BILL NUMBER: AB 2914	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 8, 2008
	AMENDED IN ASSEMBLY  APRIL 3, 2008

INTRODUCED BY   Assembly Member Charles Calderon
    (   Principal coauthor:   Assembly Member
  Galgiani   ) 

                        FEBRUARY 22, 2008

   An act to amend Sections 6011 and 6012 of,  and to add
Part 14.5 (commencing with Section 33001) to Division 2 of, the
  to add Sections 6051.9 and 6201.9 to, and to add Part
14.5 (commencing with Section 33001), Part 14.7 (commencing with
Section 33100), and Part 32 (commencing with Section 60131) to,
Division 2 of, the  Revenue and Taxation Code, relating to
taxation, to take effect immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2914, as amended, Charles Calderon.  Taxation: Adult
Entertainment Venue Impact Fund.
   The Sales and Use Tax Law imposes a tax on the sale of or the
storage, use, or other consumption of, tangible personal property in
this state at specified rates. 
   This bill would impose a tax on the sale of, or the storage, use,
or other consumption of, tangible personal property that is adult
material, as defined, in this state at a rate of 25%. This bill would
express the intent of the Legislature that all revenues, less
refunds and the costs of the administration of the tax, derived from
the tax be transferred to the Adult Entertainment Venue Impact Fund,
which would be created by this bill. 
   This bill would, in addition, impose a tax on gross receipts, as
defined, of an adult entertainment venue, as defined, in this state
at a rate of  8%   25%  . The tax would
generally be collected, administered, and enforced in the same manner
as the  taxes imposed   fees administered 
under the  Sales and Use Tax   Fee Collection
Procedures  Law. This bill would  create the Adult
Entertainment Venue Impact Fund and  express the intent of
the Legislature that all revenues, less refunds and the costs of the
administration of the tax, derived from the tax be transferred to the
 fund   Adult Entertainment Venue Impact Fund
 . This bill would provide that moneys in the fund, upon
appropriation by the Legislature, be used to ameliorate the secondary
effects of  adult entertainment and  adult entertainment
venues, as provided.  This bill makes findings and
declarations with regard to adult entertainment venues and the
imposition of this tax.  
   Existing law imposes various taxes with respect to the sale, use,
or distribution of various products sold in this state.  
   This bill would impose a tax at the rate of 25% on the total gross
charges, as defined, incurred by a purchaser for the pay-per-view
viewing of adult entertainment movies, as provided. This bill would
express the intent of the Legislature that all revenues, less refunds
and the costs of the administration of the tax, derived from the tax
be transferred to the Adult Entertainment Venue Impact Fund. 

   This bill would also impose a tax at the rate of 25% of the
qualified gross receipts of a qualified business, as defined, where
the business has more than 50% of its gross receipts derived from the
production, distribution, or sales of adult entertainment movies or
videos, as provided.  
   This bill makes findings and declarations with regard to adult
entertainment, adult entertainment venues, and adult entertainment
merchandise and the taxes imposed by this bill. 
   This bill would result in a change in state taxes for the purpose
of increasing state revenues within the meaning of Section 3 of
Article XIII A of the California Constitution, and thus would require
for passage the approval of 2/3 of the membership of each house of
the Legislature.
   This bill would take effect immediately as a tax levy.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares all
of the following:  
   (a) A substantial percentage of adult entertainment and adult
entertainment merchandise is produced in California.  
   (b) The in-state production of adult entertainment and adult
entertainment merchandise has numerous negative secondary effects on
the people of this state. Specifically, the production of adult
entertainment and adult entertainment merchandise:  
   (1) Increases crime at or near production locations.  
   (2) Adversely impacts the mental health of, and leads to increased
alcohol and substance abuse by, those involved in the production of
adult entertainment and adult entertainment merchandise.  
   (3) Increases the performers' chances of contracting a sexually
transmitted disease.  
   (4) Encourages unsafe sex by consumers.  
   (5) Often encourages sexually aggressive behavior towards women.
 
