Bill Text: CA SB889 | 2023-2024 | Regular Session | Chaptered

California Senate Bill 889

Bill Title: California Department of Tax and Fee Administration: earnings withholding orders: settlement agreements: excise taxes.

Spectrum: Committee Bill

Status: (Passed) 2023-10-08 - Chaptered by Secretary of State. Chapter 511, Statutes of 2023. [SB889 Detail]

Download: California-2023-SB889-Chaptered.html

Senate Bill No. 889

CHAPTER 511

An act to amend Sections 6355, 7093.5, 9271, 30459.1, 32401, 32440, 34010, 34019, 40211, 41007.2, 41021, 41028, 41030, 41171, 43160, 43522, 45867, 46622, 50156.11, 55332, 55381, and 60636 of, to add Sections 6834, 9036, 30354.6, 32387.1, 38578, 40169, 41127.9, 41163, 43450, 45611, 46467, 50138.9, 55191, 55212, and 60496 to, and to add the heading of Chapter 1 (commencing with Section 34010), the heading of Chapter 2 (commencing with Section 34011), and the heading of Chapter 3 (commencing with Section 34013) to Part 14.5 of Division 2 of, the Revenue and Taxation Code, relating to taxation.

[ Approved by Governor October 08, 2023. Filed with Secretary of State October 08, 2023. ]

LEGISLATIVE COUNSEL'S DIGEST

SB 889, Committee on Governance and Finance. California Department of Tax and Fee Administration: earnings withholding orders: settlement agreements: excise taxes.

(1) Existing law, the Wage Garnishment Law, sets forth procedures for the levy of a judgment debtor’s wages when required to enforce a money judgment.

This bill, for purposes of the Sales and Use Tax Law, the Use Fuel Tax Law, the Cigarette and Tobacco Products Tax Law, Alcoholic Beverage Tax Law, the Timber Yield Tax Law, the Energy Resources Surcharge Law, the Emergency Telephone Users Surcharge Act, the Hazardous Substances Tax Law, the Integrated Waste Management Fee Law, the Oil Spill Response, Prevention, and Administration Fees Law, the Underground Storage Tank Maintenance, the Diesel Fuel Tax Law, and various taxes and fees collected in accordance with the Fee Collections Procedures Law, would authorize the California Department of Tax and Fee Administration (CDTFA), or the State Board of Equalization (BOE) in the case of the Alcoholic Beverage Tax Law, to serve earnings withholding orders for taxes, fees, or surcharges, as applicable, and any other notice or document required to be served or provided in connection with an earnings withholding order according to the Wage Garnishment Law to government and private employers by electronic transmission or other electronic technology, as provided.

(2) The CDTFA administers various taxes, fees, and surcharges in accordance with the Fee Collections Procedures Law, including, among others, the Lead-Acid Battery Recycling Act of 2016, the Electronic Waste Recycling Act of 2003, and the Healthy Outcomes and Prevention Education (HOPE) Act.

This bill would specify that a feepayer subject to liability under the Sales and Use Tax Law is also subject to liability for the same periods for taxes, fees, and surcharges administered pursuant to the Fee Collections Procedures Law, as applicable.

(3) Existing law authorizes the CDTFA to enter into settlement agreements regarding protests, appeals, or refund claims for certain taxes and fees if it is determined that the settlement amount is consistent with a reasonable evaluation of the costs and risks associated with litigation. Existing law authorizes the executive director or the chief counsel to recommend a settlement and to approve a settlement on the advice of the Attorney General. Existing law requires joint approval from the executive director and chief counsel for settlements involving a reduction of tax or penalties in settlement not exceeding $5,000.

This bill would specify that the director, rather than the department, is authorized to make various decisions pertaining to settlements, and would require the approval of only the director. The bill would, instead, require the Attorney General to advise only the chief counsel. The bill would remove the joint approval requirement for settlements involving a reduction of tax and penalties in settlement not exceeding $5,000, leaving approval solely to the discretion of the director, and would increase that $5,000 limitation to $11,500. Commencing July 1, 2029, and every 5th fiscal year thereafter, the bill would require the department to adjust for inflation the $11,500 limitation concerning settlements involving a reduction of tax and penalties by using the California Consumer Price Index, as calculated by the Department of Finance.

Under the existing settlement authority, the executive director is required to create a public record of reduction of tax or penalties or total tax and penalties in settlement in excess of $500. Under existing law, the public record is required to include the name or names of the taxpayers who are parties to the settlement, the total amount in dispute, the amount agreed to pursuant to the settlement, a summary of the reasons why the settlement is in the best interests of the State of California, and, for any settlement approved by the department, the Attorney General’s conclusion as to whether the recommendation of settlement was reasonable from an overall perspective. Existing law also requires the existing settlement proceedings undertaken by the department to be conducted in a closed session.

This bill would exempt settlements requiring the approval of only the director from the requirement to include the Attorney General’s conclusion as to whether the recommendation of settlement was reasonable from an overall perspective. The bill would also remove the requirement that the proceedings be conducted in a closed session.

This bill would apply the changes made to these settlement provisions only to settlements approved on or after January 1, 2024.

(4) Existing law, the Fee Collection Procedures Law, makes it unlawful for any state agency, or any person having an administrative duty under those provisions, to disclose any information pertaining to a feepayer, as defined, that was submitted in a report or return required by those provisions. Existing law establishes an exception to this prohibition for specified information provided to directly interested successors, receivers, trustees, executors, administrators, assignees, and guarantors of a feepayer.

This bill would expand that exception to include information provided to directly interested predecessors.

(5) The Sales and Use Tax Law exempts from the sales and use taxes the gross receipts from the sales in bulk of monetized bullion, nonmonetized gold and silver bullion, and numismatic coins, and the storage, use, or other consumption of those bullion and coins, as provided, and requires the department to adjust the initial bulk threshold amount on or before October 1.

This bill, for the January 1, 2023, adjustment, would change the operative adjustment date to July 1, 2023, and beginning with the January 1, 2024, adjustment, would change the operative adjustment date to the first day of the 2nd calendar quarter beginning after the effective date of the amendments incorporating the increase in the operative threshold into the department’s regulations.

(6) The Alcoholic Beverage Tax Law requires the BOE to refund the excess balance of a tax, penalty, or interest that has been paid more than once or has been erroneously or illegally collected or computed, if the BOE makes a specified determination. That law also requires the BOE to cancel any amount illegally determined, either by the BOE or the person filing the return. Under those laws, if the amount canceled or refunded is in excess of $50,000 the BOE is required to make the determination a public record 10 days prior to the effective date of the determination.

This bill would instead require the BOE to make the determination a public record for 10 days after the effective date of the determination.

(7) Existing law, Emergency Telephone Users Surcharge Act, on and after January 1, 2020, imposes a 911 surcharge on each access line for each month or part thereof for which a service user subscribes with a service supplier, and beginning January 1, 2023, imposes a separate 988 surcharge on each access line for each month or part thereof for which a service user subscribes with a service supplier. The act defines an access line for these purposes to include, among other things, a wireline communications service, and defines that as a local exchange service provided at a physical location in this state that allows the user to make an outbound communication to the 911 emergency communications, to the 988 Suicide and Crisis Lifeline, and commencing January 1, 2023, to the 988 Suicide and Crisis Lifeline as defined in the Miles Hall Lifeline and Suicide Prevention Act.

This bill would instead define wireline communications service as a local exchange service provided at a physical location in this state that allows the user to make an outbound communication to the 911 emergency communications and commencing January 1, 2023, to the 988 Suicide and Crisis Lifeline as defined in the Miles Hall Lifeline and Suicide Prevention Act. The bill would make additional changes relating to the administration of the act.

