BILL NUMBER: AB 1422 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 24, 2009
AMENDED IN ASSEMBLY MAY 21, 2009
INTRODUCED BY Assembly Member Bass
( Principal coauthor: Senator
Steinberg )
( Coauthors: Assembly Members
Adams and
Torres Coauthor: Assembly Member
Jones )
( Coauthor: Senator Alquist
)
FEBRUARY 27, 2009
An act to add and repeal Chapter 7 (commencing with
Section 33700) to Part 1 of Division 24 of the Health and Safety
Code, relating to redevelopment. An act to amend
Section 130105 of the Health and Safety Code, to amend Section
12693.43 of, and to add Section 12693.22 to, the Insurance Code, to
amend, repeal, and add Sections 12201, 12204, 12251, 12253, 12254,
12257, 12258, 12260, 12301, 12302, 12303, 12304, 12305, 12307, 12412,
12413, 12421, 12422, 12423, 12427, 12428, 12429, 12431, 12433,
12434, 12491, 12493, 12494, 12601, 12602, 12631, 12632, 12636,
12636.5, 12679, 12681, 12801, 12951, 12977, 12983, 12984, and 13108
of, to add and repeal Sections 12009 and 12207 of, and to add and
repeal Article 4 (commencing with Section 12240) of Chapter 3 of Part
7 of Division 2 of, the Revenue and Taxation Code, and to
add and re peal Section 14301.11 of the Welfare and
Institutions Code, relating to health, making an appropriation
therefor, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1422, as amended, Bass. Redevelopment: affordable
housing. Health Care Programs: California Children and
Families Act of 1998.
Existing law imposes various taxes, including a tax at a specified
rate on the gross premiums of an insurer, as defined.
Existing law provides for the Medi-Cal program, administered by
the State Department of Health Care Services, under which health care
services are provided to qualified low-income recipients. One of the
methods by which these services are provided is pursuant to
contracts with various types of managed care plans.
This bill would, until January 1, 2011, impose that tax on the
total operating revenue, as specified, of a Medi-Cal managed care
plan, as defined. The proceeds from the tax would be continuously
appropriated (1) an amount to the department necessary to ensure that
these plans receive rates contracted for under the Medi-Cal Program,
and (2) any additional revenues to the Managed Risk Medical
Insurance Board for purposes of the Healthy Families Program.
The bill would provide that the tax would have no force or effect
if any of specified conditions apply.
Existing law requires every return required to be filed with the
State Insurance Commissioner pursuant to provisions governing taxes
on the gross premiums of insurers to be signed by the insurer or an
executive officer of the insurer and to be made under oath or contain
a written declaration that it is made under penalty of perjury.
This bill would also require Medi-Cal managed care plans to file
returns with the commissioner under oath or with a written
declaration that is made under penalty of perjury. By expanding the
crime of perjury, this bill would impose a state-mandated local
program.
Existing law creates the Healthy Families Program, administered by
the Managed Risk Medical Insurance Board, to arrange for the
provision of health care services to children less than 19 years of
age who meet certain criteria, including having a limited gross
household income. Existing law requires families with children
participating in the program to pay specified family contribution
amounts.
This bill would, commencing November 1, 2009, increase the amounts
to be paid for the family contributions. This bill would require the
Healthy Families Program to provide prior notice to any applicant
for a subscriber whose premium will increase as a result of the
increases in the family contribution amounts and would require the
program to provide the applicant with an opportunity to demonstrate
that, based on reduced family income, the subscriber is subject to a
lower premium pursuant to the above-described provisions.