   (6) Increases the medical costs of the participants in the
production of adult entertainment and adult entertainment
merchandise.  
   (c) The Internet provides the children of this state with easy
access to sexual content, which may negatively influence their
developing attitudes toward sexuality and relationships.  
   (d) Adult entertainment venues adversely impact the character of
local neighborhoods by, among other things, reducing local property
values, curtailing development, and engendering many types of
criminal activities.  
   (e) Adult entertainment venues endanger the health, safety, and
welfare of citizens in their vicinity.  
   (f) These findings are consistent with, and supported by, the
findings of numerous municipalities. For example, when the City of
Los Angeles conducted a comprehensive study of adult entertainment
venues, it concluded that such establishments are associated with
higher rates of prostitution, robbery, assault, and theft in
surrounding communities.  
   (g) These negative secondary effects, in turn, drain public
resources dedicated to public social service programs, and place a
significant strain on the courts of this state.  
   (h) The taxes imposed by this measure are not intended as a
prohibition of legally protected forms of expression.  
   (i) The taxes imposed by this measure are intended to represent a
balancing of competing interests. Specifically, these taxes are
designed to balance the need to combat the negative secondary effects
of the adult entertainment industry against the legally protected
rights of adult entertainment producers and consumers.  
   (j) The taxes imposed by this measure are not intended to allow or
license any business, establishment, or activity that would
otherwise be unlawful under the laws of this state or of the United
States.  
   (k) The taxes imposed by this measure are not intended to affect,
or in any way limit, the ability of local governments to address the
negative secondary effects of adult entertainment venues. 
   SECTION 1.   SEC. 2.   Section 6011 of
the Revenue and Taxation Code is amended to read:
   6011.  (a) "Sales price" means the total amount for which tangible
personal property is sold or leased or rented, as the case may be,
valued in money, whether paid in money or otherwise, without any
deduction on account of any of the following:
   (1) The cost of the property sold.
   (2) The cost of materials used, labor or service cost, interest
charged, losses, or any other expenses.
   (3) The cost of transportation of the property, except as excluded
by other provisions of this section.
   (b) The total amount for which the property is sold or leased or
rented includes all of the following:
   (1) Any services that are a part of the sale.
   (2) Any amount for which credit is given to the purchaser by the
seller.
   (3) The amount of any tax imposed by the United States upon
producers and importers of gasoline and the amount of any tax imposed
pursuant to Part 2 (commencing with Section 7301) of this division.
   (c) "Sales price" does not include any of the following:
   (1) Cash discounts allowed and taken on sales.
   (2) The amount charged for property returned by customers when
that entire amount is refunded either in cash or credit, but this
exclusion shall not apply in any instance when the customer, in order
to obtain the refund, is required to purchase other property at a
price greater than the amount charged for the property that is
returned. For the purpose of this section, refund or credit of the
entire amount shall be deemed to be given when the purchase price
less rehandling and restocking costs are refunded or credited to the
customer. The amount withheld for rehandling and restocking costs may
be a percentage of the sales price determined by the average cost of
rehandling and restocking returned merchandise during the previous
accounting cycle.
   (3) The amount charged for labor or services rendered in
installing or applying the property sold.
   (4) (A) The amount of any tax (not including, however, any
manufacturers' or importers' excise tax, except as provided in
subparagraph (B)) imposed by the United States upon or with respect
to retail sales whether imposed upon the retailer or the consumer.
   (B) The amount of manufacturers' or importers' excise tax imposed
pursuant to Section 4081 or 4091 of the Internal Revenue Code for
which the purchaser certifies that he or she is entitled to either a
direct refund or credit against his or her income tax for the federal
excise tax paid or for which the purchaser issues a certificate
pursuant to Section 6245.5.
   (5) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California upon
or with respect to retail sales of tangible personal property,
measured by a stated percentage of sales price or gross receipts,
whether imposed upon the retailer or the consumer.
   (6) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California with
respect to the storage, use or other consumption in that city,
county, city and county, or rapid transit district of tangible
personal property measured by a stated percentage of sales price or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (7) Separately stated charges for transportation from the retailer'
s place of business or other point from which shipment is made
directly to the purchaser, but the exclusion shall not exceed a
reasonable charge for transportation by facilities of the retailer or
the cost to the retailer of transportation by other than facilities
of the retailer. However, if the transportation is by facilities of
the retailer, or the property is sold for a delivered price, this
exclusion shall be applicable solely with respect to transportation
which occurs after the purchase of the property is made.
   (8) Charges for transporting landfill from an excavation site to a
site specified by the purchaser, either if the charge is separately
stated and does not exceed a reasonable charge or if the entire
consideration consists of payment for transportation.
   (9) The amount of any motor vehicle, mobilehome, or commercial
coach fee or tax imposed by and paid the State of California that has
been added to or is measured by a stated percentage of the sales or
purchase price of a motor vehicle, mobilehome, or commercial coach.
   (10) (A) The amount charged for intangible personal property
transferred with tangible personal property in any technology
transfer agreement, if the technology transfer agreement separately
states a reasonable price for the tangible personal property.
   (B) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the price at which the tangible personal
property was sold, leased, or offered to third parties shall be used
to establish the retail fair market value of the tangible personal
property subject to tax. The remaining amount charged under the
technology transfer agreement is for the intangible personal property
transferred.
   (C) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has not been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the retail fair market value shall be
equal to 200 percent of the cost of materials and labor used to
produce the tangible personal property subject to tax. The remaining
amount charged under the technology transfer agreement is for the
intangible personal property transferred.
   (D) For purposes of this paragraph, "technology transfer agreement"
means any agreement under which a person who holds a patent or
copyright interest assigns or licenses to another person the right to
make and sell a product or to use a process that is subject to the
patent or copyright interest.
   (11) The amount of any tax imposed upon diesel fuel pursuant to
Part 31 (commencing with Section 60001).
   (12) (A) The amount of tax imposed by any Indian tribe within the
State of California with respect to a retail sale of tangible
personal property measured by a stated percentage of the sales or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (B) The exclusion authorized by subparagraph (A) shall only apply
to those retailers who are in substantial compliance with this part.
   (13) The amount of any tax imposed pursuant to Part 14.5
(commencing with Section 33001) of this division.
   SEC. 2.   SEC. 3.   Section 6012 of the
Revenue and Taxation Code is amended to read:
   6012.  (a) "Gross receipts" mean the total amount of the sale or
lease or rental price, as the case may be, of the retail sales of
retailers, valued in money, whether received in money or otherwise,
without any deduction on account of any of the following:
   (1) The cost of the property sold. However, in accordance with any
rules and regulations as the board may prescribe, a deduction may be
taken if the retailer has purchased property for some other purpose
than resale, has reimbursed his or her vendor for tax which the
vendor is required to pay to the state or has paid the use tax with
respect to the property, and has resold the property prior to making
any use of the property other than retention, demonstration, or
display while holding it for sale in the regular course of business.
If that deduction is taken by the retailer, no refund or credit will
be allowed to his or her vendor with respect to the sale of the
property.
   (2) The cost of the materials used, labor or service cost,
interest paid, losses, or any other expense.
   (3) The cost of transportation of the property, except as excluded
by other provisions of this section.
   (4) The amount of any tax imposed by the United States upon
producers and importers of gasoline and the amount of any tax imposed
pursuant to Part 2 (commencing with Section 7301) of this division.
   (b) The total amount of the sale or lease or rental price includes
all of the following:
   (1) Any services that are a part of the sale.
   (2) All receipts, cash, credits and property of any kind.
   (3) Any amount for which credit is allowed by the seller to the
purchaser.
   (c) "Gross receipts" do not include any of the following:
   (1) Cash discounts allowed and taken on sales.
   (2) Sale price of property returned by customers when that entire
amount is refunded either in cash or credit, but this exclusion shall
not apply in any instance when the customer, in order to obtain the
refund, is required to purchase other property at a price greater
than the amount charged for the property that is returned. For the
purpose of this section, refund or credit of the entire amount shall
be deemed to be given when the purchase price less rehandling and
restocking costs are refunded or credited to the customer. The amount
withheld for rehandling and restocking costs may be a percentage of
the sales price determined by the average cost of rehandling and
restocking returned merchandise during the previous accounting cycle.