This bill would additionally require the department to conduct an annual hearing to allow industry representatives and individual taxpayers to present proposals on changes to the act to further improve voluntary compliance and the relationship between taxpayers and the government.

(8) Existing law, the Hazardous Substances Tax Law, imposes various taxes and fees relating to the generation, handling, and disposal of hazardous substances, as specified. Existing law requires each feepayer to file an annual return with the California Department of Tax and Fee Administration to make those payments, and requires the feepayer to file a closing return upon the transfer or discontinuance of hazardous waste operations, as provided.

This bill, for purposes of the Hazardous Substances Tax Law, would instead only require specified feepayers subject to a fee relating to occupational lead poisoning to file a closing return, as provided.

(9) This bill would also make various technical and conforming changes to each of these laws, including to the Cannabis Tax Law, and would update references to the State Board of Equalization to instead refer to the CDTFA.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

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

SECTION 1.

Section 6355 of the Revenue and Taxation Code is amended to read:

6355.

(a) There are exempted from the taxes imposed by this part the gross receipts from the sale in bulk of monetized bullion, nonmonetized gold or silver bullion, and numismatic coins that are substantially equivalent to transactions in securities or commodities through a national securities or commodities exchange and the storage, use, or other consumption in this state of monetized bullion, nonmonetized gold or silver bullion, and numismatic coins so sold.

(b) (1) A sale in bulk, for purposes of this section, shall be deemed to have occurred if the amount of monetized bullion, nonmonetized gold or silver bullion, and numismatic coins sold in the transaction totals, in market value, the sum of one thousand dollars ($1,000) or more, or its equivalent.

(2) The department shall adjust the one-thousand-dollar ($1,000) amount specified in paragraph (1) as follows:

(A) On or before September 1, 1994, and on or before each October 1 of each year thereafter, the department shall multiply the amount applicable for the current calendar year by the inflation factor adjustment determined by the Franchise Tax Board pursuant to subdivision (h) of Section 17041, the resulting amount to be the applicable amount for the succeeding calendar year. The applicable amount shall be operative as an adjustment of the amount specified in paragraph (1) only when the applicable amount computed is equal to or exceeds a new operative threshold, as defined in subparagraph (C).

(B) When the applicable amount equals or exceeds an operative threshold specified in subparagraph (C), the resulting applicable amount, rounded to the nearest multiple of five hundred dollars ($500), shall be operative for purposes of paragraph (1) beginning January 1 of the succeeding calendar year.

(C) For purposes of this paragraph, “operative threshold” means an amount that exceeds by at least five hundred dollars ($500), the greater of either the amount specified in paragraph (1) or the amount computed pursuant to subparagraphs (A) and (B) as the operative adjustment to the amount specified in paragraph (1).

(3) Notwithstanding paragraph (2), the following shall apply:

(A) The January 1, 2023, increase in the operative threshold pursuant to paragraph (2) shall be operative July 1, 2023.

(B) Beginning on or after January 1, 2024, increases in the operative threshold pursuant to paragraph (2) shall be operative the first day of the second calendar quarter beginning after the effective date of amendments incorporating the increase in the operative threshold into the department’s regulations.

(c) “Monetized bullion,” for purposes of this section, means coins or other forms of money manufactured of gold, silver, or other metal and heretofore, now, or hereafter used as a medium of exchange under the laws of this state, the United States, or any foreign nation. “Monetized bullion,” for purposes of this section, also means gold medallions struck under authority of the American Arts Gold Medallion Act (Title IV of Public Law 95-630).

(d) A sale of monetized bullion, nonmonetized gold or silver bullion, or numismatic coins, for purposes of this section, shall be deemed to be substantially equivalent to a transaction in securities or commodities through a national securities or commodities exchange, if the sale is by or through a person registered pursuant to the Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.) or not required to be registered under the Commodity Exchange Act.

SEC. 2.

Section 6834 is added to the Revenue and Taxation Code, to read:

6834.

(a) Notwithstanding Sections 706.071, 706.073, 706.080, 706.101, and 706.105 of the Code of Civil Procedure, the California Department of Tax and Fee Administration may serve earnings withholding orders for taxes and any other notice or document required to be served or provided in connection with an earnings withholding order for taxes according to Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure to government and private employers by electronic transmission or other electronic technology.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(c) Notwithstanding Sections 706.071, 706.073, 706.080, 706.101, 706.125, and 706.126 of the Code of Civil Procedure, the California Department of Tax and Fee Administration may receive the employer’s return, as described in Section 706.126 of the Code of Civil Procedure, by electronic transmission or other electronic technology.

(d) This section shall apply in the same manner and with the same force and effect and to the full extent as if this section had been incorporated in full into Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 3.

Section 7093.5 of the Revenue and Taxation Code is amended to read:

7093.5.

(a) It is the intent of the Legislature that the department, its staff, and the Attorney General pursue settlements as authorized under this section with respect to civil tax matters in dispute that are the subject of protests, appeals, or refund claims, consistent with a reasonable evaluation of the costs and risks associated with litigation of these matters.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel in writing of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(2) (A) A settlement of any civil tax matter in dispute involving a reduction of tax or penalties in settlement, the total of which reduction of tax and penalties in settlement does not exceed eleven thousand five hundred dollars ($11,500), may be approved by the director.

(B) Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance, with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.

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

(1) The name or names of the taxpayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(5) (A) For any settlement approved by the director, except those settlements approved pursuant to paragraph (2) of subdivision (b), the Attorney General’s conclusion as to whether the recommendation of settlement was reasonable from an overall perspective.

(B) The public record shall not include any information that relates to any trade secret, patent, process, style of work, apparatus, business secret, or organizational structure that, if disclosed, would adversely affect the taxpayer or the national defense.

(d) The director shall not participate in the settlement of tax matters pursuant to this section, except as provided in subdivision (e).

(e) (1) Any recommendation for settlement shall be approved or disapproved by the director, within 45 days of the submission of that recommendation to the director. Any recommendation for settlement that is not either approved or disapproved by the director within 45 days of the submission of that recommendation shall be deemed approved.

(2) Where the director disapproves a recommendation for settlement, at the discretion of the director and chief counsel, the matter shall be remanded to staff for further negotiation, and may be resubmitted to the director, in the same manner and subject to the same requirements as the initial submission.

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) Except as provided in subdivision (c), any settlement considered or entered into pursuant to this section shall constitute confidential tax information for purposes of Section 7056.

(h) The Legislature finds that it is essential for fiscal purposes that the settlement program authorized by this section be expeditiously implemented. Accordingly, 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 determination, rule, notice, or guideline established or issued by the department in implementing and administering the settlement program authorized by this section.

(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 4.

Section 9036 is added to the Revenue and Taxation Code, to read:

9036.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 5.

Section 9271 of the Revenue and Taxation Code is amended to read:

9271.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

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

(1) The name or names of the taxpayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of tax matters pursuant to this section, except as provided in subdivision (e).

(e) (1) Any recommendation for settlement shall be approved or disapproved by the director within 45 days of the submission of that recommendation to the director. Any recommendation for settlement that is not either approved or disapproved by the director within 45 days of the submission of that recommendation shall be deemed approved.

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) Except as provided in subdivision (c), any settlement considered or entered into pursuant to this section shall constitute confidential tax information for purposes of Section 9255.

(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 6.

Section 30354.6 is added to the Revenue and Taxation Code, to read:

30354.6.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 7.