The California Children and Families Act of 1998, an initiative
measure approved by the voters as Proposition 10 at the November 3,
1998, statewide general election, requires that the California
Children and Families Program, established by the act, be funded by
certain taxes imposed on the sale and distribution of cigarettes and
tobacco products, that revenues be deposited into the California
Children and Families Trust Fund, and that the fund be used for the
implementation of comprehensive early childhood development and
smoking prevention programs. Existing law provides that 20% of moneys
allocated and appropriated from the trust fund shall be deposited,
in accordance with a prescribed formula, in specified accounts,
including the Unallocated Account, for expenditure by the California
Children and Families Commission, also known as First 5 California,
for various subjects relating to, and furthering the goals and
purposes of, the act. Existing law prohibits amendment of this
initiative measure by the Legislature unless the amendment is
approved by the voters, or the amendment is accomplished by a vote of
2/3 of the membership of both houses of the Legislature and the
amendment furthers the act and is consistent with its purposes.
This bill would provide that any funds not needed in specified
accounts may be transferred to the Unallocated Account upon approval
of the commission. The bill would make a legislative finding and
declaration that these changes further the goals and purposes of that
act.
This bill would require the Director of Finance to make the
necessary budgetary adjustments to allow the expenditure of funds
allocated by the commission pursuant to the above provisions.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would declare that it is to take effect immediately as
an urgency statute.
The Community Redevelopment Law requires a redevelopment agency to
deposit not less than 20% of all taxes the agency receives in a Low
and Moderate Income Housing Fund and allocate those funds for the
purposes of increasing, improving, and preserving the community's
supply of low- and moderate-income housing available at affordable
housing cost, as defined, to persons and families of low or moderate
income, lower income households, very low income households, and
extremely low income households, unless the agency makes specified
findings.
This bill would authorize a redevelopment agency, until January 1,
2013, to expend any money that is not held in the fund to (1)
purchase, assume, or refinance, or assist lenders or nonprofit or
for-profit developers in purchasing, assuming, or refinancing,
subprime or nontraditional mortgages on homes owned by persons
meeting a specified income level within its jurisdiction, or make
loans to those homeowners and (2) purchase, or assist lenders or
nonprofit or for-profit developers in purchasing, homes within its
jurisdiction that have been foreclosed and are vacant and sell those
homes, without regard to income.
The bill would require that funds be expended pursuant to these
provisions in a manner that preserves the exemption from federal and
state income taxes of interest on the bonds or notes issued by the
agency under the Community Redevelopment Law.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 130105 of the Health
and Safety Code is amended to read:
130105. The California Children and Families Trust Fund is hereby
created in the State Treasury.
(a) The California Children and Families Trust Fund shall consist
of moneys collected pursuant to the taxes imposed by Section 30131.2
of the Revenue and Taxation Code.
(b) All costs to implement this act shall be paid from moneys
deposited in the California Children and Families Trust Fund.
(c) The State Board of Equalization shall determine within one
year of the passage of this act the effect that additional taxes
imposed on cigarettes and tobacco products by this act has on the
consumption of cigarettes and tobacco products in this state. To the
extent that a decrease in consumption is determined by the State
Board of Equalization to be the direct result of additional taxes
imposed by this act, the State Board of Equalization shall determine
the fiscal effect the decrease in consumption has on the funding of
any Proposition 99 (the Tobacco Tax and Health Protection Act of
1988) state health-related education or research programs in effect
as of November 1, 1998, and the Breast Cancer Fund programs that are
funded by excise taxes on cigarettes and tobacco products. Funds
shall be transferred from the California Children and Families Trust
Fund to those affected programs as necessary to offset the revenue
decrease directly resulting from the imposition of additional taxes
by this act. These reimbursements shall occur, and at any times, as
determined necessary to further the intent of this subdivision.
(d) Moneys shall be allocated and appropriated from the California
Children and Families Trust Fund as follows:
(1) Twenty percent shall be allocated and appropriated to separate
accounts of the state commission for expenditure according to the
following formula:
(A) Six percent shall be deposited in a Mass Media Communications
Account for expenditures for communications to the general public
utilizing television, radio, newspapers, and other mass media on
subjects relating to and furthering the goals and purposes of this
act, including, but not limited to, methods of nurturing and
parenting that encourage proper childhood development, the informed
selection of child care, information regarding health and social
services, the prevention and cessation of tobacco, alcohol, and drug
use by pregnant women, the detrimental effects of secondhand smoke on
early childhood development, and to ensure that children are ready
to enter school. Any funds not needed in this account may be
transferred to the Unallocated Account described in subparagraph (F),
upon approval by the state commission.