   (3) The price received for labor or services used in installing or
applying the property sold.
   (4) (A) The amount of any tax (not including, however, any
manufacturers' or importers' excise tax, except as provided in
subparagraph (B)) imposed by the United States upon or with respect
to retail sales whether imposed upon the retailer or the consumer.
   (B) The amount of manufacturers' or importers' excise tax imposed
pursuant to Section 4081 or 4091 of the Internal Revenue Code for
which the purchaser certifies that he or she is entitled to either a
direct refund or credit against his or her income tax for the federal
excise tax paid or for which the purchaser issues a certificate
pursuant to Section 6245.5.
   (5) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California upon
or with respect to retail sales of tangible personal property
measured by a stated percentage of sales price or gross receipts
whether imposed upon the retailer or the consumer.
   (6) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California with
respect to the storage, use or other consumption in that city,
county, city and county, or rapid transit district of tangible
personal property measured by a stated percentage of sales price or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (7) Separately stated charges for transportation from the retailer'
s place of business or other point from which shipment is made
directly to the purchaser, but the exclusion shall not exceed a
reasonable charge for transportation by facilities of the retailer or
the cost to the retailer of transportation by other than facilities
of the retailer. However, if the transportation is by facilities of
the retailer, or the property is sold for a delivered price, this
exclusion shall be applicable solely with respect to transportation
which occurs after the sale of the property is made to the purchaser.

