes at the rate
of $0.075 for each cigarette distributed, which would, under
Proposition 99, impose an equivalent tax rate on the distribution of
tobacco products. This bill would also impose a tax upon the
distribution of tobacco products at the same equivalent tax rate. The
bill would impose a floor stock tax and require a dealer or
wholesaler to file a return with the State Board of Equalization
showing the number of cigarettes in his or her possession or under
his or her control on that date, as specified, and to remit the tax
to the board. The revenues collected from the additional tax, except
as specified, would be deposited in the General Fund.
Because this bill would impose new requirements under the
Cigarette and Tobacco Products Law, the violation of which is a
crime, it would impose a state-mandated local program.
(4) Existing law imposes various taxes, including taxes on the
privilege of engaging in certain activities. The Fee Collection
Procedures Law, the violation of which is a crime, provides
procedures for the collection of certain fees and surcharges.
This bill would impose an oil severance tax on and after October
1, 2009, upon any producer for the privilege of severing oil from the
earth or water in this state for sale, transport, consumption,
storage, profit, or use, as provided, at the rate of 9.9% of the
gross value of each barrel of oil severed. The tax would be
administered by the Department of Conservation and would be collected
pursuant to the procedures set forth in the Fee Collection
Procedures Law. The bill would require the department to deposit all
tax revenues, penalties, and interest collected pursuant to these
provisions into the General Fund.
Because this bill would expand the scope of the Fee Collection
Procedures Law, the violation of which is a crime, it would impose a
state-mandated local program.
(5) 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.
(6) This bill would result in a change in state taxes for the
purpose of increasing state revenues within the meaning of Section 3
of Article XIII A of the California Constitution, and thus would
require for passage the approval of 2/3 of the membership of each
house of the Legislature.
(7) This bill would take effect immediately as a tax levy.
This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2009.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: no yes .
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17276 of the Revenue
and Taxation Code is amended to read:
17276. Except as provided in Sections 17276.1, 17276.2, 17276.4,
17276.5, 17276.6, and 17276.7, the deduction provided by Section 172
of the Internal Revenue Code, relating to a net operating loss
deduction, shall be modified as follows:
(a) (1) Net operating losses attributable to taxable years
beginning before January 1, 1987, shall not be allowed.
(2) A net operating loss shall not be carried forward to any
taxable year beginning before January 1, 1987.
(b) (1) Except as provided in paragraphs (2) and (3), the
provisions of Section 172(b)(2) of the Internal Revenue Code,
relating to the amount of carryovers, shall be modified so that the
applicable percentage of the entire amount of the net operating loss
for any taxable year shall be eligible for carryover to any
subsequent taxable year. For purposes of this subdivision, the
applicable percentage shall be:
(A) Fifty percent for any taxable year beginning before January 1,
2000.
(B) Fifty-five percent for any taxable year beginning on or after
January 1, 2000, and before January 1, 2002.
(C) Sixty percent for any taxable year beginning on or after
January 1, 2002, and before January 1, 2004.
(D) One hundred percent for any taxable year beginning on or after
January 1, 2004.
(2) In the case of a taxpayer who has a net operating loss in any
taxable year beginning on or after January 1, 1994, and who operates
a new business during that taxable year, each of the following shall
apply to each loss incurred during the first three taxable years of
operating the new business:
(A) If the net operating loss is equal to or less than the net
loss from the new business, 100 percent of the net operating loss
shall be carried forward as provided in subdivision (d).
(B) If the net operating loss is greater than the net loss from
the new business, the net operating loss shall be carried over as
follows:
(i) With respect to an amount equal to the net loss from the new
business, 100 percent of that amount shall be carried forward as
provided in subdivision (d).
(ii) With respect to the portion of the net operating loss that
exceeds the net loss from the new business, the applicable percentage
of that amount shall be carried forward as provided in subdivision
(d).
(C) For purposes of Section 172(b)(2) of the Internal Revenue
Code, the amount described in clause (ii) of subparagraph (B) shall
be absorbed before the amount described in clause (i) of subparagraph
(B).
(3) In the case of a taxpayer who has a net operating loss in any
taxable year beginning on or after January 1, 1994, and who operates
an eligible small business during that taxable year, each of the
following shall apply:
(A) If the net operating loss is equal to or less than the net
loss from the eligible small business, 100 percent of the net
operating loss shall be carried forward to the taxable years
specified in subdivision (d).
(B) If the net operating loss is greater than the net loss from
the eligible small business, the net operating loss shall be carried
over as follows:
(i) With respect to an amount equal to the net loss from the
eligible small business, 100 percent of that amount shall be carried
forward as provided in subdivision (d).
(ii) With respect to that portion of the net operating loss that
exceeds the net loss from the eligible small business, the applicable
percentage of that amount shall be carried forward as provided in
subdivision (d).
(C) For purposes of Section 172(b)(2) of the Internal Revenue
Code, the amount described in clause (ii) of subparagraph (B) shall
be absorbed before the amount described in clause (i) of subparagraph
(B).
(4) In the case of a taxpayer who has a net operating loss in a
taxable year beginning on or after January 1, 1994, and who operates
a business that qualifies as both a new business and an eligible
small business under this section, that business shall be treated as
a new business for the first three taxable years of the new business.
(5) In the case of a taxpayer who has a net operating loss in a
taxable year beginning on or after January 1, 1994, and who operates
more than one business, and more than one of those businesses
qualifies as either a new business or an eligible small business
under this section, paragraph (2) shall be applied first, except that
if there is any remaining portion of the net operating loss after
application of clause (i) of subparagraph (B) of that paragraph,
paragraph (3) shall be applied to the remaining portion of the net
operating loss as though that remaining portion of the net operating
loss constituted the entire net operating loss.
(6) For purposes of this section, the term "net loss" means the
amount of net loss after application of Sections 465 and 469 of the
Internal Revenue Code.
(c) Section 172(b)(1) of the Internal Revenue Code, relating to
net operating loss carrybacks and carryovers and the years to which
the loss may be carried, is modified as follows:
(1)
(c) Net operating loss carrybacks shall not be allowed
for any net operating losses attributable to taxable years
beginning before January 1, 2011 .
(2) A net operating loss attributable to taxable years beginning
on or after January 1, 2011, shall be a net operating loss carryback
to each of the two taxable years preceding the taxable year of the
loss in lieu of the number of years provided therein.
(A) For a net operating loss attributable to a taxable year
beginning on or after January 1, 2011, and before January 1, 2012,
the amount of carryback to any taxable year shall not exceed 50
percent of the net operating loss.
(B) For a net operating loss attributable to a taxable year
beginning on or after January 1, 2012, and before January 1, 2013,
the amount of carryback to any taxable year shall not exceed 75
percent of the net operating loss.
(C) For a net operating loss attributable to a taxable year
beginning on or after January 1, 2013, the amount of carryback to any
taxable year shall not exceed 100 percent of the net operating loss.
(3) Notwithstanding paragraph (2), Section 172(b)(1)(B) of the
Internal Revenue Code, relating to special rules for REITs, and
Sections 172(b)(1)(E) and 172(h) of the Internal Revenue Code,
relating to corporate equity reduction interest loss, shall apply as
provided.
(4) A net operating loss carryback shall not be carried back to
any taxable year beginning before January 1, 2009.
(d) (1) (A) For a net operating loss for any taxable year
beginning on or after January 1, 1987, and before January 1, 2000,
Section 172(b)(1)(A)(ii) of the Internal Revenue Code, relating to
years to which net operating losses may be carried, is modified to
substitute "five taxable years" in lieu of "20 taxable years" except
as otherwise provided in paragraphs (2) and (3).
(B) For a net operating loss for any taxable year beginning on or
after January 1, 2000, and before January 1, 2008, Section 172(b)(1)
(A)(ii) of the Internal Revenue Code, relating to years to which net
operating losses may be carried, is modified to substitute "10
taxable years" in lieu of "20 taxable years."
(2) For any taxable year beginning before January 1, 2000, in the
case of a "new business," the "five taxable years" in paragraph (1)
shall be modified to read as follows:
(A) "Eight taxable years" for a net operating loss attributable to
the first taxable year of that new business.
(B) "Seven taxable years" for a net operating loss attributable to
the second taxable year of that new business.
(C) "Six taxable years" for a net operating loss attributable to
the third taxable year of that new business.
(3) For any carryover of a net operating loss for which a
deduction is denied by Section 17276.3, the carryover period
specified in this subdivision shall be extended as follows:
(A) By one year for a net operating loss attributable to taxable
years beginning in 1991.
(B) By two years for a net operating loss attributable to taxable
years beginning prior to January 1, 1991.
(4) The net operating loss attributable to taxable years beginning
on or after January 1, 1987, and before January 1, 1994, shall be a
net operating loss carryover to each of the 10 taxable years
following the year of the loss if it is incurred by a taxpayer that
is under the jurisdiction of the court in a Title 11 or similar case
at any time during the income year. The loss carryover provided in
the preceding sentence shall not apply to any loss incurred after the
date the taxpayer is no longer under the jurisdiction of the court
in a Title 11 or similar case.
(e) For purposes of this section:
(1) "Eligible small business" means any trade or business that has
gross receipts, less returns and allowances, of less than one
million dollars ($1,000,000) during the taxable year.
(2) Except as provided in subdivision (f), "new business" means
any trade or business activity that is first commenced in this state
on or after January 1, 1994.
(3) "Title 11 or similar case" shall have the same meaning as in
Section 368(a)(3) of the Internal Revenue Code.