(B) Five percent shall be deposited in an Education Account for
expenditures to ensure that children are ready to enter school and
for programs relating to education, including, but not limited to,
the development of educational materials, professional and parental
education and training, and technical support for county commissions
in the areas described in subparagraph (A) of paragraph (1) of
subdivision (b) of Section 130125. Any funds not needed in this
account may be transferred to the Unallocated Account described in
subparagraph (F), upon approval by the state commission.
(C) Three percent shall be deposited in a Child Care Account for
expenditures to ensure that children are ready to enter school and
for programs relating to child care, including, but not limited to,
the education and training of child care providers, the development
of educational materials and guidelines for child care workers, and
other areas described in subparagraph (B) of paragraph (1) of
subdivision (b) of Section 130125. Any funds not needed in this
account may be transferred to the Unallocated Account described in
subparagraph (F), upon approval by the state commission.
(D) Three percent shall be deposited in a Research and Development
Account for expenditures to ensure that children are ready to enter
school and for the research and development of best practices and
standards for all programs and services relating to early childhood
development established pursuant to this act, and for the assessment
and quality evaluation of those programs and services. Any funds
not needed in this account may be transferred to the Unallocated
Account described in subparagraph (F), upon approval by the state
commission.
(E) One percent shall be deposited in an Administration Account
for expenditures for the administrative functions of the state
commission. Any funds not needed for the administrative functions of
the state commission may be transferred to the Unallocated Account
described in subparagraph (F), upon approval by the state commission.
(F) Two percent shall be deposited in an Unallocated Account for
expenditure by the state commission for any of the purposes of this
act described in Section 130100 provided that none of these moneys
shall be expended for the administrative functions of the state
commission.
(G) In the event that, for whatever reason, the expenditure of any
moneys allocated and appropriated for the purposes specified in
subparagraphs (A) to (F), inclusive, is enjoined by a final judgment
of a court of competent jurisdiction, then those moneys shall be
available for expenditure by the state commission for mass media
communication emphasizing the need to eliminate smoking and other
tobacco use by pregnant women, the need to eliminate smoking and
other tobacco use by persons under 18 years of age, and the need to
eliminate exposure to secondhand smoke.
(H) Any moneys allocated and appropriated to any of the accounts
described in subparagraphs (A) to (F), inclusive, that are not
encumbered or expended within any applicable period prescribed by law
shall (together with the accrued interest on the amount) revert to
and remain in the same account for the next fiscal period.
(2) Eighty percent shall be allocated and appropriated to county
commissions in accordance with Section 130140.
(A) The moneys allocated and appropriated to county commissions
shall be deposited in each local Children and Families Trust Fund
administered by each county commission, and shall be expended only
for the purposes authorized by this act and in accordance with the
county strategic plan approved by each county commission.
(B) Any moneys allocated and appropriated to any of the county
commissions that are not encumbered or expended within any applicable
period prescribed by law shall (together with the accrued interest
on the amount) revert to and remain in the same local Children and
Families Trust Fund for the next fiscal period under the same
conditions as set forth in subparagraph (A).
(e) All grants, gifts, or bequests of money made to or for the
benefit of the state commission from public or private sources to be
used for early childhood development programs shall be deposited in
the California Children and Families Trust Fund and expended for the
specific purpose for which the grant, gift, or bequest was made. The
amount of any such grant, gift, or bequest shall not be considered in
computing the amount allocated and appropriated to the state
commission pursuant to paragraph (1) of subdivision (d).
(f) All grants, gifts, or bequests of money made to or for the
benefit of any county commission from public or private sources to be
used for early childhood development programs shall be deposited in
the local Children and Families Trust Fund and expended for the
specific purpose for which the grant, gift, or bequest was made. The
amount of any such grant, gift, or bequest shall not be considered in
computing the amount allocated and appropriated to the county
commissions pursuant to paragraph (2) of subdivision (d).