Section 30459.1 of the Revenue and Taxation Code is amended to read:

30459.1.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

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

(1) The name or names of the taxpayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(5) (A) For any settlement approved by the director, except for those settlements approved pursuant to paragraph (2) of subdivision (b), the Attorney General’s conclusion as to whether the recommendation of settlement was reasonable from an overall perspective.

(d) The director shall not participate in the settlement of tax matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) Except as provided in subdivision (c), any settlement considered or entered into pursuant to this section shall constitute confidential tax information for purposes of Section 30455.

(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 8.

Section 32387.1 is added to the Revenue and Taxation Code, to read:

32387.1.

(a) Notwithstanding Sections 706.071, 706.073, 706.080, 706.101, and 706.105 of the Code of Civil Procedure, the board may serve earnings withholding orders for taxes and any other notice or document required to be served or provided in connection with an earnings withholding order for taxes according to Article 4 (commencing with Section 706.070) of Chapter 5 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure to government and private employers by electronic transmission or other electronic technology.

(b) Upon consent of the employer, the board may provide service by electronic transmission or other electronic technology under this section.

(c) Notwithstanding Sections 706.071, 706.073, 706.080, 706.101, 706.125, and 706.126 of the Code of Civil Procedure, the board may receive the employer’s return, as described in Section 706.126 of the Code of Civil Procedure, by electronic transmission or other electronic technology.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 9.

Section 32401 of the Revenue and Taxation Code is amended to read:

32401.

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

SEC. 10.

Section 32440 of the Revenue and Taxation Code is amended to read:

32440.

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

SEC. 11.

The heading of Chapter 1 (commencing with Section 34010) is added to Part 14.5 of Division 2 of the Revenue and Taxation Code, to read:

CHAPTER 1. General Provisions and Definitions

SEC. 12.

Section 34010 of the Revenue and Taxation Code is amended to read:

34010.

This part shall be known, and may be cited, as the “Cannabis Tax Law.” For purposes of this part:

(a) “2020–21 fiscal year baseline” means the total amount of funds disbursed in the sub-trust accounts in fiscal year 2021–22 for the third allocation of the fiscal year 2020–21 revenue, pursuant to subdivision (f) of Section 34019, as determined by the Department of Finance.

(b) “Arm’s length transaction” shall mean a sale entered into in good faith and for valuable consideration that reflects the fair market value in the open market between two informed and willing parties, neither under any compulsion to participate in the transaction.

(1) (A) In an arm’s length transaction, the average retail price determined by the wholesale cost of the cannabis or cannabis products sold or transferred to a cannabis retailer, plus a mark-up, as determined by the department on a biannual basis in six-month intervals on or before July 1, 2022.

(B) Notwithstanding subparagraph (A), the department shall not increase the mark-up amount during the period beginning on and after the operative date of the act amending this section by adding this subparagraph and before July 1, 2021.

(2) In a nonarm’s length transaction, the cannabis retailer’s gross receipts from the retail sale of the cannabis or cannabis products.

(d) “Cannabis” has the same meaning as set forth in Section 11018 of the Health and Safety Code and shall also mean medicinal cannabis.

(e) “Cannabis products” has the same meaning as set forth in Section 11018.1 of the Health and Safety Code and shall also mean medicinal concentrates and medicinal cannabis products.

(f) “Cannabis flowers” means the dried flowers of the cannabis plant as defined by the department.

(g) “Cannabis leaves” means all parts of the cannabis plant other than cannabis flowers that are sold or consumed.

(h) “Cannabis retailer” means a person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code as a retailer, non-storefront retailer, microbusiness, or nonprofit, or any other person otherwise authorized under Division 10 (commencing with Section 26000) of the Business and Professions Code to engage in retail sales.

(i) “Cultivator” means all persons required to be licensed to cultivate cannabis pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.

(j) “Department” means the California Department of Tax and Fee Administration or its successor agency.

(k) “Designated for donation” means medicinal cannabis donated by a cultivator to a cannabis retailer for subsequent donation to a medicinal cannabis patient pursuant to Section 26071 of the Business and Professions Code.

(l) “Distributor” means a person required to be licensed as a distributor pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.

(m) “Enters the commercial market” means cannabis or cannabis products, except for immature cannabis plants and seeds, that complete and comply with a quality assurance review and testing, as described in Section 26110 of the Business and Professions Code.

(n) “Gross receipts” has the same meaning as set forth in Section 6012.

(o) “Manufacturer” means a person required to be licensed as a manufacturer pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.

(p) “Medicinal cannabis patient” means a qualified patient, as defined in Section 11362.7 of the Health and Safety Code, who possesses a physician’s recommendation that complies with Article 25 (commencing with Section 2525) of Chapter 5 of Division 2 of the Business and Professions Code, or a qualified patient or primary caregiver for a qualified patient issued a valid identification card pursuant to Section 11362.71 of the Health and Safety Code.

(q) “Microbusiness” has the same meaning as set forth in Section 26001 of the Business and Professions Code.

(r) “Nonprofit” has the same meaning as set forth in Section 26070.5 of the Business and Professions Code.

(s) “Person” has the same meaning as set forth in Section 6005.

(t) “Retail sale” has the same meaning as set forth in Section 6007.

(u) “Sale” and “purchase” mean any change of title or possession, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, for consideration.

(v) “Sub-trust accounts” means the sub-trust accounts created under subdivision (f) of Section 34019.

(w) “Tax fund” means the California Cannabis Tax Fund created by Section 34018.

(x) “Transfer” means to grant, convey, hand over, assign, sell, exchange, or barter, in any manner or by any means, with or without consideration.

(y) “Unprocessed cannabis” includes cannabis flowers, cannabis leaves, or other categories of harvested cannabis, categories for unprocessed or frozen cannabis or immature plants, or cannabis that is shipped directly to manufacturers.

SEC. 13.

The heading of Chapter 2 (commencing with Section 34011) is added to Part 14.5 of Division 2 of the Revenue and Taxation Code, to read:

CHAPTER 2. Cannabis Taxes

SEC. 14.

The heading of Chapter 3 (commencing with Section 34013) is added to Part 14.5 of Division 2 of the Revenue and Taxation Code, to read:

CHAPTER 3. Administration

SEC. 15.

Section 34019 of the Revenue and Taxation Code is amended to read:

34019.

(a) (1) For each fiscal year, the Department of Finance shall estimate revenues to be received pursuant to Sections 34011, 34011.2, and 34012 and provide those estimates to the Controller no later than June 15 of each year. The Controller shall use these estimates when disbursing funds pursuant to this section. Except as provided in paragraph (2), before any funds are disbursed pursuant to subdivisions (b), (c), (d), and (e) of this section, the Controller shall disburse from the tax fund to the appropriate account, without regard to fiscal year, the following:

(A) Reasonable costs incurred by the department for administering and collecting the taxes imposed by this part, except that such costs shall not exceed 4 percent of tax revenues received.

(B) Reasonable costs incurred by the Department of Cannabis Control for implementing, administering, and enforcing Division 10 (commencing with Section 26000) of the Business and Professions Code to the extent those costs are not reimbursed pursuant to Section 26180 of the Business and Professions Code. This paragraph shall remain operative through the 2022–23 fiscal year.

(C) Reasonable costs incurred by the Department of Fish and Wildlife, the State Water Resources Control Board, and the Department of Pesticide Regulation for carrying out their respective duties under Division 10 (commencing with Section 26000) of the Business and Professions Code to the extent those costs are not otherwise reimbursed.

(D) Reasonable costs incurred by the Governor’s Office of Business and Economic Development for implementing, administering, and enforcing Chapter 23 (commencing with Section 26240) of Division 10 of the Business and Professions Code.