(4) In the case of any trade or business activity conducted by a
partnership or "S" corporation paragraphs (1) and (2) shall be
applied to the partnership or "S" corporation.
(f) For purposes of this section, in determining whether a trade
or business activity qualifies as a new business under paragraph (2)
of subdivision (e), the following rules shall apply:
(1) In any case where a taxpayer purchases or otherwise acquires
all or any portion of the assets of an existing trade or business
(irrespective of the form of entity) that is doing business in this
state (within the meaning of Section 23101), the trade or business
thereafter conducted by the taxpayer (or any related person) shall
not be treated as a new business if the aggregate fair market value
of the acquired assets (including real, personal, tangible, and
intangible property) used by the taxpayer (or any related person) in
the conduct of its trade or business exceeds 20 percent of the
aggregate fair market value of the total assets of the trade or
business being conducted by the taxpayer (or any related person). For
purposes of this paragraph only, the following rules shall apply:
(A) The determination of the relative fair market values of the
acquired assets and the total assets shall be made as of the last day
of the first taxable year in which the taxpayer (or any related
person) first uses any of the acquired trade or business assets in
its business activity.
(B) Any acquired assets that constituted property described in
Section 1221(1) of the Internal Revenue Code in the hands of the
transferor shall not be treated as assets acquired from an existing
trade or business, unless those assets also constitute property
described in Section 1221(1) of the Internal Revenue Code in the
hands of the acquiring taxpayer (or related person).
(2) In any case where a taxpayer (or any related person) is
engaged in one or more trade or business activities in this state, or
has been engaged in one or more trade or business activities in this
state within the preceding 36 months ("prior trade or business
activity"), and thereafter commences an additional trade or business
activity in this state, the additional trade or business activity
shall only be treated as a new business if the additional trade or
business activity is classified under a different division of the
Standard Industrial Classification (SIC) Manual published by the
United States Office of Management and Budget, 1987 edition, than are
any of the taxpayer's (or any related person's) current or prior
trade or business activities.
(3) In any case where a taxpayer, including all related persons,
is engaged in trade or business activities wholly outside of this
state and the taxpayer first commences doing business in this state
(within the meaning of Section 23101) after December 31, 1993 (other
than by purchase or other acquisition described in paragraph (1)),
the trade or business activity shall be treated as a new business
under paragraph (2) of subdivision (e).
(4) In any case where the legal form under which a trade or
business activity is being conducted is changed, the change in form
shall be disregarded and the determination of whether the trade or
business activity is a new business shall be made by treating the
taxpayer as having purchased or otherwise acquired all or any portion
of the assets of an existing trade or business under the rules of
paragraph (1) of this subdivision.
(5) "Related person" shall mean any person that is related to the
taxpayer under either Section 267 or 318 of the Internal Revenue
Code.
(6) "Acquire" shall include any gift, inheritance, transfer
incident to divorce, or any other transfer, whether or not for
consideration.
(7) (A) For taxable years beginning on or after January 1, 1997,
the term "new business" shall include any taxpayer that is engaged in
biopharmaceutical activities or other biotechnology activities that
are described in Codes 2833 to 2836, inclusive, of the Standard
Industrial Classification (SIC) Manual published by the United States
Office of Management and Budget, 1987 edition, and as further
amended, and that has not received regulatory approval for any
product from the United States Food and Drug Administration.
(B) For purposes of this paragraph:
(i) "Biopharmaceutical activities" means those activities that use
organisms or materials derived from organisms, and their cellular,
subcellular, or molecular components, in order to provide
pharmaceutical products for human or animal therapeutics and
diagnostics. Biopharmaceutical activities make use of living
organisms to make commercial products, as opposed to pharmaceutical
activities that make use of chemical compounds to produce commercial
products.
(ii) "Other biotechnology activities" means activities consisting
of the application of recombinant DNA technology to produce
commercial products, as well as activities regarding pharmaceutical
delivery systems designed to provide a measure of control over the
rate, duration, and site of pharmaceutical delivery.
(g) In computing the modifications under Section 172(d)(2) of the
Internal Revenue Code, relating to capital gains and losses of
taxpayers other than corporations, the exclusion provided by Section
18152.5 shall not be allowed.
(h) Notwithstanding any provisions of this section to the
contrary, a deduction shall be allowed to a "qualified taxpayer" as
provided in Sections 17276.1, 17276.2, 17276.4, 17276.5, 17276.6, and
17276.7.
(i) The Franchise Tax Board may prescribe appropriate regulations
to carry out the purposes of this section, including any regulations
necessary to prevent the avoidance of the purposes of this section
through splitups, shell corporations, partnerships, tiered ownership
structures, or otherwise.
(j) The Franchise Tax Board may reclassify any net operating loss
carryover determined under either paragraph (2) or (3) of subdivision
(b) as a net operating loss carryover under paragraph (1) of
subdivision (b) upon a showing that the reclassification is necessary
to prevent evasion of the purposes of this section.
(k) Except as otherwise provided, the amendments made by Chapter
107 of the Statutes of 2000 shall apply to net operating losses for
taxable years beginning on or after January 1, 2000.
SEC. 2. Section 17276.9 of the Revenue
and Taxation Code is amended to read:
17276.9. (a) Notwithstanding Sections 17276, 17276.1, 17276.2,
17276.4, 17276.5, 17276.6, and 17276.7 of this code and Section 172
of the Internal Revenue Code, no net operating loss deduction shall
be allowed for any taxable year beginning on or after January 1,
2008, and before January 1, 2010.
(b) For any net operating loss or carryover of a net operating
loss for which a deduction is denied by subdivision (a), the
carryover period under Section 172 of the Internal Revenue Code shall
be extended as follows:
(1) By one year, for losses incurred in taxable years beginning on
or after January 1, 2008, and before January 1, 2009.
(2) By two years, for losses incurred in taxable years beginning
before January 1, 2008.
(c) Notwithstanding subdivision (a), a net operating loss
deduction shall be allowed for carryback of a net operating loss
attributable to a taxable year beginning on or after January 1, 2011.
(d)
(c) The provisions of this section shall not apply to a
taxpayer with net business income of less than five hundred thousand
dollars ($500,000) for the taxable year. For purposes of this
subdivision, business income means:
(1) Income from a trade or business, whether conducted by the
taxpayer or by a passthrough entity owned directly or indirectly by
the taxpayer. For purposes of this paragraph, the term "passthrough
entity" means a partnership or an "S" corporation.
(2) Income from rental activity.
(3) Income attributable to a farming business.
SEC. 3. Section 17276.10 of the Revenue
and Taxation Code is amended to read:
17276.10. Notwithstanding Section 17276.1, 17276.2, 17276.4,
17276.5, 17276.6, or 17276.7 to the contrary, a net operating loss
attributable to a taxable year beginning on or after January 1, 2008,
shall be a net operating carryover to each of the 20 taxable years
following the year of the loss , and a net operating loss
attributable to a taxable year beginning on or after January 1, 2011,
shall also be a net operating loss carryback to each of the two
taxable years preceding the taxable year of loss .
SEC. 4. Section 23663 of the Revenue
and Taxation Code is amended to read:
23663. (a) (1) Notwithstanding any other law to the contrary, for
each taxable year beginning on or after July 1, 2008, any credit
allowed to a taxpayer under this chapter that is an "eligible credit
(within the meaning of paragraph (2) of subdivision (b)) may be
assigned by that taxpayer to any "eligible assignee" (within the
meaning of paragraph (3) of subdivision (b)).
(2) A credit assigned under paragraph (1) may only be applied by
the eligible assignee against the "tax" of the eligible assignee in a
taxable year beginning on or after January 1, 2010.
(3) Except as specifically provided in this section, following an
assignment of any eligible credit under this section, the eligible
assignee shall be treated as if it was originally
earned allowed the assigned credit.
(b) For purposes of this section, the following definitions shall
apply:
(1) "Affiliated corporation" means a corporation that is a member
of a commonly controlled group as defined in Section 25105.
(2) "Eligible credit" shall mean means
either of the following :
(A) Any credit earned allowed to by
the taxpayer in a taxable year beginning on or after July 1, 2008,
or .
(B) Any credit earned allowed in any
taxable year beginning before July 1, 2008, that is eligible to be
carried forward to the taxpayer's first taxable year beginning on or
after July 1, 2008, under the provisions of this
part.
(3) "Eligible assignee" shall mean means
any affiliated corporation that is properly treated as a member
of the same combined reporting group pursuant to Section 25101 or
25110 as the taxpayer assigning the eligible credit as of:
(A) In the case of credits earned allowed
in taxable years beginning before July 1, 2008:
(i) June 30, 2008, and
(ii) The last day of the taxable year of the assigning taxpayer in
which the eligible credit is assigned.
(B) In the case of credits earned allowed
in taxable years beginning on or after July 1, 2008 .
:
(i) The last day of the first taxable year in which the credit was
allowed to the taxpayer, and
(ii) The last day of the taxable year of the assigning taxpayer in
which the eligible credit is assigned.
(c) (1) (A) The election to assign any
credit under subdivision (a) shall be irrevocable once made, and
shall be made by the taxpayer allowed that credit on its original
return for the taxable year in which the assignment is made.
(B) A credit may be assigned under subdivision (a) only on an
original return for a taxable year beginning on or after July 1,
2008, that was filed on or before the effective date of the act
adding this subparagraph.