SEC. 2. Section 12693.22 is added to the
Insurance Code , to read:
12693.22. During the 2009-10 and 2010-11 fiscal years, the
adoption and readoption of regulations to modify health, dental, and
vision benefits or otherwise modify program requirements and
operations consistent with the provisions of this part shall be
deemed to be an emergency and necessary for the immediate
preservation of public peace, health and safety, or general welfare
for purposes of Sections 11346.1 and 11349.6 of the Government Code,
and the board is hereby exempted from the requirement that it
describe facts showing the need for immediate action and from review
by the Office of Administrative Law.
SEC. 3. Section 12693.43 of the
Insurance Code is amended to read:
12693.43. (a) Applicants applying to the purchasing pool shall
agree to pay family contributions, unless the applicant has a family
contribution sponsor. Family contribution amounts consist of the
following two components:
(1) The flat fees described in subdivision (b) or (d).
(2) Any amounts that are charged to the program by participating
health, dental, and vision plans selected by the applicant that
exceed the cost to the program of the highest cost Family Value
Package in a given geographic area.
(b) In each geographic area, the board shall designate one or more
Family Value Packages for which the required total family
contribution is:
(1) Seven dollars ($7) per child with a maximum required
contribution of fourteen dollars ($14) per month per family for
applicants with annual household incomes up to and including 150
percent of the federal poverty level.
(2) (A) Nine dollars ($9) per child with a
maximum required contribution of twenty-seven dollars ($27) per month
per family for applicants with annual household incomes greater than
150 percent and up to and including 200 percent of the federal
poverty level and for applicants on behalf of children described in
clause (ii) of subparagraph (A) of paragraph (6) of subdivision (a)
of Section 12693.70. Commencing
(B) Commencing the first day of
the fifth month following the enactment of the 2008-09 Budget Act,
the family contribution pursuant to this paragraph shall be twelve
dollars ($12) per child with a maximum required contribution of
thirty-six dollars ($36) per month per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be sixteen dollars ($16) per child with a
maximum required contribution of forty-eight dollars ($48) per month
per family.
(3) (A) On and after July 1, 2005, fifteen dollars ($15) per child
with a maximum required contribution of forty-five dollars ($45) per
month per family for applicants with annual household income to
which subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this subparagraph shall be applicable to the applicant on July
1, 2005, unless subparagraph (B) of paragraph (6) of subdivision (a)
of Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this subparagraph and, prior to the date the
premium increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income.
(B) Commencing the first day of the fifth month following the
enactment of the 2008-09 Budget Act, the family contribution pursuant
to this paragraph shall be seventeen dollars ($17) per child with a
maximum required contribution of fifty-one dollars ($51) per month
per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be twenty-four dollars ($24) per child with a
maximum required contribution of seventy-two dollars ($72) per month
per family.
(c) Combinations of health, dental, and vision plans that are more
expensive to the program than the highest cost Family Value Package
may be offered to and selected by applicants. However, the cost to
the program of those combinations that exceeds the price to the
program of the highest cost Family Value Package shall be paid by the
applicant as part of the family contribution.
(d) The board shall provide a family contribution discount to
those applicants who select the health plan in a geographic area that
has been designated as the Community Provider Plan. The discount
shall reduce the portion of the family contribution described in
subdivision (b) to the following:
(1) A family contribution of four dollars ($4) per child with a
maximum required contribution of eight dollars ($8) per month per
family for applicants with annual household incomes up to and
including 150 percent of the federal poverty level.
(2) (A) Six dollars ($6) per child with a
maximum required contribution of eighteen dollars ($18) per month per
family for applicants with annual household incomes greater than 150
percent and up to and including 200 percent of the federal poverty
level and for applicants on behalf of children described in clause
(ii) of subparagraph (A) of paragraph (6) of subdivision (a) of
Section 12693.70. Commencing
(B) Commencing the first day of
the fifth month following the enactment of the 2008-09 Budget Act,
the family contribution pursuant to this paragraph shall be nine
dollars ($9) per child with a maximum required contribution of
twenty-seven dollars ($27) per month per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be thirteen dollars ($13) per child with a
maximum required contribution of thirty-nine dollars ($39) per month
per family.