   (8) Charges for transporting landfill from an excavation site to a
site specified by the purchaser, either if the charge is separately
stated and does not exceed a reasonable charge or if the entire
consideration consists of payment for transportation.
   (9) The amount of any motor vehicle, mobilehome, or commercial
coach fee or tax imposed by and paid to the State of California that
has been added to or is measured by a stated percentage of the sales
or purchase price of a motor vehicle, mobilehome, or commercial
coach.
   (10) (A) The amount charged for intangible personal property
transferred with tangible personal property in any technology
transfer agreement, if the technology transfer agreement separately
states a reasonable price for the tangible personal property.
   (B) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the price at which the tangible personal
property was sold, leased, or offered to third parties shall be used
to establish the retail fair market value of the tangible personal
property subject to tax. The remaining amount charged under the
technology transfer agreement is for the intangible personal property
transferred.
   (C) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has not been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the retail fair market value shall be
equal to 200 percent of the cost of materials and labor used to
produce the tangible personal property subject to tax. The remaining
amount charged under the technology transfer agreement is for the
intangible personal property transferred.
   (D) For purposes of this paragraph, "technology transfer agreement"
means any agreement under which a person who holds a patent or
copyright interest assigns or licenses to another person the right to
make and sell a product or to use a process that is subject to the
patent or copyright interest.
   (11) The amount of any tax imposed upon diesel fuel pursuant to
Part 31 (commencing with Section 60001).
   (12) (A) The amount of tax imposed by any Indian tribe within the
State of California with respect to a retail sale of tangible
personal property measured by a stated percentage of the sales or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (B) The exclusion authorized by subparagraph (A) shall only apply
to those retailers who are in substantial compliance with this part.
   For purposes of the sales tax, if the retailers establish to the
satisfaction of the board that the sales tax has been added to the
total amount of the sale price and has not been absorbed by them, the
total amount of the sale price shall be deemed to be the amount
received exclusive of the tax imposed. Section 1656.1 of the Civil
Code shall apply in determining whether or not the retailers have
absorbed the sales tax.
   (13) The amount of any tax imposed pursuant to Part 14.5
(commencing with Section 33001) of this division.
   SEC. 4.    Section 6051.9 is added to the  
Revenue and Taxation Code   , to read:  
   6051.9.  (a) (1) In addition to any other taxes imposed by this
part for the privilege of selling tangible personal property at
retail, to the extent permitted by state or federal law, a tax is
hereby imposed upon all retailers at the rate of 25 percent of the
gross receipts from the sale of qualified tangible personal property
sold at retail through the Internet, or similar electronic means, in
the state.
   (2) For purposes of this section, "qualified tangible personal
property" means any item, including, but not limited to, a book,
magazine, periodical, film, videotape, digital image, or digitally or
computer-manipulated image, that falls within the recordkeeping
requirements of Section 2257 of Title 18 of the United States Code.
   (b) Notwithstanding any other provision of this part, it is the
intent of the Legislature that all revenues, less refunds and the
board's costs of administration, derived from the 25 percent tax
imposed pursuant to this section be transferred to the Treasurer to
be deposited in the State Treasury to the credit of the Adult
Entertainment Venue Impact Fund. 
   SEC. 5.    Section 6201.9 is added to the  
Revenue and Taxation Code   , to read:  
   6201.9.  (a) (1) In addition to the taxes imposed by any other
provision of this part, to the extent permitted by state or federal
law, an excise tax is hereby imposed on the storage, use, or other
consumption in this state of qualified tangible personal property
purchased from any retailer for storage, use, or other consumption in
this state at the rate of 25 percent of the sales price of the
property.
   (2) For purposes of this section, "qualified tangible personal
property" means any item, including, but not limited to, a book,
magazine, periodical, film, videotape, digital image, or digitally or
computer-manipulated image, that falls within the recordkeeping
requirements of Section 2257 of Title 18 of the United States Code.
   (b) Notwithstanding any other provision of this part, it is the
intent of the Legislature that all revenues, less refunds and the
board's costs of administration, derived from the 25 percent tax
imposed pursuant to this section be transferred to the Treasurer to
be deposited in the State Treasury to the credit of the Adult
Entertainment Venue Impact Fund. 
   SEC. 3.   SEC. 6.   Part 14.5
(commencing with Section 33001) is added to Division 2 of the Revenue
and Taxation Code, to read:

      PART 14.5.  Adult Entertainment Venue Tax


   33001.  The Legislature finds and declares all of the following:
   (a) Adult entertainment venues engender many types of criminal
activities.
   (b) Adult entertainment venues frequently cause adverse effects on
local property values and on the public health, safety, and welfare
of citizens in their vicinity, and on the character of local
neighborhoods.
   (c) The presence of adult entertainment venues often impacts the
character of neighborhoods, or curtails and prevents development of
properties in their general vicinity, or both.
   (d) This part is not intended as a de facto prohibition of legally
protected forms of expression.
   (e) This part is intended to represent a balancing of competing
interests: the need to address criminal activity, protect and develop
neighborhoods, or both, through the taxation of adult entertainment
venues balanced against the legally protected rights of adult
entertainment establishments and their patrons.
   (f) This article is not intended to allow or license any business,
establishment, or activity that would otherwise be unlawful under
the laws of this state or of the United States.
   (g) This article is not intended to affect, or in any way limit,
the ability of local governments to address the negative secondary
effects of adult entertainment venues. 
    33002.   33001.   Except where the
context otherwise requires, the definitions set forth in Part 1
(commencing with Section 6001) govern the construction of this part.
   33003.  For purposes of this part, the following definitions
apply: 
   (a) (1) "Adult entertainment venue" means a retail establishment
located in California with a substantial purpose that is the sale or
rental of adult material, the premises of any facility located in
California that provides a public or private viewing of adult
material, or the public premises of any facility located in
California that offers live sexually explicit conduct that is
prohibited to audiences under 18 years of age or 21 years of age,
depending on the sale of alcoholic beverages on the premises.
 
   (a) (1) "Adult entertainment venue" means any of the following:
 