(2) The taxpayer assigning any credit under this section shall
reduce the amount of its unused credit by the face amount of any
credit assigned under this section, and the amount of the assigned
credit shall not be available for application against the assigning
taxpayer's "tax" in any taxable year, nor shall it thereafter be
included in the amount of any credit carryover of the assigning
taxpayer.
(3) The eligible assignee of any credit under this section may
apply all or any portion of the assigned credits against the "tax"
(as defined in Section 23036) of the eligible assignee for the
taxable year in which the assignment occurs, or any subsequent
taxable year, subject to any carryover period limitations that apply
to the assigned credit and also subject to the limitation in
paragraph (2) of subdivision (a).
(4) In no case may the eligible assignee sell, otherwise transfer,
or thereafter assign the assigned credit to any other taxpayer.
(d) (1) No consideration shall be required to be paid by the
eligible assignee to the assigning taxpayer for assignment of any
credit under this section.
(2) In the event that any consideration is paid by the eligible
assignee to the assigning taxpayer for the transfer of an eligible
credit under this section, then:
(A) No deduction shall be allowed to the eligible assignee under
this part with respect to any amounts so paid, and
(B) No amounts so received by the assigning taxpayer shall be
includable in gross income under this part.
(e) (1) The Franchise Tax Board shall specify the form and manner
in which the election required under this section shall be made, as
well as any necessary information that shall be required to be
provided by the taxpayer assigning the credit to the eligible
assignee.
(2) Any taxpayer who assigns any credit under this section shall
report any information, in the form and manner specified by the
Franchise Tax Board, necessary to substantiate any credit assigned
under this section and verify the assignment and subsequent
application of any assigned credit.
(3) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code shall not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to paragraphs (1) and (2).
(4) The Franchise Tax Board may issue any regulations necessary to
implement the purposes of this section, including any regulations
necessary to specify the treatment of any assignment that does not
comply with the requirements of this section (including, for example,
where the taxpayer and eligible assignee are not properly treated as
members of the same combined reporting group on any of the dates
specified in paragraph (3) of subdivision (b).
(f) (1) The taxpayer and the eligible assignee shall be jointly
and severally liable for any tax, addition to tax, or penalty that
results from the disallowance, in whole or in part, of any eligible
credit assigned under this section.
(2) Nothing in this section shall limit the authority of the
Franchise Tax Board to audit either the assigning taxpayer or the
eligible assignee with respect to any eligible credit assigned under
this section.
(g) On or before June 30, 2013, the Franchise Tax Board shall
report to the Joint Legislative Budget Committee, the Legislative
Analyst, and the relevant policy committees of both houses on the
effects of this section. The report shall include, but need not be
limited to, the following:
(1) An estimate of use of credits in the 2010 and 2011 taxable
years by eligible taxpayers.
(2) An analysis of effect of this section on expanding business
activity in the state related to these credits.
(3) An estimate of the resulting tax revenue loss to the state.
(4) The report shall cover all credits covered in this section,
but focus on the credits related to research and development,
economic incentive areas, and low income housing.
SEC. 5. Section 24416 of the Revenue
and Taxation Code is amended to read:
24416. Except as provided in Sections 24416.1, 24416.2, 24416.4,
24416.5, 24416.6, and 24416.7, a net operating loss deduction shall
be allowed in computing net income under Section 24341 and shall be
determined in accordance with Section 172 of the Internal Revenue
Code, except as otherwise provided.
(a) (1) Net operating losses attributable to taxable years
beginning before January 1, 1987, shall not be allowed.
(2) A net operating loss shall not be carried forward to any
taxable year beginning before January 1, 1987.
(b) (1) Except as provided in paragraphs (2) and (3), the
provisions of Section 172(b)(2) of the Internal Revenue Code,
relating to the amount of carryovers, shall be modified so that the
applicable percentage of the entire amount of the net operating loss
for any taxable year shall be eligible for carryover to any
subsequent taxable year. For purposes of this subdivision, the
applicable percentage shall be:
(A) Fifty percent for any taxable year beginning before January 1,
2000.
(B) Fifty-five percent for any taxable year beginning on or after
January 1, 2000, and before January 1, 2002.
(C) Sixty percent for any taxable year beginning on or after
January 1, 2002, and before January 1, 2004.
(D) One hundred percent for any taxable year beginning on or after
January 1, 2004.
(2) In the case of a taxpayer who has a net operating loss in any
taxable year beginning on or after January 1, 1994, and who operates
a new business during that taxable year, each of the following shall
apply to each loss incurred during the first three taxable years of
operating the new business:
(A) If the net operating loss is
equal to or less than the net loss from the new business, 100 percent
of the net operating loss shall be carried forward as provided in
subdivision (e).
(B) If the net operating loss is greater than the net loss from
the new business, the net operating loss shall be carried over as
follows:
(i) With respect to an amount equal to the net loss from the new
business, 100 percent of that amount shall be carried forward as
provided in subdivision (e).
(ii) With respect to the portion of the net operating loss that
exceeds the net loss from the new business, the applicable percentage
of that amount shall be carried forward as provided in subdivision
(d).
(C) For purposes of Section 172(b)(2) of the Internal Revenue
Code, the amount described in clause (ii) of subparagraph (B) shall
be absorbed before the amount described in clause (i) of subparagraph
(B).
(3) In the case of a taxpayer who has a net operating loss in any
taxable year beginning on or after January 1, 1994, and who operates
an eligible small business during that taxable year, each of the
following shall apply:
(A) If the net operating loss is equal to or less than the net
loss from the eligible small business, 100 percent of the net
operating loss shall be carried forward to the taxable years
specified in paragraph (1) of subdivision (e).
(B) If the net operating loss is greater than the net loss from
the eligible small business, the net operating loss shall be carried
over as follows:
(i) With respect to an amount equal to the net loss from the
eligible small business, 100 percent of that amount shall be carried
forward as provided in subdivision (e).
(ii) With respect to that portion of the net operating loss that
exceeds the net loss from the eligible small business, the applicable
percentage of that amount shall be carried forward as provided in
subdivision (e).
(C) For purposes of Section 172(b)(2) of the Internal Revenue
Code, the amount described in clause (ii) of subparagraph (B) shall
be absorbed before the amount described in clause (i) of subparagraph
(B).
(4) In the case of a taxpayer who has a net operating loss in a
taxable year beginning on or after January 1, 1994, and who operates
a business that qualifies as both a new business and an eligible
small business under this section, that business shall be treated as
a new business for the first three taxable years of the new business.
(5) In the case of a taxpayer who has a net operating loss in a
taxable year beginning on or after January 1, 1994, and who operates
more than one business, and more than one of those businesses
qualifies as either a new business or an eligible small business
under this section, paragraph (2) shall be applied first, except that
if there is any remaining portion of the net operating loss after
application of clause (i) of subparagraph (B) of paragraph (2),
paragraph (3) shall be applied to the remaining portion of the net
operating loss as though that remaining portion of the net operating
loss constituted the entire net operating loss.
(6) For purposes of this section, "net loss" means the amount of
net loss after application of Sections 465 and 469 of the Internal
Revenue Code.
(c) For any taxable year in which the taxpayer has in effect a
water's-edge election under Section 25110, the deduction of a net
operating loss carryover shall be denied to the extent that the net
operating loss carryover was determined by taking into account the
income and factors of an affiliated corporation in a combined report
whose income and apportionment factors would not have been taken into
account if a water's-edge election under Section 25110 had been in
effect for the taxable year in which the loss was incurred.
(d) Section 172(b)(1) of the Internal Revenue Code, relating to
net operating loss carrybacks and carryovers and the years to which
the loss may be carried, is modified as follows:
(1)
(d) Net operating loss carrybacks shall not be allowed
for any net operating losses attributable to taxable years
beginning before January 1, 2011 .
(2) A net operating loss attributable to taxable years beginning
on or after January 1, 2011, shall be a net operating loss carryback
to each of the two taxable years preceding the taxable year of the
loss in lieu of the number of years provided therein.
(A) For a net operating loss attributable to a taxable year
beginning on or after January 1, 2011, and before January 1, 2012,
the amount of carryback to any taxable year shall not exceed 50
percent of the net operating loss.
(B) For a net operating loss attributable to a taxable year
beginning on or after January 1, 2012, and before January 1, 2013,
the amount of carryback to any taxable year shall not exceed 75
percent of the net operating loss.
(C) For a net operating loss attributable to a taxable year
beginning on or after January 1, 2013, the amount of carryback to any
taxable year shall not exceed 100 percent of the net operating loss.
(3) Notwithstanding paragraph (2), Section 172(b)(1)(B) of the
Internal Revenue Code, relating to special rules for REITs, and
Sections 172(b)(1)(E) and 172(h) of the Internal Revenue Code,
relating to corporate equity reduction interest loss, shall apply as
provided.
(4) A net operating loss carryback shall not be carried back to
any taxable year beginning before January 1, 2009.
(e) (1) (A) For a net operating loss for any taxable year
beginning on or after January 1, 1987, and before January 1, 2000,
Section 172(b)(1)(A)(ii) of the Internal Revenue Code, relating to
years to which net operating losses may be carried, is modified to
substitute "five taxable years" in lieu of "20 years" except as
otherwise provided in paragraphs (2), (3), and (4).
(B) For a net operating loss for any income year beginning on or
after January 1, 2000, and before January 1, 2008, Section 172(b)(1)
(A)(ii) of the Internal Revenue Code, relating to years to which net
operating losses may be carried, is modified to substitute "10
taxable years" in lieu of "20 taxable years."