(3) (A) On and after July 1, 2005, twelve dollars ($12) per child
with a maximum required contribution of thirty-six dollars ($36) per
month per family for applicants with annual household income to which
subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this subparagraph shall be applicable to the applicant on July
1, 2005, unless subparagraph (B) of paragraph (6) of subdivision (a)
of Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this subparagraph and, prior to the date the
premium increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income.
(B) Commencing the first day of the fifth month following the
enactment of the 2008-09 Budget Act, the family contribution pursuant
to this paragraph shall be fourteen dollars ($14) per child with a
maximum required contribution of forty-two dollars ($42) per month
per family.
(C) Commencing November 1, 2009, the family contribution pursuant
to this paragraph shall be twenty-one dollars ($21) per child with a
maximum required contribution of sixty-three dollars ($63) per month
per family.
(e) Applicants, but not family contribution sponsors, who pay
three months of required family contributions in advance shall
receive the fourth consecutive month of coverage with no family
contribution required.
(f) Applicants, but not family contribution sponsors, who pay the
required family contributions by an approved means of electronic fund
transfer shall receive a 25-percent discount from the required
family contributions.
(g) It is the intent of the Legislature that the family
contribution amounts described in this section comply with the
premium cost sharing limits contained in Section 2103 of Title XXI of
the Social Security Act. If the amounts described in subdivision (a)
are not approved by the federal government, the board may adjust
these amounts to the extent required to achieve approval of the state
plan.
(h) The adoption and one readoption of regulations to implement
paragraph (3) of subdivision (b) and paragraph (3) of subdivision (d)
shall be deemed to be an emergency and necessary for the immediate
preservation of public peace, health, and safety, or general welfare
for purposes of Sections 11346.1 and 11349.6 of the Government Code,
and the board is hereby exempted from the requirement that it
describe specific facts showing the need for immediate action and
from review by the Office of Administrative Law. For purpose of
subdivision (e) of Section 11346.1 of the Government code, the
120-day period, as applicable to the effective period of an emergency
regulatory action and submission of specified materials to the
Office of Administrative law, is hereby extended to 180 days.
(i) The board may adopt, and may only one-time readopt,
regulations to implement the changes to this section that are
effective the first day of the fifth month following the enactment of
the 2008-09 Budget Act. The adoption and one-time readoption of a
regulation authorized by this section is deemed to address an
emergency, for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the board is hereby exempted for this purpose
from the requirements of subdivision (b) of Section 11346.1 of the
Government Code.
(j) The program shall provide prior notice to any applicant for a
subscriber whose premium will increase as a result of amendments made
to this section by the act that added this subdivision and shall
provide the applicant with an opportunity to demonstrate that, based
on reduced family income, the subscriber is subject to a lower
premium pursuant to this section.
SEC. 4. Section 12009 is added to the
Revenue and Taxation Code , to read:
12009. (a) "Medi-Cal managed care plan" or "plan" means any
individual, organization, or entity, other than an insurer as
described in Section 12003, that enters into a contract with the
State Department of Health Care Services pursuant to Article 2.7
(commencing with Section 14087.3), Article 2.8 (commencing with
Section 14087.5), Article 2.81 (commencing with Section 14087.96),
Article 2.9 (commencing with Section 14088), or Article 2.91
(commencing with Section 14089) of Chapter 7 of, or pursuant to
Article 1 (commencing with Section 14200) or Article 7 (commencing
with Section 14490) of Chapter 8 of, Part 3 of Division 9 of the
Welfare and Institutions Code.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 5. Section 12201 of the Revenue and
Taxation Code is amended to read:
12201. (a) Every insurer and Medi-Cal
managed care plan doing business in this State
state shall annually pay to the State
state a tax on the bases, at the rates, and
subject to the deductions from the tax hereinafter specified. For
purposes of the tax imposed by this chapter, "insurer" shall be
deemed to include a home protection company as defined in Section
12740 of the Insurance Code.