(E) Reasonable costs incurred by the Controller for performing duties imposed by the Control, Regulate and Tax Adult Use of Marijuana Act, including the audit required by Section 34020.

(F) Reasonable costs incurred by the Department of Finance for conducting the performance audit pursuant to Section 26191 of the Business and Professions Code.

(G) Reasonable costs incurred by the Legislative Analyst’s Office for performing duties imposed by Section 34017.

(H) Sufficient funds to reimburse the Division of Labor Standards Enforcement and the Division of Occupational Safety and Health within the Department of Industrial Relations and the Employment Development Department for the costs of applying and enforcing state labor laws to licensees under Division 10 (commencing with Section 26000) of the Business and Professions Code.

(2) Notwithstanding paragraph (1), the Controller shall not make disbursements pursuant to subparagraph (A), (B), (C), (E) or (H) for the 2022–23 and 2023–24 fiscal years.

(b) The Controller shall next disburse the sum of ten million dollars ($10,000,000) to a public university or universities in California annually beginning with the 2018–19 fiscal year until the 2028–29 fiscal year to research and evaluate the implementation and effect of the Control, Regulate and Tax Adult Use of Marijuana Act, and shall, if appropriate, make recommendations to the Legislature and Governor regarding possible amendments to the Control, Regulate and Tax Adult Use of Marijuana Act. The recipients of these funds shall publish reports on their findings at a minimum of every two years and shall make the reports available to the public. The Department of Cannabis Control shall select the universities to be funded. The research funded pursuant to this subdivision shall include but not necessarily be limited to:

(1) Impacts on public health, including health costs associated with cannabis use, as well as whether cannabis use is associated with an increase or decrease in use of alcohol or other drugs.

(2) The impact of treatment for maladaptive cannabis use and the effectiveness of different treatment programs.

(3) Public safety issues related to cannabis use, including studying the effectiveness of the packaging and labeling requirements and advertising and marketing restrictions contained in the act at preventing underage access to and use of cannabis and cannabis products, and studying the health-related effects among users of varying potency levels of cannabis and cannabis products.

(4) Cannabis use rates, maladaptive use rates for adults and youth, and diagnosis rates of cannabis-related substance use disorders.

(5) Cannabis market prices, illicit market prices, tax structures and rates, including an evaluation of how to best tax cannabis based on potency, and the structure and function of licensed cannabis businesses.

(6) Whether additional protections are needed to prevent unlawful monopolies or anticompetitive behavior from occurring in the adult-use cannabis industry and, if so, recommendations as to the most effective measures for preventing such behavior.

(7) The economic impacts in the private and public sectors, including, but not necessarily limited to, job creation, workplace safety, revenues, taxes generated for state and local budgets, and criminal justice impacts, including, but not necessarily limited to, impacts on law enforcement and public resources, short- and long-term consequences of involvement in the criminal justice system, and state and local government agency administrative costs and revenue.

(8) Whether the regulatory agencies tasked with implementing and enforcing the Control, Regulate and Tax Adult Use of Marijuana Act are doing so consistent with the purposes of the act, and whether different agencies might do so more effectively.

(9) Environmental issues related to cannabis production and the criminal prohibition of cannabis production.

(10) The geographic location, structure, and function of licensed cannabis businesses, and demographic data, including race, ethnicity, and gender, of licenseholders.

(11) The outcomes achieved by the changes in criminal penalties made under the Control, Regulate and Tax Adult Use of Marijuana Act for cannabis-related offenses, and the outcomes of the juvenile justice system, in particular, probation-based treatments and the frequency of up-charging illegal possession of cannabis or cannabis products to a more serious offense.

(c) The Controller shall next disburse the sum of three million dollars ($3,000,000) annually to the Department of the California Highway Patrol beginning with the 2018–19 fiscal year until the 2022–23 fiscal year to establish and adopt protocols to determine whether a driver is operating a vehicle while impaired, including impairment by the use of cannabis or cannabis products, and to establish and adopt protocols setting forth best practices to assist law enforcement agencies. The Department of the California Highway Patrol may hire personnel to establish the protocols specified in this subdivision. In addition, the Department of the California Highway Patrol may make grants to public and private research institutions for the purpose of developing technology for determining when a driver is operating a vehicle while impaired, including impairment by the use of cannabis or cannabis products.

(d) The Controller shall next disburse the sum of ten million dollars ($10,000,000) beginning with the 2018–19 fiscal year and increasing ten million dollars ($10,000,000) each fiscal year thereafter until the 2022–23 fiscal year, at which time the disbursement shall be fifty million dollars ($50,000,000) each year thereafter, to the Governor’s Office of Business and Economic Development, in consultation with the Labor and Workforce Development Agency and the State Department of Social Services, to administer a community reinvestments grants program to local health departments and at least 50 percent to qualified community-based nonprofit organizations to support job placement, mental health treatment, substance use disorder treatment, system navigation services, legal services to address barriers to reentry, and linkages to medical care for communities disproportionately affected by past federal and state drug policies. The office shall solicit input from community-based job skills, job placement, and legal service providers with relevant expertise as to the administration of the grants program. In addition, the office shall periodically evaluate the programs it is funding to determine the effectiveness of the programs, shall not spend more than 4 percent for administrative costs related to implementation, evaluation, and oversight of the programs, and shall award grants annually, beginning no later than January 1, 2020.

(e) The Controller shall next disburse the sum of two million dollars ($2,000,000) annually to the University of California San Diego Center for Medicinal Cannabis Research to further the objectives of the center, including the enhanced understanding of the efficacy and adverse effects of cannabis as a pharmacological agent.

(f) By July 15 of each fiscal year beginning in the 2018–19 fiscal year, the Controller shall, after disbursing funds pursuant to subdivisions (a), (b), (c), (d), and (e), disburse funds deposited in the tax fund during the prior fiscal year into sub-trust accounts, which are hereby created, as follows:

(1) Sixty percent shall be deposited in the Youth Education, Prevention, Early Intervention and Treatment Account, and disbursed by the Controller to the State Department of Health Care Services for programs for youth that are designed to educate about and to prevent substance use disorders and to prevent harm from substance use. The State Department of Health Care Services shall enter into interagency agreements with the State Department of Public Health and the State Department of Education to implement and administer these programs. The programs shall emphasize accurate education, effective prevention, early intervention, school retention, and timely treatment services for youth, their families, and caregivers. The programs may include, but are not limited to, the following components:

(A) Prevention and early intervention services including outreach, risk survey and education to youth, families, caregivers, schools, primary care health providers, behavioral health and substance use disorder service providers, community and faith-based organizations, foster care providers, juvenile and family courts, and others to recognize and reduce risks related to substance use, and the early signs of problematic use and of substance use disorders.

(B) Grants to schools to develop and support student assistance programs, or other similar programs, designed to prevent and reduce substance use, and improve school retention and performance, by supporting students who are at risk of dropping out of school and promoting alternatives to suspension or expulsion that focus on school retention, remediation, and professional care. Schools with higher than average dropout rates should be prioritized for grants.

(C) Grants to programs for outreach, education, and treatment for homeless youth and out-of-school youth with substance use disorders.

(D) Access and linkage to care provided by county behavioral health programs for youth, and their families and caregivers, who have a substance use disorder or who are at risk for developing a substance use disorder.

(E) Youth-focused substance use disorder treatment programs that are culturally and gender competent, trauma informed, evidence based, and that provide a continuum of care that includes screening and assessment (substance use disorder as well as mental health), early intervention, active treatment, family involvement, case management, overdose prevention, prevention of communicable diseases related to substance use, relapse management for substance use and other cooccurring behavioral health disorders, vocational services, literacy services, parenting classes, family therapy and counseling services, medication-assisted treatments, psychiatric medication, and psychotherapy. When indicated, referrals must be made to other providers.