(2) For any income year beginning before January 1, 2000, in the
case of a "new business," the "five taxable years" referred to in
paragraph (1) shall be modified to read as follows:
(A) "Eight taxable years" for a net operating loss attributable to
the first taxable year of that new business.
(B) "Seven taxable years" for a net operating loss attributable to
the second taxable year of that new business.
(C) "Six taxable years" for a net operating loss attributable to
the third taxable year of that new business.
(3) For any carryover of a net operating loss for which a
deduction is denied by Section 24416.3, the carryover period
specified in this subdivision shall be extended as follows:
(A) By one year for a net operating loss attributable to taxable
years beginning in 1991.
(B) By two years for a net operating loss attributable to taxable
years beginning prior to January 1, 1991.
(4) The net operating loss attributable to taxable years beginning
on or after January 1, 1987, and before January 1, 1994, shall be a
net operating loss carryover to each of the 10 taxable years
following the year of the loss if it is incurred by a corporation
that was either of the following:
(A) Under the jurisdiction of the court in a Title 11 or similar
case at any time prior to January 1, 1994. The loss carryover
provided in the preceding sentence shall not apply to any loss
incurred in an income year after the taxable year during which the
corporation is no longer under the jurisdiction of the court in a
Title 11 or similar case.
(B) In receipt of assets acquired in a transaction that qualifies
as a tax-free reorganization under Section 368(a)(1)(G) of the
Internal Revenue Code.
(f) For purposes of this section:
(1) "Eligible small business" means any trade or business that has
gross receipts, less returns and allowances, of less than one
million dollars ($1,000,000) during the income year.
(2) Except as provided in subdivision (g), "new business" means
any trade or business activity that is first commenced in this state
on or after January 1, 1994.
(3) "Title 11 or similar case" shall have the same meaning as in
Section 368(a)(3) of the Internal Revenue Code.
(4) In the case of any trade or business activity conducted by a
partnership or an "S corporation," paragraphs (1) and (2) shall be
applied to the partnership or "S corporation."
(g) For purposes of this section, in determining whether a trade
or business activity qualifies as a new business under paragraph (2)
of subdivision (e), the following rules shall apply:
(1) In any case where a taxpayer purchases or otherwise acquires
all or any portion of the assets of an existing trade or business
(irrespective of the form of entity) that is doing business in this
state (within the meaning of Section 23101), the trade or business
thereafter conducted by the taxpayer (or any related person) shall
not be treated as a new business if the aggregate fair market value
of the acquired assets (including real, personal, tangible, and
intangible property) used by the taxpayer (or any related person) in
the conduct of its trade or business exceeds 20 percent of the
aggregate fair market value of the total assets of the trade or
business being conducted by the taxpayer (or any related person). For
purposes of this paragraph only, the following rules shall apply:
(A) The determination of the relative fair market values of the
acquired assets and the total assets shall be made as of the last day
of the first taxable year in which the taxpayer (or any related
person) first uses any of the acquired trade or business assets in
its business activity.
(B) Any acquired assets that constituted property described in
Section 1221(1) of the Internal Revenue Code in the hands of the
transferor shall not be treated as assets acquired from an existing
trade or business, unless those assets also constitute property
described in Section 1221(1) of the Internal Revenue Code in the
hands of the acquiring taxpayer (or related person).
(2) In any case where a taxpayer (or any related person) is
engaged in one or more trade or business activities in this state, or
has been engaged in one or more trade or business activities in this
state within the preceding 36 months ("prior trade or business
activity"), and thereafter commences an additional trade or business
activity in this state, the additional trade or business activity
shall only be treated as a new business if the additional trade or
business activity is classified under a different division of the
Standard Industrial Classification (SIC) Manual published by the
United States Office of Management and Budget, 1987 edition, than are
any of the taxpayer's (or any related person's) current or prior
trade or business activities.
(3) In any case where a taxpayer, including all related persons,
is engaged in trade or business activities wholly outside of this
state and the taxpayer first commences doing business in this state
(within the meaning of Section 23101) after December 31, 1993 (other
than by purchase or other acquisition described in paragraph (1)),
the trade or business activity shall be treated as a new business
under paragraph (2) of subdivision (e).
(4) In any case where the legal form under which a trade or
business activity is being conducted is changed, the change in form
shall be disregarded and the determination of whether the trade or
business activity is a new business shall be made by treating the
taxpayer as having purchased or otherwise acquired all or any portion
of the assets of an existing trade or business under the rules of
paragraph (1) of this subdivision.
(5) "Related person" shall mean any person that
who is related to the taxpayer under either Section 267
or 318 of the Internal Revenue Code.
(6) "Acquire" shall include any transfer, whether or not for
consideration.
(7) (A) For taxable years beginning on or after January 1, 1997,
the term "new business" shall include any taxpayer that is engaged in
biopharmaceutical activities or other biotechnology activities that
are described in Codes 2833 to 2836, inclusive, of the Standard
Industrial Classification (SIC) Manual published by the United States
Office of Management and Budget, 1987 edition, and as further
amended, and that has not received regulatory approval for any
product from the United States Food and Drug Administration.
(B) For purposes of this paragraph:
(i) "Biopharmaceutical activities" means those activities that use
organisms or materials derived from organisms, and their cellular,
subcellular, or molecular components, in order to provide
pharmaceutical products for human or animal therapeutics and
diagnostics. Biopharmaceutical activities make use of living
organisms to make commercial products, as opposed to pharmaceutical
activities that make use of chemical compounds to produce commercial
products.
(ii) "Other biotechnology activities" means activities consisting
of the application of recombinant DNA technology to produce
commercial products, as well as activities regarding pharmaceutical
delivery systems designed to provide a measure of control over the
rate, duration, and site of pharmaceutical delivery.
(h) For purposes of corporations whose net income is determined
under Chapter 17 (commencing with Section 25101), Section 25108 shall
apply to each of the following:
(1) The amount of net operating loss incurred in any taxable year
that may be carried forward to another taxable year.
(2) The amount of any loss carry forward that may be deducted in
any taxable year.
(i) The provisions of Section 172(b)(1)(D) of the Internal Revenue
Code, relating to bad debt losses of commercial banks, shall not be
applicable.
(j) The Franchise Tax Board may prescribe appropriate regulations
to carry out the purposes of this section, including any regulations
necessary to prevent the avoidance of the purposes of this section
through splitups, shell corporations, partnerships, tiered ownership
structures, or otherwise.
(k) The Franchise Tax Board may reclassify any net operating loss
carryover determined under either paragraph (2) or (3) of subdivision
(b) as a net operating loss carryover under paragraph (1) of
subdivision (b) upon a showing that the reclassification is necessary
to prevent evasion of the purposes of this section.
(l) Except as otherwise provided, the amendments made by Chapter
107 of the Statutes of 2000 shall apply to net operating losses for
taxable years beginning on or after January 1, 2000.
SEC. 6. Section 24416.9 of the Revenue
and Taxation Code is amended to read:
24416.9. (a) Notwithstanding Sections 24416, 24416.1, 24416.2,
24416.4, 24416.5, 24416.6, and 24416.7 of this code and Section 172
of the Internal Revenue Code, no net operating loss deduction shall
be allowed for any taxable year beginning on or after January 1,
2008, and before January 1, 2010.
(b) For any net operating loss or carryover of a net operating
loss for which a deduction is denied by subdivision (a), the
carryover period under Section 172 of the Internal Revenue Code shall
be extended as follows:
(1) By one year, for losses incurred in taxable years beginning on
or after January 1, 2008, and before January 1, 2009.
(2) By two years, for losses incurred in taxable years beginning
before January 1, 2008.
(c) Notwithstanding subdivision (a), a net operating loss
deduction shall be allowed for carryback of a net operating loss
attributable to a taxable year beginning on or after January 1, 2011.
(d)
(c) The provisions of this section shall not apply to a
taxpayer with income subject to tax under this part of less than
five hundred thousand dollars ($500,000) for the taxable year.
SEC. 7. Section 24416.10 of the Revenue
and Taxation Code is amended to read:
24416.10. Notwithstanding Section 24416.1, 24416.2, 24416.4,
24416.5, 24416.6, or 24416.7 to the contrary, a net operating loss
attributable to a taxable year beginning on or after January 1, 2008,
shall be a net operating carryover to each of the 20 taxable years
following the year of the loss , and a net operating loss
attributable to a taxable year beginning on or after January 1, 2011,
shall also be a net operating loss carryback to each of the two
taxable years preceding the taxable year of loss .
SEC. 8. Section 30016 of the Revenue
and Taxation Code is amended to read:
30016. "Wholesaler" includes:
(a) Any person, other than a licensed distributor, who engages in
this state in making sales for resale of cigarettes that are
contained in packages to which are affixed stamps or meter
impressions.
(b) Any person, other than a licensed distributor, who engages in
this state in making sales for resale of tobacco products on which
the tax imposed in Sections 30123 and 30131.2
under this part has been paid.