(b) Notwithstanding Section 13340 of the Government Code, the
revenues derived from the imposition of the tax by this chapter on
Medi-Cal managed care plans are hereby continuously appropriated as
follows:
(1) To the State Department of Health Care Services in an amount
necessary to ensure that the Medi-Cal managed care plans receive
contracted rates of payment for services provided to Medi-Cal
enrollees that are actuarially sound, as required by federal law and
Section 14301.1 of the Welfare and Institutions Code.
(2) Any additional revenues to the Managed Risk Medical Insurance
Board for purposes of the Healthy Families Program.
(c) For purposes of imposing the tax on Medi-Cal managed care
plans during the 2009 calendar year, the tax shall be based on total
revenue for the period of January 1, 2009, to December 31, 2009,
inclusive.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 6. Section 12201 is added to the
Revenue and Taxation Code , to read:
12201. (a) Every insurer doing business in this state shall
annually pay to the state a tax on the bases, at the rates, and
subject to the deductions from the tax hereinafter specified. For
purposes of the tax imposed by this chapter, "insurer" shall be
deemed to include a home protection company as defined in Section
12740 of the Insurance Code.
(b) This section shall become operative on January 1, 2011.
SEC. 7. Section 12204 of the Revenue and
Taxation Code is amended to read:
12204. (a) The tax imposed on insurers by
this chapter is in lieu of all other taxes and licenses, state,
county, and municipal, upon such th
ose insurers and their property, except:
(a)
(1) Taxes upon their real estate.
(b)
(2) Any retaliatory exactions imposed by paragraph (3)
of subdivision (f) of Section 28 of Article XIII of the Constitution.
(c)
(3) The tax on ocean marine insurance.
(d)
(4) Motor vehicle and other vehicle registration
license fees and any other tax or license fee imposed by the state
upon vehicles, motor vehicles or the operation thereof.
(e)
(5) That each corporate or other attorney in fact of a
reciprocal or interinsurance exchange shall be subject to all taxes
imposed upon corporations or others doing business in the state,
other than taxes on income derived from its principal business as
attorney in fact.
(b) This section shall not apply to any Medi-Cal managed care plan
and to any tax imposed on that plan by this chapter.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 8. Section 12204 is added to the
Revenue and Taxation Code , to read:
12204. (a) The tax imposed on insurers by this chapter is in lieu
of all other taxes and licenses, state, county, and municipal, upon
those insurers and their property, except:
(1) Taxes upon their real estate.
(2) Any retaliatory exactions imposed by paragraph (3) of
subdivision (f) of Section 28 of Article XIII of the California
Constitution.
(3) The tax on ocean marine insurance.
(4) Motor vehicle and other vehicle registration license fees and
any other tax or license fee imposed by the state upon vehicles,
motor vehicles or the operation thereof.
(5) That each corporate or other attorney in fact of a reciprocal
or interinsurance exchange shall be subject to all taxes imposed upon
corporations or others doing business in the state, other than taxes
on income derived from its principal business as attorney in fact.
(b) This section shall become operative on January 1, 2011.
SEC. 9. Section 12207 is added to the
Revenue and Taxation Code , to read:
12207. (a) Notwithstanding any other provision of this part, no
credit shall be allowed under Section 12206, 12208, or 12209 against
the tax imposed on Medi-Cal managed care plans pursuant to Section
12201.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 10. Article 4 (commencing with Section 12240)
is added to Chapter 3 of Part 7 of Division 2 of the
Revenue and Taxation Code , to read:
Article 4. Basis of Tax for Medi-Cal Managed Care Plans
12240. In the case of a Medi-Cal managed care plan, the basis of
the tax is, in respect to each year, total operating revenue.