   (A) A retail establishment whose gross receipts from the sale or
rental of adult material exceed 50 percent of all gross receipts of
the retail establishment.  
   (B) The premises of any facility located in California that
provides a public or private viewing of adult material.  
   (C) The public premises of any facility located in California that
offers live sexually explicit conduct that is prohibited to
audiences under 18 years of age or 21 years of age, depending on the
sale of alcoholic beverages on the premises. 
   (2) "Adult entertainment venue" shall not mean:
   (A) A retail establishment that is open to the general public and
that segregates adult material by restricted access to persons 18
years of age or older, so long as the gross receipts from
transactions involving adult material do not exceed 5 percent of all
gross receipts of the retail establishment.
   (B) A business whose primary purpose is the provision of live
performances that may include the display of complete nudity, so long
as the live performance is a legitimate play, opera, ballet, or
concert at a concert house, playhouse or theater, museum, or
educational institution or facility on whose premises alcoholic
beverages may be sold but which derives less than 20 percent of its
gross receipts from the sale of alcoholic beverages.
   (b) "Adult material" includes , but is not limited t 
 o,  all of the following:
   (1) Harmful matter, as defined in Section 313 of the Penal Code.
   (2) Live sexually explicit conduct provided at a business
establishment.
   (3) Any item that includes sexually explicit conduct or is subject
to the requirements of Section 2257 of Title 18 of the United States
Code.
   (c) "Gross receipts" includes receipts, from whatever source,
received by the adult entertainment venue, excepting any sales taxes
imposed on the transaction.
   (d) "Sexually explicit conduct" means any of the following actual,
but not simulated, conduct:
   (1) Sexual intercourse, including genital-genital, oral-genital,
anal-genital, or oral-anal, whether between persons of the same or
opposite sex.
   (2) Masturbation.
   (3) Sadistic or masochistic abuse.
   (4) Lascivious exhibition of the genitals or pubic area of any
person.
   33004.  In addition to any tax imposed under Chapter 2 (commencing
with Section 6051) of Part 1, for the privilege of selling tangible
personal property at retail, a tax is hereby imposed upon all adult
entertainment venues at the rate of  8   25
 percent of the gross receipts received in this state on or
after May 1, 2008.
   33005.  To the extent feasible or practicable, Section 
1556.1   1656.1  of the Civil Code,  and 
the provisions of  Chapter 5 (commencing with Section 6451),
Chapter 6 (commencing with Section 6701), Chapter 7 (commencing with
Section 6901), and Chapter 8 (commencing with Section 7051) of Part
1,   Part 30 (commencing with Section 55001)  shall
govern determinations, collections of tax, overpayments and refunds,
and administration under this part.
   33006.  The board shall enforce the provisions of this part and
may prescribe, adopt, and enforce rules and regulations relating to
the administration                                            and
enforcement of this part. The board may prescribe the extent to which
any ruling or regulation shall be applied without retroactive
effect.
   33007.  (a) All amounts required to be paid to the state under
this part shall be paid to the board in the form of remittances
payable to the State Board of Equalization. It is the intent of the
Legislature that the board shall transmit the payments, less refunds
and the board's costs of administration, to the Treasurer to be
deposited in the State Treasury to the credit of the Adult
Entertainment  Venue  Impact Fund, which is hereby created.
   (b) Moneys in the Adult Entertainment  Venue  Impact Fund
shall, upon appropriation by the Legislature, be used to ameliorate
the secondary effects of  adult entertainment and  adult
entertainment venues. Amelioration of secondary effects includes, but
is not limited to:
   (1) Increased funding to state and local law enforcement to combat
any increased criminal activity in the vicinity of adult
entertainment venues including, but not limited to, criminal activity
like the illegal sale of controlled substances, prostitution, and
crimes against women.
   (2) Programs to address the negative secondary effects of adult
entertainment venues on property values.
   (3) Provision of funding to address related health issues,
including the  transmission of   testing and
treatment of sexually transmitted  diseases and mental health
treatment. 
   (4) Supplemental funding for existing state and local substance
abuse treatment programs.  
   (5) Supplemental funding for Child Protective Services.  

   (6) Supplemental funding to the courts to aid the effective
administration of justice within the state.  
   (7) Supplemental funding for state and local administration of
elementary and secondary education.  
   (8) Supplemental funding for state and local administration of
public assistance and public social service programs.  
   (9) Supplemental funding for state and local law enforcement to
aid in the effort to combat sexual predators. 
   SEC. 7.    Part 14.7 (commencing with Section 33100)
is added to Division 2 of the   Revenue and Taxation Code
  , to read:  