SEC. 9. Section 30104 of the Revenue
and Taxation Code is amended to read:
30104. The taxes imposed by this part shall not apply to the sale
of cigarettes or tobacco products by a distributor to a common
carrier engaged in interstate or foreign passenger service or to a
person authorized to sell cigarettes or tobacco products on the
facilities of the carrier. Whenever cigarettes or tobacco products
are sold by distributors to common carriers engaged in interstate or
foreign passenger service for use or sale on facilities of the
carriers, or to persons authorized to sell cigarettes or tobacco
products on those facilities, the tax imposed by Sections
30101, 30123, and 30131.2 under this part shall
not be levied with respect to the sales of the cigarettes or tobacco
products by the distributors, but a tax is hereby levied upon the
carriers or upon the persons authorized to sell cigarettes or tobacco
products on the facilities of the carriers, as the case may be, for
the privilege of making sales in California at the same rate as set
forth in Sections 30101, 30123, and 30131.2
under this part . Those common carriers and authorized persons
shall pay the tax imposed by this section and file reports with the
board, as provided in Section 30186.
SEC. 10. Section 30108 of the Revenue
and Taxation Code is amended to read:
30108. (a) Every distributor engaged in business in this state
and selling or accepting orders for cigarettes or tobacco products
with respect to the sale of which the tax imposed by
Sections 30101, 30123, and 30131.2 under this part
is inapplicable shall, at the time of making the sale or
accepting the order or, if the purchaser is not then obligated to pay
the tax with respect to his or her distribution of the cigarettes or
tobacco products, at the time the purchaser becomes so obligated,
collect the tax from the purchaser, if the purchaser is other than a
licensed distributor, and shall give to the purchaser a receipt
therefor in the manner and form prescribed by the board.
(b) Every person engaged in business in this state and making
gifts of untaxed cigarettes or tobacco products as samples with
respect to which the tax imposed by Sections 30101, 30123,
and 30131.2 under this part is inapplicable
shall, at the time of making the gift or, if the donee is not then
obligated to pay the tax with respect to his or her distribution of
the cigarettes or tobacco products, at the time the donee becomes so
obligated, collect the tax from the donee, if the donee is other than
a licensed distributor, and shall give the donee a receipt therefor
in the manner and form prescribed by the board. This section shall
not apply to those distributions of cigarettes or tobacco products
which are exempt from tax under Section 30105.5.
(c) "Engaged in business in the state" means and includes any of
the following:
(1) Maintaining, occupying, or using, permanently or temporarily,
directly or indirectly, or through a subsidiary, or agent, by
whatever name called, an office, place of distribution, sales or
sample room or place, warehouse or storage place, or other place of
business.
(2) Having any representative, agent, salesperson, canvasser or
solicitor operating in this state under the authority of the
distributor or its subsidiary for the purpose of selling, delivering,
or the taking of orders for cigarettes or tobacco products.
(d) The taxes required to be collected by this section constitute
debts owed by the distributor, or other person required to collect
the taxes, to the state.
SEC. 11. Article 2.5 (commencing with Section
30130.3) is added to Chapter 2 of Part 13 of Division 2 of the
Revenue and Taxation Code , to read:
Article 2.5. Cigarette and Tobacco Products Excise Tax
30130.3. The following definitions apply for purposes of this
article:
(a) "Cigarette" has the same meaning as in Section 30003, as it
read on January 1, 2009.
(b) "Tobacco products" includes, but is not limited to, all forms
of cigars, smoking tobacco, chewing tobacco, snuff, and any other
articles or products made of, or containing at least 50 percent,
tobacco, but does not include cigarettes.
30130.5. In addition to any other tax imposed under this part, an
excise tax is hereby imposed upon every distributor of cigarettes at
the rate of seventy-five mills ($0.075) for each cigarette
distributed on and after October 1, 2009.
30130.52. (a) (1) Every dealer and wholesaler, for the privilege
of holding or storing cigarettes for sale, use, or consumption, shall
pay a floor stock tax for each cigarette in his or her possession or
under his or her control in this state at 12:01 a.m. on October 1,
2009, at the rate of seventy-five mills ($0.075) for each cigarette.
(2) Every dealer and wholesaler shall file a return with the State
Board of Equalization on or before November 16, 2009, on a form
prescribed by the board, showing the number of cigarettes in his or
her possession or under his or her control at 12:01 a.m. on October
1, 2009. The amount of tax shall be computed and shown on the return.
(b) (1) Every licensed cigarette distributor, for the privilege of
distributing cigarettes and for holding or storing cigarettes for
sale, use, or consumption, shall pay a cigarette indicia adjustment
tax for each California cigarette tax stamp that is affixed to any
package of cigarettes and for each unaffixed California cigarette tax
stamp in his or her possession or under his or her control at 12:01
a.m. on October 1, 2009, at the following rates:
(A) One dollar and eight hundred seventy-five mills ($1.875) for
each stamp bearing the designation "25."
(B) One dollar and fifty cents ($1.50) for each stamp bearing the
designation "20."
(C) Seventy-five cents ($0.75) for each stamp bearing the
designation "10."
(2) Every licensed cigarette distributor shall file a return with
the board on or before November 16, 2009, on a form prescribed by the
board, showing the number of stamps described in subparagraphs (A),
(B), and (C), of paragraph (1). The amount of tax shall be computed
and shown on the return.
(c) The taxes required to be paid by this section are due and
payable on November 16, 2009. Payments shall be made by remittances
payable to the State Board of Equalization and the payments shall
accompany the forms required to be filed by this section.
(d) Any amount required to be paid by this section that is not
timely paid shall bear interest at the rate and by the method
established pursuant to Section 30202 from November 16, 2009, until
paid, and shall be subject to determination, and redetermination, and
any penalties provided with respect to determinations and
redeterminations.
30130.54. (a) In addition to the taxes imposed upon the
distribution of tobacco products by this chapter, there shall be
imposed, on and after July 1, 2010, an additional tax upon every
distributor of tobacco products, based on the wholesale cost of these
products, at a tax rate, as determined annually by the State Board
of Equalization, that is equivalent to the rate of tax imposed on
cigarettes by Section 30130.5.
(b) The wholesale cost used to calculate the amount of tax due
under this section does not include the wholesale cost of tobacco
products that were returned by a customer during the same reporting
period in which the tobacco products were distributed, when the
distributor refunds the entire amount the customer paid for the
tobacco products either in cash or credit. For purposes of this
subdivision, refund or credit of the entire amount shall be deemed to
be given when the purchase price less rehandling and restocking
costs is refunded or credited to the customer. The amount withheld
for rehandling and restocking costs may be a percentage of the sales
price determined by the average cost of rehandling and restocking
returned merchandise during the previous accounting cycle.
30130.56. The taxes imposed under this article shall be
administered and collected in accordance with this part.
30130.58. (a) Except for payments of refunds made pursuant to
Article 1 (commencing with Section 30361) of Chapter 6, and
reimbursement to the State Board of Equalization for expenses
incurred in the administration and collection of the tax imposed by
this article, all moneys derived from a tax imposed pursuant to this
article shall be transferred to the General Fund.
(b)
This section shall not apply to any moneys raised pursuant to the
taxes imposed by subdivision (b) of Section 30123.
30130.59. The annual determination required of the State Board of
Equalization pursuant to Section 30130.54 shall be made based on the
wholesale cost of tobacco products as of March 1, and shall be
effective during the state's next fiscal year.
SEC. 12. Section 30165.1 of the Revenue
and Taxation Code is amended to read:
30165.1. (a) The following definitions shall apply for purposes
of this section:
(1) "Board" means the State Board of Equalization.
(2) "Brand family" means all styles of cigarettes sold under the
same trademark and differentiated from one another by means of
additional modifiers, including, but not limited to, "menthol,"
"lights," "kings," and "100s" and includes any brand name, alone or
in conjunction with any other word, trademark, logo, symbol, motto,
selling message, recognizable pattern of colors, or any other indicia
of product identification identical or similar to, or identifiable
with, a previously known brand of cigarettes.
(3) "Cigarette" has the same meaning as in subdivision (d) of
Section 104556 of the Health and Safety Code and includes tobacco
products defined as a cigarette under that subdivision.
(4) "Distributor" has the same meaning as in Section 30011.
(5) "MSA" means the Master Settlement Agreement, as defined in
subdivision (e) of Section 104556 of the Health and Safety Code.
(6) "Nonparticipating manufacturer" means any tobacco product
manufacturer that is not a participating manufacturer.
(7) "Participating manufacturer" has the same meaning as in
subsection II(jj) of the MSA.
(8) "Qualified escrow fund" has the same meaning as in subdivision
(f) of Section 104556 of the Health and Safety Code.
(9) "Tobacco product manufacturer" has the same meaning as in
subdivision (i) of Section 104556 of the Health and Safety Code.
(10) "Units sold" has the same meaning as in subdivision (j) of
Section 104556 of the Health and Safety Code.
(b) Every tobacco product manufacturer whose cigarettes are sold
in this state, whether directly or through a distributor, retailer,
or similar intermediary or intermediaries, shall execute and deliver
on a form and in the manner prescribed by the Attorney General a
certification to the Attorney General no later than the 30th day of
April each year that, as of the date of the certification, the
tobacco product manufacturer is either a participating manufacturer,
or is in full compliance with Article 3 (commencing with Section
104555) of Chapter 1 of Part 3 of Division 103 of the Health and
Safety Code, including all installment payments required by that
article and this section, and any regulations promulgated pursuant
thereto. Any person who makes a certification pursuant to this
subdivision that asserts the truth of any material matter that he or
she knows to be false is guilty of a misdemeanor punishable by
imprisonment of up to one year in the county jail, or a fine of not
more than one thousand dollars ($1,000), or both the imprisonment and
the fine.