12241. For purposes of this article, "total operating revenue"
means all amounts received by a Medi-Cal managed care plan in premium
or capitation payments for the coverage or provision of all health
care services, including, but not limited to, Medi-Cal services.
Total operating revenue shall not include amounts received by a
Medi-Cal managed care plan pursuant to a subcontract with a Medi-Cal
managed care plan to provide health care services to Medi-Cal
beneficiaries.
12242. This article shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 11. Section 12251 of the Revenue
and Taxation Code is amended to read:
12251. (a) For the calendar year 1970, and
each calendar year thereafter, insurers transacting insurance in this
state and whose annual tax for the preceding calendar year was five
thousand dollars ($5,000) or more shall make prepayments of the
annual tax for the current calendar year imposed by Section 28 of
Article XIII of the California Constitution and this part, provided
that no prepayments shall be made with respect to the tax on ocean
marine insurance underwriting profit or any retaliatory tax.
(b) Medi-Cal managed care plans shall make prepayments of the tax
imposed by Section 12201 for the current calendar year.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 12. Section 12251 is added to the
Revenue and Taxation Code , to read:
12251. (a) For the calendar
year 1970, and each calendar year thereafter, insurers transacting
insurance in this state and whose annual tax for the preceding
calendar year was five thousand dollars ($5,000) or more shall make
prepayments of the annual tax for the current calendar year imposed
by Section 28 of Article XIII of the California Constitution and this
part, provided that no prepayments shall be made with respect to the
tax on ocean marine insurance underwriting profit or any retaliatory
tax.
(b) This section shall become operative on January 1, 2011.
SEC. 13. Section 12253 of the Revenue
and Taxation Code is amended to read:
12253. (a) Each insurer and Medi-Cal
managed care plan required to make prepayments shall remit them
on or before each of the dates of April 1st, June 1st, September 1st
, and December 1st of the current calendar year.
Remittances for prepayments shall be made payable to the Controller
and shall be delivered to the office of the commissioner, accompanied
by a prepayment form prescribed by the commissioner.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 14. Section 12253 is added to the
Revenue and Taxation Code , to read:
12253. (a) Each insurer required to make prepayments shall remit
them on or before each of the dates of April 1st, June 1st, September
1st, and December 1st of the current calendar year. Remittances for
prepayments shall be made payable to the Controller and shall be
delivered to the office of the commissioner, accompanied by a
prepayment form prescribed by the commissioner.
(b) This section shall become operative on January 1, 2011.
SEC. 15. Section 12254 of the Revenue
and Taxation Code is amended to read:
12254. (a) The (1)
For each insurer, the amount of each prepayment shall be 25
percent of the amount of the annual insurance tax liability reported
on the return of the insurer for the preceding calendar year.
(2) For each Medi-Cal managed care plan, the amount of each
prepayment shall be 25 percent of the amount of tax the plan
estimates as the amount of tax imposed by Section 12201 with respect
to the plan.
(b) In establishing the prepayment amount of an insurer
who that has acquired the business of another
insurer, the amount of tax liability of the acquiring insurer
reported for the preceding calendar year shall be deemed to include
the amount of tax liability of the acquired insurer reported for that
year.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 16. Section 12254 is added to the
Revenue and Taxation Code , to read:
12254. (a) The amount of each prepayment shall be 25 percent of
the amount of the annual insurance tax liability reported on the
return of the insurer for the preceding calendar year.
(b) In establishing the prepayment amount of an insurer that has
acquired the business of another insurer, the amount of tax liability
of the acquiring insurer reported for the preceding calendar year
shall be deemed to include the amount of tax liability of the
acquired insurer reported for that year.
(c) This section shall become operative on January 1, 2011.