      PART 14.7.  Adult Entertainment Tax


   33100.  Except where the context otherwise requires, the
definitions set forth in Part 1 (commencing with Section 6001) govern
the construction of this part.
   33101.  For purposes of this part, the following definitions
apply:
   (a) "Adult entertainment movie" means any motion picture that is
subject to the requirements of Section 2257 of Title 18 of the United
States Code.
   (b) "Cable provider" means the person or entity providing cable
television services through the cable television system.
   (c) "Hotel owner or operator" means the person or entity that owns
and operates any hotel, motel, bed and breakfast inn, or other
similar transient lodging establishment.
   (d) "Pay-per-view" means a delivery by a hotel owner or operator,
cable provider, or satellite television provider of a single program
or a specified group of programs, as to which each such single
program is generally uninterrupted by commercial advertising messages
and for which recipients are charged a separate fee for each program
or specified group of programs. "Pay-per-view" shall also include
delivery of a single program for which multiple start times are made
available at time intervals which are less than the running time of
such program as a whole.
   (e) "Satellite television provider" means the person or entity
providing satellite television services through a satellite
broadcasting system.
   (f) "Total gross charges" means any and all charges imposed on the
purchaser related to the transmission of a pay-per-view adult
entertainment movie.
   33102.  On and after May 1, 2008, in addition to any other tax
imposed by this division, for the privilege of purchasing cable
television or satellite television services, a tax is hereby imposed
on each purchaser of a pay-per-view adult entertainment movie in this
state at the rate of 25 percent of the total gross charges incurred
by a purchaser for the pay-per-view adult entertainment movie.
   33103.  The tax imposed by this part shall be collected from a
purchaser by a hotel owner or operator, the cable provider, or
satellite television provider to the extent permitted by state or
federal law. If the tax is not collected by the hotel owner or
operator, the cable provider, or the satellite television provider,
the purchaser shall pay the tax directly to the board.
   33104.  To the extent feasible or practicable, Section 1656.1 of
the Civil Code, and the provisions of Part 30 (commencing with
Section 55001), shall govern determinations, collections of tax,
overpayments and refunds, and administration under this part.
   33105.  The board shall enforce the provisions of this part and
may prescribe, adopt, and enforce rules and regulations relating to
the administration and enforcement of this part, including
regulations regarding claims for refunds for taxes paid or incurred
pursuant to this part. The board may prescribe the extent to which
any ruling or regulation shall be applied without retroactive effect.

   33106.  All amounts required to be paid to the state under this
part shall be paid to the board in the form of remittances payable to
the State Board of Equalization. It is the intent of the Legislature
that the board shall transmit the payments, less refunds and the
board's costs of administration, to the Treasurer to be deposited in
the State Treasury to the credit of the Adult Entertainment Venue
Impact Fund. 
   SEC. 8.    Part 32 (commencing with Section 60131) is
added to Division 2 of the   Revenue and Taxation Code
  , to read:  

      PART 32.  ADULT ENTERTAINMENT EXCISE TAX


   60131.  In addition to any taxes imposed by this division, to the
extent permitted by state or federal law, there is hereby imposed a
tax on each qualified business at the rate of 25 percent of the
qualified gross receipts of the qualified business.
   60132.  For purposes of this part, the following apply:
   (a) "Qualified business" means a business engaged in those lines
of business described in Codes 334612, 512110, 512120, 512191, and
512199 of the North American Industry Classification System, 2007
edition, and that has more than 50 percent of its gross receipts
derived from the production, distribution, or sales of movies or
videos that are subject to the recordkeeping requirements of Section
2257 of Title 18 of the United States Code.
   (b) "Qualified gross receipts" means gross receipts received in
this state that are derived from the production, distribution, or
sales of movies or videos that are subject to the recordkeeping
requirements of Section 2257 of Title 18 of the United States Code.
   60133.  Every qualified business required to pay the tax imposed
under Section 60131 shall register with the board and give the
location of all production, distribution, or sales houses or offices
or other places of business in this state, and any other information
the board may require.
   60134.  The tax imposed and required to be paid under this part
shall be made by remittance to the State Board of Equalization. It is
the intent of the Legislature that the board shall transmit the
payments, less the board's costs of administration, to the Treasurer
to be deposited in the State Treasury to the credit of the Adult
Entertainment Venue Impact Fund.
   60135.  The State Board of Equalization may prescribe appropriate
rules and regulations to implement this part.
   60136.  This part shall become operative on the first day of the
sixth month following the effective date of this measure. 
   SEC. 4.   SEC. 9.   The provisions of
this act are severable. If any provision of this act or its
application is held invalid, that invalidity shall not affect other
provisions or applications that can be given effect without the
invalid provision or application.
   SEC. 5.   SEC. 10.   This act provides
for a tax levy within the meaning of Article IV of the Constitution
and shall go into immediate effect.