(1) A participating manufacturer shall include in its
certification a complete list of its brand families. The
participating manufacturer shall update the list 30 days prior to any
addition to or modification of its brand families by executing and
delivering a supplemental certification to the Attorney General.
(2) A nonparticipating manufacturer shall include in its
certification a complete list of all of its brand families, in
accordance with the following requirements:
(A) Separately listing brand families of cigarettes and the number
of units sold for each brand family that were sold in the state
during the preceding calendar year.
(B) Separately listing all of its brand families that have been
sold in the state at any time during the current calendar year.
(C) Indicating by an asterisk any brand family sold in the state
during the preceding calendar year that is no longer being sold in
the state as of the date of the certification.
(D) Identifying by name and address any other manufacturer,
including all fabricators or makers of the brand families in the
preceding or current calendar year in a form, manner, and detail as
required by the Attorney General. The nonparticipating manufacturer
shall update the list 30 days prior to any change in a fabricator for
any brand family or any addition to or modification of its brand
families by executing and delivering a supplemental certification to
the Attorney General.
(3) In the case of a nonparticipating manufacturer, the
certification shall further certify all of the following:
(A) That the nonparticipating manufacturer is registered to do
business in the state, or has appointed a resident agent for service
of process and provided notice thereof as required by subdivision
(f).
(B) That the nonparticipating manufacturer has done all of the
following:
(i) Established and continues to maintain a qualified escrow fund
as that term is defined in subdivision (f) of Section 104556 of the
Health and Safety Code and implementing regulations.
(ii) Executed a qualified escrow agreement that has been reviewed
and approved by the Attorney General and that governs the qualified
escrow fund.
(iii) If the nonparticipating manufacturer is not the fabricator
or maker of the cigarettes, that the escrow agreement, certification,
reports, and any other forms required by Article 3 (commencing with
Section 104555) of Chapter 1 of Part 3 of Division 103 of the Health
and Safety Code and implementing regulations are signed by the
company that fabricates or makes the cigarettes and in the manner
required by the Attorney General.
(C) That the nonparticipating manufacturer is in full compliance
with Article 3 (commencing with Section 104555) of Chapter 1 of Part
3 of Division 103 of the Health and Safety Code, including paragraph
(2) of subdivision (a) of Section 104557 of the Health and Safety
Code, this section, and any regulations promulgated pursuant thereto.
(D) That the manufacturer has provided all of the following:
(i) The name, address, and telephone number of the financial
institution where the nonparticipating manufacturer has established
the qualified escrow fund required pursuant to Article 3 (commencing
with Section 104555) of Chapter 1 of Part 3 of Division 103 of the
Health and Safety Code and all regulations promulgated thereto.
(ii) The account number of the qualified escrow fund and
subaccount number for the State of California.
(iii) The amount the nonparticipating manufacturer placed in the
fund for cigarettes sold in the state during the preceding calendar
year, the date and amount of each deposit, and any confirming
evidence or verification as may be deemed necessary by the Attorney
General.
(iv) The amounts and dates of any withdrawal or transfer of funds
the nonparticipating manufacturer made at any time from the fund or
from any other qualified escrow fund into which it ever made escrow
payments pursuant to Article 3 (commencing with Section 104555) of
Chapter 1 of Part 3 of Division 103 of the Health and Safety Code and
all regulations promulgated thereto.
(4) (A) A tobacco product manufacturer may not include a brand
family in its certification unless either of the following is true:
(i) In the case of a participating manufacturer, the participating
manufacturer affirms that the brand family is to be deemed to be its
cigarettes for purposes of calculating its payments under the MSA
for the relevant year, in the volume and shares determined pursuant
to the MSA.
(ii) In the case of a nonparticipating manufacturer, the
nonparticipating manufacturer affirms that the brand family is to be
deemed to be its cigarettes for purposes of Article 3 (commencing
with Section 104555) of Chapter 1 of Part 3 of Division 103 of the
Health and Safety Code, including paragraph (2) of subdivision (a) of
Section 104557 of the Health and Safety Code, and any regulations
promulgated pursuant thereto and this section.
(B) Nothing in this section shall be construed as limiting or
otherwise affecting the state's right to maintain that a brand family
constitutes cigarettes of a different tobacco product manufacturer
for purposes of calculating payments under the MSA or for purposes of
Article 3 (commencing with Section 104555) of Chapter 1 of Part 3 of
Division 103 of the Health and Safety Code and any regulations
promulgated pursuant thereto.
(5) A tobacco product manufacturer shall maintain all invoices and
documentation of sales and other information relied upon for the
certification for a period of five years, unless otherwise required
by law to maintain them for a longer period of time.
(c) Not later than June 30, 2004, the Attorney General shall
develop and publish on its Internet Web site a directory listing of
all tobacco product manufacturers that have provided current, timely,
and accurate certifications conforming to the requirements of
subdivision (b) and all brand families that are listed in the
certifications, except as specified below.
(1) The Attorney General may not include or retain in the
directory the name or brand families of any nonparticipating
manufacturer that fails to provide the required certification or
whose certification the Attorney General determines is not in
compliance with subdivision (b), unless the Attorney General has
determined that the violation has been cured to the satisfaction of
the Attorney General.
(2) Neither a tobacco product manufacturer nor brand family shall
be included or retained in the directory if the Attorney General
concludes that either of the following is true:
(A) In the case of a nonparticipating manufacturer, any escrow
deposit required pursuant to Section 104557 of the Health and Safety
Code for any period for any brand family, whether or not listed by
the nonparticipating manufacturer, has not been fully deposited into
a qualified escrow fund governed by a qualified escrow agreement that
has been approved by the Attorney General.
(B) Any outstanding final judgment, including interest thereon,
for violations of Article 3 (commencing with Section 104555) of
Chapter 1 of Part 3 of Division 103 of the Health and Safety Code,
this section, and any regulations promulgated pursuant thereto, has
not been fully satisfied for the brand family and the manufacturer.
(3) The Attorney General shall update the directory as necessary
in order to correct mistakes and to add or remove a tobacco product
manufacturer or brand family to keep the directory in conformity with
the requirements of this section. The Attorney General shall
promptly provide distributors with written notice of each tobacco
product manufacturer and brand family that the Attorney General has
added to, or excluded or removed from the list.
(4) Every distributor shall provide to the Attorney General and
update, as necessary, an electronic mail address for the purpose of
receiving any notifications as may be required by this section.
(5) The Attorney General shall provide each tobacco product
manufacturer that has provided all certifications and other
information required by this section with a written acknowledgment of
receipt within seven business days after receiving the
certifications and other materials. Each tobacco product manufacturer
shall provide to each distributor to whom it sells or ships
cigarettes, or any tobacco product defined as a cigarette under this
section, a copy of each acknowledgment of receipt provided to the
manufacturer by the Attorney General. Upon request, the Attorney
General shall provide any distributor with a copy of the most recent
written acknowledgment of receipt provided to the tobacco product
manufacturer.
(d) (1) The Attorney General may exclude or remove from the list
required by subdivision (c) a tobacco product manufacturer or any of
its brand families, based on a determination that the manufacturer is
not a participating manufacturer and has not made all escrow
payments required by paragraph (2) of subdivision (a) of Section
104557 of the Health and Safety Code, in accordance with that
subdivision, or has not complied with this section. Before the
exclusion or removal may take effect, the Attorney General shall
notify the manufacturer of this determination.
(2) Upon receiving notice from the Attorney General pursuant to
paragraph (1), the manufacturer may challenge the Attorney General's
determination as erroneous, and may seek relief from the
determination, by filing a petition for writ of mandate pursuant to
Section 1085 of the Code of Civil Procedure for that purpose in the
Superior Court for the County of Sacramento, or as otherwise provided
by law. The filing of the petition shall operate to stay the
Attorney General's determination, if the manufacturer has paid into
escrow the full amount of any deficiency in the escrow payments that
the Attorney General has determined the tobacco product manufacturer
was required to have made under paragraph (2) of subdivision (a) of
Section 104557 of the Health and Safety Code, including any
installment payments required under subdivision (h), pending final
resolution of the action.
(e) (1) No person shall affix, or cause to be affixed, any tax
stamp or meter impression to a package of cigarettes pursuant to
subdivision (a) of Section 30163, or pay the tax levied pursuant to
Sections 30123 and 30131.2 this part on
a tobacco product defined as a cigarette under this section, unless
the brand family of the cigarettes or tobacco product, and the
tobacco product manufacturer that makes or sells the cigarettes or
tobacco product, are included on the list posted by the Attorney
General pursuant to subdivision (c).
(2) No person shall sell, offer, or possess for sale in this
state, or import for personal consumption in this state, cigarettes
of a tobacco product manufacturer or brand family not included in the
directory.
(3) No person shall do either of the following:
(A) Sell or distribute cigarettes that the person knows or should
know are intended to be distributed in violation of paragraphs (1)
and (2).
(B) Acquire, hold, own, possess, transport, import, or cause to be
imported cigarettes that the person knows or should know are
intended to be distributed in violation of paragraphs (1) and (2).
(f) (1) Any nonresident or foreign nonparticipating manufacturer
that has not registered to do business in the state as a foreign
corporation or business entity shall, as a condition precedent to
having its brand families listed or retained in the directory,
appoint and continually engage without interruption the services of
an agent in this state to act as agent for the service of process on
whom all process, and any action or proceeding against it concerning
or arising out of the enforcement of this section, Article 3
(commencing with Section 104555) of Chapter 1 of Part 3 of Division
103 of the Health and Safety Code, and any regulations promulgated
pursuant thereto, may be served in any manner authorized by law. This
service shall constitute legal and valid service of process on the
nonparticipating manufacturer. The nonparticipating manufacturer
shall provide the name, address, telephone number, and proof of the
appointment and availability of the agent to the satisfaction of the
Attorney General.