(F) To the extent permitted by law and where indicated, interventions shall utilize a two-generation approach to addressing substance use disorders with the capacity to treat youth and adults together. This would include supporting the development of family-based interventions that address substance use disorders and related problems within the context of families, including parents, foster parents, caregivers, and all their children.

(G) Programs to assist individuals, as well as families and friends of drug using young people, to reduce the stigma associated with substance use including being diagnosed with a substance use disorder or seeking substance use disorder services. This includes peer-run outreach and education to reduce stigma, anti-stigma campaigns, and community recovery networks.

(H) Workforce training and wage structures that increase the hiring pool of behavioral health staff with substance use disorder prevention and treatment expertise. Provide ongoing education and coaching that increases substance use treatment providers’ core competencies and trains providers on promising and evidenced-based practices.

(I) Construction of community-based youth treatment facilities.

(J) The State Department of Health Care Services, the State Department of Public Health, and the State Department of Education may contract with each county behavioral health program for the provision of services.

(K) Funds shall be allocated to counties based on demonstrated need, including the number of youth in the county, the prevalence of substance use disorders among adults, and confirmed through statistical data, validated assessments, or submitted reports prepared by the applicable county to demonstrate and validate need.

(L) The State Department of Health Care Services, State Department of Public Health, and the State Department of Education shall periodically evaluate the programs they are funding to determine the effectiveness of the programs.

(M) The State Department of Health Care Services, State Department of Public Health, and the State Department of Education may use up to 4 percent of the moneys allocated to the Youth Education, Prevention, Early Intervention and Treatment Account for administrative costs related to implementation, evaluation, and oversight of the programs.

(N) If the Department of Finance ever determines that funding pursuant to cannabis taxation exceeds demand for youth prevention and treatment services in the state, the State Department of Health Care Services, State Department of Public Health, and the State Department of Education shall provide a plan to the Department of Finance to provide treatment services to adults as well as youth using these funds.

(O) The State Department of Health Care Services, the State Department of Public Health, and the State Department of Education shall solicit input from volunteer health organizations, physicians who treat addiction, treatment researchers, family therapy and counseling providers, and professional education associations with relevant expertise as to the administration of any grants made pursuant to this paragraph.

(P) On or before July 10, 2023, the State Department of Health Care Services shall provide to the Legislature, pursuant to Section 9795 of the Government Code, a spending report of funds from the Youth Education, Prevention, Early Intervention and Treatment Account for the 2021–22 and 2022–23 fiscal years. On or before July 10, 2024, and annually thereafter, the State Department of Health Care Services shall provide to the Legislature, pursuant to Section 9795 of the Government Code, a spending report of funds from the Youth Education, Prevention, Early Intervention and Treatment Account for the prior fiscal year.

(2) Twenty percent shall be deposited in the Environmental Restoration and Protection Account, and disbursed by the Controller as follows:

(A) To the Department of Fish and Wildlife and the Department of Parks and Recreation for the cleanup, remediation, and restoration of environmental damage in watersheds affected by cannabis cultivation and related activities including, but not limited to, damage that occurred prior to enactment of this part, and to support local partnerships for this purpose. The Department of Fish and Wildlife and the Department of Parks and Recreation may distribute a portion of the funds they receive from the Environmental Restoration and Protection Account through grants for purposes specified in this paragraph.

(B) To the Department of Fish and Wildlife and the Department of Parks and Recreation for the stewardship and operation of state-owned wildlife habitat areas and state park units in a manner that discourages and prevents the illegal cultivation, production, sale, and use of cannabis and cannabis products on public lands, and to facilitate the investigation, enforcement, and prosecution of illegal cultivation, production, sale, and use of cannabis or cannabis products on public lands.

(C) To the Department of Fish and Wildlife to assist in funding the watershed enforcement program and multiagency taskforce established pursuant to subdivisions (b) and (c) of Section 12029 of the Fish and Game Code to facilitate the investigation, enforcement, and prosecution of these offenses and to ensure the reduction of adverse impacts of cannabis cultivation, production, sale, and use on fish and wildlife habitats throughout the state.

(D) For purposes of this paragraph, the Secretary of the Natural Resources Agency shall determine the allocation of revenues between the Department of Fish and Wildlife and the Department of Parks and Recreation. During the first five years of implementation, first consideration should be given to funding purposes specified in subparagraph (A).

(E) Funds allocated pursuant to this paragraph shall be used to increase and enhance activities described in subparagraphs (A), (B), and (C), and not replace allocation of other funding for these purposes. Accordingly, annual General Fund appropriations to the Department of Fish and Wildlife and the Department of Parks and Recreation shall not be reduced below the levels provided in the Budget Act of 2014 (Chapter 25 of the Statutes of 2014).

(3) Twenty percent shall be deposited into the State and Local Government Law Enforcement Account and disbursed by the Controller as follows:

(A) To the Department of the California Highway Patrol for conducting training programs for detecting, testing, and enforcing laws against driving under the influence of alcohol and other drugs, including driving under the influence of cannabis. The Department of the California Highway Patrol may hire personnel to conduct the training programs specified in this subparagraph.

(B) To the Department of the California Highway Patrol to fund internal California Highway Patrol programs and grants to qualified nonprofit organizations and local governments for education, prevention, and enforcement of laws related to driving under the influence of alcohol and other drugs, including cannabis; programs that help enforce traffic laws, educate the public in traffic safety, provide varied and effective means of reducing fatalities, injuries, and economic losses from collisions; and for the purchase of equipment related to enforcement of laws related to driving under the influence of alcohol and other drugs, including cannabis.

(C) To the Board of State and Community Corrections for making grants to local governments to assist with law enforcement, fire protection, or other local programs addressing public health and safety associated with the implementation of the Control, Regulate and Tax Adult Use of Marijuana Act. The board shall not make any grants to local governments that ban both indoor and outdoor commercial cannabis cultivation, or ban retail sale of cannabis or cannabis products pursuant to Section 26200 of the Business and Professions Code or as otherwise provided by law.

(D) For purposes of this paragraph, the Department of Finance shall determine the allocation of revenues between the agencies; provided, however, beginning in the 2022–23 fiscal year the amount allocated pursuant to subparagraph (A) shall not be less than ten million dollars ($10,000,000) annually and the amount allocated pursuant to subparagraph (B) shall not be less than forty million dollars ($40,000,000) annually. In determining the amount to be allocated before the 2022–23 fiscal year pursuant to this paragraph, the Department of Finance shall give initial priority to subparagraph (A).

(g) Funds allocated pursuant to subdivision (f) shall be used to increase the funding of programs and purposes identified and shall not be used to replace allocation of other funding for these purposes.

(h) Effective July 1, 2028, the Legislature may amend this section by majority vote to further the purposes of the Control, Regulate and Tax Adult Use of Marijuana Act, including allocating funds to programs other than those specified in subdivisions (d) and (f). Any revisions pursuant to this subdivision shall not result in a reduction of funds to accounts established pursuant to subdivisions (d) and (f) in any subsequent year from the amount allocated to each account in the 2027–28 fiscal year. Prior to July 1, 2028, the Legislature may not change the allocations to programs specified in subdivisions (d) and (f).

SEC. 16.

Section 38578 is added to the Revenue and Taxation Code, to read:

38578.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 17.

Section 40169 is added to the Revenue and Taxation Code, to read:

40169.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 18.

Section 40211 of the Revenue and Taxation Code is amended to read:

40211.