(2) The nonparticipating manufacturer shall provide notice to the
Attorney General 30 calendar days prior to termination of the
authority of an agent and shall further provide proof to the
satisfaction of the Attorney General of the appointment of a new
agent no less than five calendar days prior to the termination of an
existing agent appointment. In the event an agent terminates an
agency appointment, the nonparticipating manufacturer shall notify
the Attorney General of said termination within five calendar days
and shall include proof to the satisfaction of the Attorney General
of the appointment of a new agent.
(3) Any nonparticipating manufacturer whose products are sold in
this state without appointing or designating an agent as herein
required shall be deemed to have appointed the Secretary of State as
its agent, as provided in Section 2105 of the Corporations Code, and
may be proceeded against in courts of this state by service of
process upon the Secretary of State. However, the appointment of the
Secretary of State pursuant to this provision as the agent for
service of process does not satisfy the condition precedent specified
in paragraph (1) to having its brand families listed or retained in
the directory.
(g) (1) Not later than 25 days after the end of each calendar
quarter, and more frequently if so directed by the board or the
Attorney General, each distributor shall submit any information as
the board or Attorney General requires to facilitate compliance with
this section, including, but not limited to, a list by brand family
of the total number of cigarettes or in the case of roll your own,
the total ounces for which the distributor affixed stamps during the
previous calendar month or otherwise paid the tax due for those
cigarettes. The distributor shall maintain, and shall make available
to the board and the Attorney General, all invoices and documentation
of sales of all nonparticipating manufacturer cigarettes and any
other information relied upon in reporting to the board and the
Attorney General for a period of five years.
(2) Notwithstanding Section 30455, the board is authorized to
disclose to the Attorney General any information received under this
part for purposes of determining compliance with and enforcing the
provisions of this section and Article 3 (commencing with Section
104555) of Chapter 1 of Part 3 of Division 103 of the Health and
Safety Code, and any regulations promulgated pursuant thereto. The
board and Attorney General shall share with each other the
information received under this section, and may share that
information with other federal, state, or local agencies, only for
purposes of enforcement of this section, Article 3 (commencing with
Section 104555) of Chapter 1 of Part 3 of Division 103 of the Health
and Safety Code, and any regulations promulgated pursuant thereto, or
corresponding laws of other states.
(3) At any time, the Attorney General may require from the
nonparticipating manufacturer proof from the financial institution in
which the manufacturer has established a qualified escrow fund for
the purpose of compliance with Article 3 (commencing with Section
104555) of Chapter 1 of Part 3 of Division 103 of the Health and
Safety Code, and any regulations promulgated pursuant thereto, of the
amount of money in the fund being held on behalf of the state and
the dates of deposits, and listing the amounts of all withdrawals
from the fund and the dates thereof.
(4) In addition to the information required to be submitted
pursuant to this section or Article 3 (commencing with Section
104555) of Chapter 1 of Part 3 of Division 103 of the Health and
Safety Code and any regulations promulgated pursuant thereto, the
board or the Attorney General may require a retailer, wholesaler,
distributor, or tobacco product manufacturer to submit any additional
information, including, but not limited to, samples of the packaging
or labeling of each brand family, as is necessary to enable the
Attorney General to determine whether a tobacco product manufacturer
is in compliance with this section, or Article 3 (commencing with
Section 104555) of Chapter 1 of Part 3 of Division 103 of the Health
and Safety Code, and any regulations promulgated pursuant thereto.
(h) To promote compliance with this section, the Attorney General
may promulgate regulations requiring a tobacco product manufacturer
subject to the requirements of paragraph (2) of subdivision (a) of
Section 104557 to make the escrow deposits required in quarterly or
other specified installments during the year in which the sales
covered by the deposits are made. The Attorney General may require
production of information sufficient to enable the Attorney General
to determine the adequacy of the amount of the installment deposit.
(i) (1) In addition to any other civil or criminal penalty
provided by law, upon a finding that a distributor has violated
subdivision (e), or paragraph (1) of subdivision (g), the board may
take the following actions:
(A) In the case of the first offense, the board may revoke or
suspend the license or licenses of the distributor pursuant to the
procedures applicable to the revocation of a license set forth in
Section 30148.
(B) In the case of a second or any subsequent offense, in addition
to the action authorized under subparagraph (A), the board may
impose a civil penalty in an amount not to exceed the greater of
either of the following:
(i) Five times the retail value of the cigarettes or tobacco
products defined as cigarettes under this section.
(ii) Five thousand dollars ($5,000).
(2) A distributor in any action for a violation of subdivision (e)
shall have a defense provided that either of the following is true:
(A) At the time of the violation, the cigarettes or tobacco
products claimed to be the subject of the alleged violation belonged
to a brand family that was included on the list required by
subdivision (c).
(B) At the time of the violation, the distributor possessed a copy
of the Attorney General's most recent written acknowledgment of
receipt of the certifications and other information required as a
condition of including the brand family on the list required by
subdivision (c).
(3) The defense described in subparagraph (B) of paragraph (2) is
not available to a distributor if, at the time of the violation, the
Attorney General had provided the distributor with written notice
that the brand family had been excluded or removed from the list
required by subdivision (c), or the distributor failed to provide the
Attorney General with a current address for the receipt of written
notice through electronic mail as required by paragraph (4) of
subdivision (c).
(4) A violation of paragraph (3) of subdivision (e) shall
constitute a misdemeanor.
(j) If a distributor affixes a stamp or meter impression to a
package of cigarettes under subdivision (a) of Section 30163, or pays
the tax levied under Sections 30123 and 30131.2
this part on a tobacco product defined as a cigarette
under this section, during the period between the date on which the
brand family of the cigarettes or tobacco product was excluded or
removed from the list required by subdivision (c) and the date on
which the distributor received notice of the exclusion or removal
under paragraph (4) of subdivision (c), then both of the following
shall apply:
(1) The distributor shall be entitled to a credit for the tax paid
by the distributor with respect to the cigarette or tobacco product
to which the stamp or meter impression was affixed, or the tax paid
during that period. The distributor shall comply with regulations
prescribed by the board regarding refunds and credits that are
adopted pursuant to Section 30177.5. If the distributor has sold the
cigarette or tobacco product to a wholesaler or retailer, and has
received payment from the wholesaler or retailer, the distributor
shall provide the credit to the wholesaler or retailer.
(2) The brand family may not be included on or restored to the
list until the tobacco product manufacturer has reimbursed the
distributor for the cost to the distributor of the cigarettes or
tobacco product to which the stamp or meter impression was affixed,
or the tax paid, during that period.
(k) Any tobacco product manufacturer that falsely represents any
of the following to any person shall be guilty of a misdemeanor for
each false representation:
(1) Any information required under subdivision (b).
(2) That the tobacco product manufacturer is a participating
manufacturer.
(3) That the tobacco product manufacturer or any other person has
made any or all escrow payments required by paragraph (2) of
subdivision (a) of Section 104557 of the Health and Safety Code, if
applicable to the manufacturer.
(4) That it has complied with subdivision (b), or with paragraph
(1) of subdivision (g), if applicable to the manufacturer.
() A violation of subdivision (e) shall constitute unfair
competition under Section 17200 of the Business and Professions Code.
(m) No person shall be issued a distributor's license, pursuant to
Section 30140, unless that person has certified in writing that the
person will comply fully with this section. Any person who makes a
certification pursuant to this subdivision that asserts the truth of
any material matter that he or she knows to be false is guilty of a
misdemeanor punishable by imprisonment of up to one year in the
county jail, or a fine of not more than one thousand dollars
($1,000), or both the imprisonment and the fine.
(n) For the year 2003, if the effective date of the act that added
this section is later than March 16, 2003, the first report of
distributors required by paragraph (1) of subdivision (g) shall be
due 30 days after that effective date, the certifications by a
tobacco product manufacturer described in subdivision (b) shall be
due 45 days after that effective date, and the directory described in
subdivision (c) shall be published or made available within 90 days
after that effective date.
(o) The Attorney General may adopt rules and regulations to
implement this section. The rules and regulations may establish
procedures for including in the list described in subdivision (c)
tobacco product manufacturers that are not participating
manufacturers and were not required to make escrow payments under
paragraph (2) of subdivision (a) of Section 104557 of the Health and
Safety Code, for sales made during any preceding calendar year, and
brand families of those manufacturers. The rules and regulations may
also establish procedures for seizure and destruction of cigarettes
forfeited to the state pursuant to Section 30436 or Section 30449,
including, but not limited to, the state facilities that may be used
for the destruction of contraband cigarettes. Nothing in this section
shall affect the authority of local law enforcement and local
government officials to seize and destroy contraband under existing
state or local law. The regulations adopted to effect the purposes of
this section are emergency regulations in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. For purposes of that chapter, including
Section 11349.6 of the
Government Code, the adoption of the regulations shall be considered
by the Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare. Notwithstanding subdivision (e) of Section 11346.1 of the
Government Code, the regulations shall be repealed 180 days after
their effective date, unless the adopting authority or agency
complies with that chapter, as provided in subdivision (e) of Section
11346.1 of the Government Code.