(a) It is the intent of the Legislature that the department, its staff, and the Attorney General pursue settlements as authorized under this section with respect to surcharge matters in dispute that are the subject of protests, appeals, or refund claims, consistent with a reasonable evaluation of the costs and risks associated with litigation of these matters.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(2) (A) A settlement of any civil surcharge matter in dispute involving a reduction of surcharge or penalties in settlement, the total of which reduction of surcharge and penalties in settlement does not exceed eleven thousand five hundred dollars ($11,500), may be approved by the director.

(B) Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.

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

(1) The name or names of the surcharge payers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of surcharge matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) The Legislature finds that it is essential for fiscal purposes that the settlement program authorized by this section be expeditiously implemented. Accordingly, 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 determination, rule, notice, or guideline established or issued by the department in implementing and administering the settlement program authorized by this section.

(h) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 19.

Section 41007.2 of the Revenue and Taxation Code is amended to read:

41007.2.

(a) “Wireline communications service” shall mean a local exchange service provided at a physical location in this state that allows the user to make an outbound communication to the 911 emergency communications system.

(b) For the purposes of the surcharge imposed by Chapter 2 (commencing with Section 41020):

(1) A wireline communications service access line does not include a direct inward dialing number, extension, or other similar feature that routes an inbound call and cannot provide access to the 911 emergency communications system.

(2) The number of surcharges imposed shall not exceed the total number of concurrent outbound calls that can be placed to the emergency communications system at a single point of time.

(d) Commencing January 1, 2023, a “wireline communications service” shall include a local exchange service provided at a physical location in this state that allows the user to make an outbound communication to the 988 Suicide and Crisis Lifeline, as defined in the Miles Hall Lifeline and Suicide Prevention Act (Article 6.3 (commencing with Section 53123.1) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code).

SEC. 20.

Section 41021 of the Revenue and Taxation Code is amended to read:

41021.

(a) A service supplier shall collect the surcharges from each service user at the time it collects its billings from the service user. The duty to collect the surcharges from a service user shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the operative date of the surcharge imposed by this part. If the stations or lines of more than one service supplier are utilized in furnishing the telephone communication services to the service user, the service supplier that bills the customer shall collect the surcharges from the customer.

(b) Only one payment per month under this part shall be required with respect to the surcharges on an access line.

SEC. 21.

Section 41028 of the Revenue and Taxation Code is amended to read:

41028.

(a) (1) On and after January 1, 2020, the surcharge amounts imposed by Section 41020 on the purchase of prepaid mobile telephony services in this state shall be collected by a seller from each prepaid consumer at the time of each retail transaction in this state. The surcharges shall be imposed at an amount as determined under Article 2 (commencing with Section 41030) on each retail transaction that occurs in this state.

(2) (A) The amount of the surcharges shall be separately stated on an invoice, receipt, or other similar document that is provided to the prepaid consumer of mobile telephony services by the seller, or otherwise disclosed electronically to the prepaid consumer, at the time of the retail transaction.

(B) Notwithstanding subparagraph (A), a seller may elect to combine the 911 and 988 surcharges into a single-line item. If the seller elects to combine the surcharges, the combined surcharge shall be labeled as the “911/988 Surcharge” on the invoice, receipt, or other similar document that is provided to the prepaid consumer of mobile telephony services by the seller, or otherwise disclosed electronically to the prepaid consumer, at the time of the retail transaction. The seller shall remit the combined surcharges to the department in separate amounts for each surcharge on forms prescribed by the department.

(b) (1) The surcharges that are required to be collected by a seller and any amount unreturned to the prepaid consumer of mobile telephony services that is not owed as part of the surcharges, but was collected from the prepaid consumer under the representation by the seller that it was owed as part of the surcharges, constitutes debts owed by the seller to this state.

(2) A seller that has collected any amount of surcharge in excess of the amount of the surcharges imposed by this part and actually due from a prepaid consumer may refund that amount to the prepaid consumer, even though the surcharge amounts have already been paid over to the department and a corresponding credit or refund has not yet been secured. The seller may claim credit for that overpayment refund against the amount of surcharges imposed by this part that is due upon any other return, providing that credit is claimed in a return dated no later than three years from the date of overpayment.

(c) (1) Every prepaid consumer of prepaid mobile telephony services in this state is liable for the surcharges until they have been paid to this state, except that payment to a seller registered under this part relieves the prepaid consumer from further liability for the surcharges. Any surcharge collected from a prepaid consumer that have not been remitted to the department shall be a debt owed to the state by the person required to collect and remit the surcharges. Nothing in this part shall impose any obligation upon a seller to take any legal action to enforce the collection of the surcharge imposed by this section.

(2) A credit shall be allowed against, but shall not exceed, the surcharge amounts imposed on any prepaid consumer of mobile telephony services by this part to the extent that the prepaid consumer has paid surcharges on the purchase to any other state, political subdivision thereof, or the District of Columbia. The credit shall be apportioned to the charges against which it is allowed in proportion to the amounts of those charges.

(d) A seller is relieved from liability to collect the surcharges imposed by this part that became due and payable, insofar as the base upon which the surcharges are imposed is represented by accounts that have been found to be worthless and charged off for income tax purposes by the seller or, if the seller is not required to file income tax returns, charged off in accordance with generally accepted accounting principles. A seller that has previously paid the surcharges may, under rules and regulations prescribed by the department take as a deduction on its return the amount found worthless and charged off by the seller. If any such accounts are thereafter in whole or in part collected by the seller, the amounts so collected shall be included in the first return filed after such collection and the surcharges shall be paid with the return.

(e) For purposes of this section, a retail transaction occurs in the state under any of the following circumstances:

(1) The prepaid consumer makes the retail transaction in person at a business location in the state (point-of-sale transaction).

(2) If paragraph (1) is not applicable, the prepaid consumer’s address is in the state (known-address transaction). A known-address transaction occurs in the state under any of the following circumstances:

(A) The retail sale involves shipping of an item to be delivered to, or picked up by, the prepaid consumer at a location in the state.

(B) If the prepaid consumer’s address is known by the seller to be in the state, including if the seller’s records maintained in the ordinary course of business indicate that the prepaid consumer’s address is in the state and the records are not made or kept in bad faith.

(C) The prepaid consumer provides an address during consummation of the retail transaction that is in the state, including an address provided with respect to the payment instrument if no other address is available and the address is not given in bad faith.

(3) If an address is not available to the seller to determine whether any of the circumstances in paragraph (2) exist, the transaction will be deemed to be a known-address transaction occurring in this state if the mobile telephone number is associated with a location in this state.

(f) The surcharge amounts imposed under this section shall be remitted by every seller, except a service supplier, as prescribed under Part 1 (commencing with Section 6001), along with a return filed using electronic media. The department shall administer such remittance and returns as prescribed under Part 1 (commencing with Section 6001).

(g) Notwithstanding Article 1.1 (commencing with Section 41060) of Chapter 4, any seller, except a service supplier, required, or that elects, to remit amounts due under Part 1 (commencing with Section 6001) by electronic funds transfer pursuant to Article 1.2 (commencing with Section 6479.3) of Chapter 5 of Part 1 shall remit the surcharge upon prepaid mobile telephony service amounts due under this section by electronic funds transfer.

(h) The purchase in a retail transaction in this state of prepaid mobile telephony services, either alone or in combination with mobile data or other services, by a prepaid consumer is exempt from the surcharges if all of the following apply:

(1) The prepaid consumer is certified as eligible for the state lifeline program or federal lifeline program.

(2) The seller is authorized to provide lifeline service under the state lifeline program or federal lifeline program.

SEC. 22.

Section 41030 of the Revenue and Taxation Code is amended to read:

41030.

(a) The Office of Emergency Services shall determine annually, on or before October 1, to be effective on January 1 of the following year, surcharge amounts pursuant to subdivision (b) that it estimates will produce sufficient revenue to fund the current fiscal year’s 911 and 988 costs.

(b) The surcharge amounts shall be determined annually by dividing the costs, including incremental costs, the Office of Emergency Services estimates for the current fiscal year of the following:

(1) The 911 costs approved pursuant to Article 6 (commencing with Section 53100) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code, less the available balance in the State Emergency Telephone Number Account in the General Fund, by its estimate of the number of access lines to which the surcharge will apply per month for the period of January 1 to December 31, inclusive, of the next succeeding calendar year, but in no event shall the surcharge amount in any month be greater than eighty cents ($0.80) per access line per month.

(2) For the 2023 and 2024 calendar years, the 988 surcharge shall be set at eight cents ($0.08) per access line per month.

(3) For determinations that are made applicable to the calendar year beginning on January 1, 2025, and each calendar year thereafter, the 988 surcharge shall be determined by dividing the 988 costs approved pursuant to Article 6.3 (commencing with Section 53123.1) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code, less the available balance in the 988 State Suicide and Behavioral Health Crisis Services Fund, by the Office of Emergency Services’ estimate of the number of access lines to which the surcharge will apply per month for the period of January 1 to December 31, inclusive, of the next succeeding calendar year, but in no event shall the surcharge amount in any month be greater than thirty cents ($0.30) per access line per month.

(c) When determining the 911 surcharge amount pursuant to this section, the office shall include the costs it expects to incur to plan, test, implement, and operate Next Generation 911 technology and services, including text to 911 service, and alerts and warnings, consistent with the plan and timeline required by Section 53121 of the Government Code.

(d) (1) Service suppliers shall report the total number of access lines to the Office of Emergency Services, on or before August 1, for the previous period of January 1 to December 31, inclusive.

(2) The total number of access lines required to be reported in paragraph (1) shall include all lines from the categories of wireline communication service line, wireless communication service line, prepaid mobile telephony service line, and VoIP service line. The number of access line figures shall be reported individually for these categories.

(3) Notwithstanding any other law, the Office of Emergency Services, within 45 days of receiving a request from the department, shall provide the department the name and address of each service supplier, each service supplier’s total number of access lines, as provided in paragraph (2) for the prior calendar year, and any other information the department deems necessary to conduct its responsibilities under this part.

(e) The office shall perform a validation of the number of access lines using subscription data or other comparable data collected by appropriate federal or state agencies. This subscription data or other comparable data shall be used to validate the access line data required to be reported by service suppliers in subdivision (d).

(f) (1) The office shall notify the department of the surcharge amount imposed under this part, determined pursuant to this section on or before October 1 of each year.

(2) The surcharge imposed on the purchase of prepaid mobile telephony services shall be equal to the amount set forth in subdivision (b) for each retail transaction in this state.

(g) (1) At least 30 days prior to determining the surcharge pursuant to subdivision (a), the Office of Emergency Services shall prepare a summary of the calculation of the proposed surcharge amounts and make it available to the public, the Legislature, the California Health and Human Services Agency and relevant departments, and on its internet website.

(2) For determinations made on or before October 1, 2019, the summary shall contain all of the following:

(A) The prior year revenues to fund 911 costs, including, but not limited to, revenues from prepaid service.

(B) Projected expenses and revenues from all sources, including, but not limited to, prepaid service to fund 911 costs.

(h) For purposes of this section, for the determination made by the office on or before October 1, 2019, that is applicable for the calendar year beginning on January 1, 2020, and ending on December 31, 2020, the following definitions shall apply:

(1) “Service supplier” shall mean a person supplying an access line to a service user in this state.

(2) “Service user” means any person that subscribes for the right to utilize an access line in this state who is required to pay a surcharge under the provisions of this part.

SEC. 23.

Section 41127.9 is added to the Revenue and Taxation Code, to read:

41127.9.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 24.

Section 41163 is added to the Revenue and Taxation Code, to read:

41163.

The department shall conduct an annual hearing to allow industry representatives and individual taxpayers to present proposals on changes to the Emergency Telephone Users Surcharge Act to further improve voluntary compliance and the relationship between taxpayers and the government.

SEC. 25.

Section 41171 of the Revenue and Taxation Code is amended to read:

41171.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(B) Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.

(1) The name or names of the surcharge payers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of surcharge matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(h) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 26.

Section 43160 of the Revenue and Taxation Code is amended to read:

43160.

Every person who is required to file the returns and make the payments specified in Section 43152.13 shall, upon transfer or discontinuance of operations, file closing returns on forms prescribed by the California Department of Tax and Fee Administration. The closing returns shall be due and payable on the last day of the month following the end of the quarterly period in which the transfer or discontinuance takes place.

SEC. 27.

Section 43450 is added to the Revenue and Taxation Code, to read:

43450.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 28.

Section 43522 of the Revenue and Taxation Code is amended to read:

43522.

(a) It is the intent of the Legislature that the California Department of Tax and Fee Administration, its staff, and the Attorney General pursue settlements as authorized under this section with respect to civil tax matters in dispute, which arise under Section 105190 or 105310 of the Health and Safety Code, that are the subject of protests, appeals, or refund claims, consistent with a reasonable evaluation of the costs and risks associated with litigation of these matters.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(c) Whenever a reduction of tax, or penalties, or total tax and penalties in settlement in excess of five hundred dollars ($500) is approved pursuant to this section, there shall be placed on file, for at least one year, in the office of the director of the California Department of Tax and Fee Administration a public record with respect to that settlement. The public record shall include all of the following information:

(1) The name or names of the taxpayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of tax matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) Except as provided in subdivision (c), any settlement considered or entered into pursuant to this section shall constitute confidential tax information for purposes of Section 43651.

(h) The Legislature finds that it is essential for fiscal purposes that the settlement program authorized by this section be expeditiously implemented. Accordingly, 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 determination, rule, notice, or guideline established or issued by the California Department of Tax and Fee Administration in implementing and administering the settlement program authorized by this section.

(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 29.

Section 45611 is added to the Revenue and Taxation Code, to read:

45611.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 30.

Section 45867 of the Revenue and Taxation Code is amended to read:

45867.

(a) It is the intent of the Legislature that the department, its staff, and the Attorney General pursue settlements as authorized under this section with respect to fee matters in dispute that are the subject of protests, appeals, or refund claims, consistent with a reasonable evaluation of the costs and risks associated with litigation of these matters.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(2) (A) A settlement of any civil fee matter in dispute involving a reduction of fee or penalties in settlement, the total of which reduction of fee and penalties in settlement does not exceed eleven thousand five hundred dollars ($11,500), may be approved by the director.

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

(1) The name or names of the feepayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of fee matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) Except as provided in subdivision (c), any settlement considered or entered into pursuant to this section shall constitute confidential information for purposes of Section 45982.

(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 31.

Section 46467 is added to the Revenue and Taxation Code, to read:

46467.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 32.

Section 46622 of the Revenue and Taxation Code is amended to read:

46622.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

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

(1) The name or names of the feepayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of fee matters pursuant to this section, except as provided in subdivision (e).

(e) (1) Any recommendation of settlement shall be approved or disapproved by the director within 45 days of the submission of that recommendation to the director. Any recommendation for settlement that is not either approved or disapproved by the director within 45 days of the submission of that recommendation shall be deemed approved.

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(h) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 33.

Section 50138.9 is added to the Revenue and Taxation Code, to read:

50138.9.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 34.