(p) In any action brought by the state to enforce this section,
the state shall be entitled to recover the costs of investigation,
expert witness fees, costs of the action, and reasonable attorney's
fees.
(q) Unless otherwise expressly provided, the remedies or penalties
provided by this section are cumulative to each other and to the
remedies or penalties available under all other laws of this state.
SEC. 13. Section 30181 of the Revenue
and Taxation Code is amended to read:
30181. (a) When any tax imposed upon cigarettes under
Article 1 (commencing with Section 30101), Article 2 (commencing with
Section 30121), and Article 3 (commencing with Section 30131) of
Chapter 2 this part is not paid through the use
of stamps or meter impressions, the tax shall be due and payable
monthly on or before the 25th day of the month following the calendar
month in which a distribution of cigarettes occurs, or in the case
of a sale of cigarettes on the facilities of a common carrier for
which the tax is imposed pursuant to Section 30104, the tax shall be
due and payable monthly on or before the 25th day of the month
following the calendar month in which a sale of cigarettes on the
facilities of the carrier occurs.
(b) Each distributor of tobacco products shall file a return in
the form, as prescribed by the board, which may include, but not be
limited to, electronic media respecting the distributions of tobacco
products and their wholesale cost during the preceding month, and any
other information as the board may require to carry out this part.
The return shall be filed with the board on or before the 25th day of
the calendar month following the close of the monthly period for
which it relates, together with a remittance payable to the board, of
the amount of tax, if any, due under Article 2 (commencing
with Section 30121) or Article 3 (commencing with Section 30131) of
Chapter 2 this part for that period.
(c) To facilitate the administration of this part, the board may
require the filing of the returns for longer than monthly periods.
(d) Returns shall be authenticated in a form or pursuant to
methods as may be prescribed by the board.
(e) This section shall become operative on January 1, 2007.
SEC. 14. Section 30436 of the Revenue
and Taxation Code is amended to read:
30436. The following property, upon seizure by the board, is
hereby forfeited to the state:
(a) Cigarettes or tobacco products transported upon the highways,
roads, or streets of this state in violation of Section 30431 or
Section 30432.
(b) Cigarettes not contained in packages to which are affixed
California cigarette tax stamp or meter impressions or tobacco
products upon which the tobacco products surtax has not been paid,
which are offered for sale, possessed, kept, stored, or owned by any
person with the intent of the person to sell the cigarettes or
tobacco products without payment of the taxes imposed by this part.
(c) Any cigarette or tobacco product vending machine, together
with the cigarettes, tobacco products, money or other contents
thereof, that has been loaded, in whole or in part, with packages of
cigarettes that do not have California cigarette tax stamps or meter
impressions affixed or tobacco products upon which the tobacco
products surtax has not been paid.
(d) Cigarettes contained in packages to which are affixed
California cigarette tax stamps or meter impressions in violation of
Section 30163.
(e) Cigarettes or tobacco products to which are affixed California
cigarette tax stamps or meter impressions, or for which tax is paid
pursuant to Sections 30123 and 30131.2 this
part , in violation of Section 30165.1, regardless of whether
the violation is subject to the defense described in paragraph (2) of
subdivision (i) of Section 30165.1.
SEC. 15. Part 21 (commencing with Section 42001)
is added to Division 2 of the Revenue and Taxation Code
, to read:
PART 21. OIL SEVERANCE TAX LAW
42001. This part shall be known and may be cited as the Oil
Severance Tax Law.
42002. For purposes of this part, the following definitions shall
apply:
(a) "Barrel of oil" means 42 United States gallons of 231 cubic
inches per gallon computed at a temperature of 60 degrees Fahrenheit.
(b) "Department" means the Department of Conservation.
(c) "Gross value" means the sale price at the mouth of the well in
the case of oil, including any bonus, premium, or other thing of
value paid for the oil. If there is no sale at the time of severance,
"gross value" means the sale price when the oil is sold, including
any bonus, premium, or other thing of value paid for the oil. If oil
is exchanged for something other than cash, or if the relation
between the buyer and the seller is such that the consideration paid,
if any, is not indicative of the true value or market price, then
the department shall determine the value of the oil subject to the
tax based on the cash price paid to producers for like quality oil in
the vicinity of the well.
(d) "Oil" means petroleum, or other crude oil, condensate, casing
head gasoline, or other mineral oil that is mined, produced, or
withdrawn from below the surface of the soil or water in this state.
(e) "Producer" means any person or entity that takes oil from the
earth or water in this state in any manner; any person that owns,
controls, manages, or leases any oil well in the earth or water of
this state; any person that produces or extracts in any manner any
oil by taking it from the earth or water in this state; any person
that acquires the severed oil from a person or agency exempt from
property taxation under the United States Constitution or other laws
of the United States or under the California Constitution or other
laws of the State of California; and any person that owns an
interest, including a royalty interest, in oil or its value, whether
the oil is produced by the person owning the interest or by another
on the person's behalf by lease, contract, or other arrangement.
(f) "Production" means the total gross amount of oil produced,
including the gross amount attributable to a royalty or other
interest.
(g) "Severed" or "severing" means the extraction or withdrawing
from below the surface of the earth or water of any oil, regardless
of whether the extraction or withdrawal shall be by natural flow,
mechanical flow, forced flow, pumping, or any other means employed to
get the oil from below the surface of the earth or water, and shall
include the extraction or withdrawal by any means whatsoever of oil
upon which the tax has not been paid, from any surface reservoir,
natural or artificial, or from a water surface.
(h) "Stripper well" means a well that has been certified by the
department as an oil well incapable of producing an average of more
than 10 barrels of oil per day during the entire taxable month. Once
a well has been certified as a stripper well, that stripper well
shall remain certified as a stripper well until the well produces an
average of more than 10 barrels of oil per day during an entire
taxable month.
42003. On and after October 1, 2009, for the privilege of
severing oil from the earth or water in this state for sale,
transport, consumption, storage, profit, or use, a tax is hereby
imposed upon all producers at the rate of 9.9 percent of the gross
value of each barrel of oil severed. The tax shall be applied equally
to all portions of the gross value of each barrel of oil severed.
42004. Except as otherwise provided in this part, the tax shall
be upon the entire production in this state, regardless of the place
of sale or to whom sold or by whom used, or the fact that the
delivery may be made to points outside the state.
42005. The tax imposed by this part shall be in addition to any
ad valorem taxes imposed by the state, or any of its political
subdivisions, or any local business license taxes that may be
incurred as a privilege of severing oil from the earth or water or
doing business in that locality. There shall be no exemption from
payment of an ad valorem tax related to equipment, material, or
property by reason of the payment of the gross severance tax pursuant
to this part.
42006. Two or more producers that are corporations and are owned
or controlled directly or indirectly, as defined in Section 25105, by
the same interests shall be considered as a single producer for
purposes of application of the tax prescribed in this part.
42007. (a) There shall be exempted from the imposition of the oil
severance tax imposed pursuant to this part oil produced by a
stripper well in which the average value of oil as of January 1 of
the prior year is less than thirty dollars ($30) per barrel.
(b) For oil produced in this state from a well that qualifies
under Section 3251 of the Public Resources Code or which has been
inactive for a period of at least the preceding five consecutive
years, the imposition of the oil severance tax shall be reduced to
zero for a period of 10 years.
(c) There shall be exempted from the imposition of the oil
severance tax imposed pursuant to this part all oil owned or produced
by the state and any political subdivision's (including any local
public entity, as defined by Section 900.4 of the Government Code)
proprietary share of oil produced under any unit, cooperative, or
other pooling agreement.
42008. The tax imposed by this part is due and payable to the
department quarterly on or before the last day of the month next
succeeding each calendar quarter.
42009. (a) Any person that fails to pay any tax within the time
required shall pay, in addition to the amount of tax owed, interest
at the rate of 11/2 percent per month, or fraction thereof, from the
date on which the tax became due and payable until and including the
date of payment.
(b) Every payment on a delinquent tax owed pursuant to this part
shall be applied as follows:
(1) First, to any interest due on the tax.
(2) Second, to any penalty imposed by this part.
(3) Third, to the balance, if any, of the tax due.
42010. On or before the last day of the month following each
quarterly period of three months, a return for the preceding
quarterly period shall be filed with the department in the form as
the department may prescribe.
42011. The department shall deposit all tax revenues, penalties,
and interest collected pursuant to this part in the General Fund.
42012. The department may prescribe those forms and reporting
requirements as necessary to implement the tax, including, but not
limited to, information regarding the location of the well by county,
the gross amount of oil produced, the quantity sold and the selling
price, the prevailing market price of oil, and the amount of tax due.
42013. The department shall administer and collect the tax
imposed by this part pursuant to the Fee Collection Procedures Law
(Part 30 (commencing with Section 55001) of Division 2). For purposes
of this part, the references in the Fee Collection Procedures Law to
"fee" shall include the tax imposed by this part, to "feepayer"
shall include a person required to pay the oil severance tax, and to
"board" shall mean the Department of Conservation.
42014. The department may prescribe, adopt, and enforce emergency
regulations relating to the administration and enforcement of this
part. Any emergency regulations 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 these
regulations 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 Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code, including
subdivision (e) of Section 11346.1 of the Government Code, any
emergency regulations adopted pursuant to this section shall be filed
with, but not be repealed by, the Office of Administrative Law, and
shall remain in effect until revised by the director.
42015. The provisions of this part are severable. If any
provision of this part or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
SEC. 16. 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. 17. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.
SECTION 1. It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2009.