Section 50156.11 of the Revenue and Taxation Code is amended to read:

50156.11.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(B) Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.

(1) The name or names of the feepayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of fee matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(h) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 35.

Section 55191 is added to the Revenue and Taxation Code, to read:

55191.

(a) To the extent that a feepayer is subject to liability for sales and use taxes pursuant to Section 6071.1 or 6814, the feepayer is also subject to liability for the same periods for taxes, fees, and surcharges administered pursuant to Part 30 (commencing with Section 55001), as applicable.

(b) (1) For purposes of this section, “fees administered pursuant to Part 30 (commencing with Section 55001)” shall include, but are not limited to:

(A) A charge pursuant to the Lead-Acid Battery Recycling Act of 2016 (Article 10.5 (commencing with Section 25215) of Chapter 6.5 of Division 20 of the Health and Safety Code).

(B) A lumber products assessment pursuant to Article 9.5 (commencing with Section 4629) of Chapter 8 of Part 2 of Division 4 of the Public Resources Code.

(C) A covered electronic waste recycling fee pursuant to the Electronic Waste Recycling Act of 2003 (Chapter 8.5 (commencing with Section 42460) of Part 3 of Division 30 of the Public Resources Code).

(D) A California tire fee pursuant to Article 5 (commencing with Section 42885) of Chapter 17 of Part 3 of Division 30 of the Public Resources Code.

(E) A California electronic cigarette excise tax pursuant to the Healthy Outcomes and Prevention Education (HOPE) Act (Part 13.6 (commencing with Section 31000)).

(F) A cannabis excise tax pursuant to the Cannabis Tax Law (Part 14.5 (commencing with Section 34010)).

(2) “Fees administered pursuant to Part 30 (commencing with Section 55001)” shall not include the fee administered pursuant to Local Prepaid Mobile Telephony Services Collection Act (Part 21.1 (commencing with Section 42100)).

(c) This section shall be applied and administered in the same manner as specified in Sections 6071.1, 6811, 6812, 6813, 6814, and 6815.

SEC. 36.

Section 55212 is added to the Revenue and Taxation Code, to read:

55212.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 37.

Section 55332 of the Revenue and Taxation Code is amended to read:

55332.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director for approval unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(B) Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.

(1) The name or names of the feepayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of fee matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) Except as provided in subdivision (c), any settlement considered or entered into pursuant to this section shall constitute confidential information for purposes of Section 55381.

(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

SEC. 38.

Section 55381 of the Revenue and Taxation Code is amended to read:

55381.

(a) If the department collects a fee pursuant to this part on behalf of a state agency or pursuant to an interagency agreement with a state agency, or if the fee collected pursuant to this part is used to fund a program administered by a state agency, the department shall provide that state agency with any and all information obtained under this part relating to that fee.

(b) It shall be unlawful for the department, the state agency for which the department collects the fee, or any person having an administrative duty under this part to make known, in any manner whatsoever, the business affairs, operations, or any other information pertaining to a feepayer that was submitted to the department in a report or return required by this part, or to permit any report or copy thereof to be seen or examined by any person not expressly authorized by subdivision (a) and this subdivision. However, the Governor may, by general or special order, authorize examination of the records maintained by the department under this part by other state officers, by officers of another state, by the federal government, if a reciprocal arrangement exists, or by any other person. The information so obtained pursuant to the order of the Governor shall not be made public except to the extent and in the manner that the order may authorize that it be made public.

(c) Notwithstanding subdivision (b), the predecessors, successors, receivers, trustees, executors, administrators, assignees, and guarantors of a feepayer, if directly interested, may be given information regarding the determination of any unpaid fees or the amount of the fees, interest, or penalties required to be collected or assessed.

(d) Notwithstanding subdivision (b), information regarding the determination of any unpaid fees or the amount of the fees, interest, or penalties required to be collected or assessed may be disclosed to any agent of a vessel owner or operator subject to the fees imposed by Chapter 4 (commencing with Section 71215) of Division 36 of the Public Resources Code.

SEC. 39.

Section 60496 is added to the Revenue and Taxation Code, to read:

60496.

(b) Upon consent of the employer, the California Department of Tax and Fee Administration may provide service by electronic transmission or other electronic technology under this section.

(e) This section shall apply to notices served or provided on or after the effective date of the act adding this section.

SEC. 40.

Section 60636 of the Revenue and Taxation Code is amended to read:

60636.

(b) (1) Except as provided in paragraph (2), no recommendation of settlement shall be submitted to the director unless and until that recommendation has been submitted by the chief counsel to the Attorney General. Within 30 days of receiving that recommendation, the Attorney General shall review the recommendation and advise the chief counsel, in writing, of their conclusions as to whether the recommendation is reasonable from an overall perspective. The chief counsel shall, with each recommendation of settlement submitted to the director, also submit the Attorney General’s written conclusions obtained pursuant to this paragraph.

(B) Beginning on July 1, 2029, and each fifth fiscal year thereafter, the department shall adjust the amount specified in subparagraph (A) by increasing that amount by a percentage amount equal to the increase in the California Consumer Price Index, as calculated by the Department of Finance with the resulting amount rounded to the nearest one hundred dollars ($100). The first adjustment pursuant to this subparagraph shall be a percentage amount equal to the increase in the California Consumer Price Index from January 1, 2024, to January 1, 2029. Subsequent fifth fiscal year adjustments shall cover subsequent five-year periods. The incremental change shall be added to the previously adjusted amount.

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

(1) The name or names of the taxpayers who are parties to the settlement.

(2) The total amount in dispute.

(3) The amount agreed to pursuant to the settlement.

(4) A summary of the reasons why the settlement is in the best interests of the State of California.

(d) The director shall not participate in the settlement of tax matters pursuant to this section, except as provided in subdivision (e).

(f) All settlements entered into pursuant to this section shall be final and nonappealable, except upon a showing of fraud or misrepresentation with respect to a material fact.

(g) Except as provided in subdivision (c), any settlement considered or entered into pursuant to this section shall constitute confidential tax information for purposes of Section 60609.

(i) The amendments made to this section by the act adding this subdivision shall apply to any settlements approved on or after January 1, 2024.

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Bill Text: CA SB889 | 2023-2024 | Regular Session | Chaptered

California Senate Bill 889

LEGISLATIVE COUNSEL'S DIGEST

Digest Key

Bill Text

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

SECTION 1.

6355.

SEC. 2.

6834.

SEC. 3.

7093.5.

SEC. 4.

9036.

SEC. 5.

9271.

SEC. 6.

30354.6.

SEC. 7.

30459.1.

SEC. 8.

32387.1.

SEC. 9.

32401.

SEC. 10.

32440.

SEC. 11.

CHAPTER 1. General Provisions and Definitions

SEC. 12.

34010.

SEC. 13.

CHAPTER 2. Cannabis Taxes

SEC. 14.

CHAPTER 3. Administration

SEC. 15.

34019.

SEC. 16.

38578.

SEC. 17.

40169.

SEC. 18.

40211.

SEC. 19.

41007.2.

SEC. 20.

41021.

SEC. 21.

41028.

SEC. 22.

41030.

SEC. 23.

41127.9.

SEC. 24.

41163.

SEC. 25.

41171.

SEC. 26.

43160.

SEC. 27.

43450.

SEC. 28.

43522.

SEC. 29.

45611.

SEC. 30.

45867.

SEC. 31.

46467.

SEC. 32.

46622.

SEC. 33.

50138.9.

SEC. 34.

50156.11.

SEC. 35.

55191.

SEC. 36.

55212.

SEC. 37.