SEC. 17. Section 12257 of the Revenue
and Taxation Code is amended to read:
12257. (a) If the total amount of
prepayments for any calendar year exceeds the amount of annual tax
for that year, the excess shall be treated as an overpayment of
annual tax and, at the election of the insurer or Medi-Cal
managed care plan , may be credited against the amounts due and
payable for the first prepayment of the following year. Any amount
of the overpayment not so credited shall be allowed as a credit or
refund under Article 2 (commencing with Section 12977) of Chapter 7
of this part.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 18. Section 12257 is added to the
Revenue and Taxation Code , to read:
12257. (a) If the total amount of prepayments for any calendar
year exceeds the amount of annual tax for that year, the excess shall
be treated as an overpayment of annual tax and, at the election of
the insurer, may be credited against the amounts due and payable for
the first prepayment of the following year. Any amount of the
overpayment not so credited shall be allowed as a credit or refund
under Article 2 (commencing with Section 12977) of Chapter 7 of this
part.
(b) This section shall become operative on January 1, 2011.
SEC. 19. Section 12258 of the Revenue
and Taxation Code is amended to read:
12258. (a) Any insurer who
or Medi-Cal managed care plan that fails to pay
any prepayment within the time required shall pay a penalty of 10
percent of the amount of the required prepayment, plus interest at
the modified adjusted rate per month, or fraction thereof,
established pursuant to Section 6591.5, from the due date of the
prepayment until the date of payment but not for any period after the
due date of the annual tax. Assessments of prepayment deficiencies
may be made in the manner provided by deficiency assessments of the
annual tax.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 20. Section 12258 is added to the
Revenue and Taxation Code , to read:
12258. (a) Any insurer that fails to pay any prepayment within
the time required shall pay a penalty of 10 percent of the amount of
the required prepayment, plus interest at the modified adjusted rate
per month, or fraction thereof, established pursuant to Section
6591.5, from the due date of the prepayment until the date of payment
but not for any period after the due date of the annual tax.
Assessments of prepayment deficiencies may be made in the manner
provided by deficiency assessments of the annual tax.
(b) This section shall become operative on January 1, 2011.
SEC. 21. Section 12260 of the Revenue
and Taxation Code is amended to read:
12260. (a) Notwithstanding any other
provision of this article, the commissioner may relieve an insurer
or Medi-Cal managed care plan of its obligation to make
prepayments where the insurer or Medi-Cal managed care plan
establishes to the satisfaction of the commissioner that
either the insurer has ceased to transact
insurance in this state or the Medi-Cal managed care plan has
ceased to operate a plan in this state , or the insurer's
or Medi-Cal managed care plan's annual tax for the current year
will be less than five thousand dollars ($5,000).
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 22. Section 12260 is added to the
Revenue and Taxation Code , to read:
12260. Notwithstanding any other provision of this article, the
commissioner may relieve an insurer of its obligation to make
prepayments where the insurer establishes to the satisfaction of the
commissioner that either the insurer has ceased to transact insurance
in this state, or the insurer's annual tax for the current year will
be less than five thousand dollars ($5,000).
(b) This section shall become operative on January 1, 2011.
SEC. 23. Section 12301 of the Revenue
and Taxation Code is amended to read:
12301. (a) The taxes imposed upon insurers
by the provisions of Section 28 of Article XIII of
the California Constitution and of
this part, except with respect to taxes on ocean marine insurance and
retaliatory taxes, are due and payable annually on or before April
1st of the year following the calendar year in which the insurer
engaged in the business of insurance or transacted insurance in this
state. The taxes imposed with respect to ocean marine insurance are
due and payable on or before June 15th of such
that year.
(b) With respect to Medi-Cal managed care plans, the taxes imposed
by Section 12201 shall be due and payable on or before April 1st of
the year following the calendar year in which the plan contracted
with the Department of Managed Health Care as described in Section
12009.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed. However, any tax imposed by
Section 12201 shall continue to be due and payable until the tax is
paid.
SEC. 24. Section 12301 is added to the
Revenue and Taxation Code , to read:
12301. (a) The taxes imposed upon insurers by Section 28 of
Article XIII of the California Constitution and this part, except
with respect to taxes on ocean marine insurance and retaliatory
taxes, are due and payable annually on or before April 1st of the
year following the calendar year in which the insurer engaged in the
business of insurance or transacted insurance in this state. The
taxes imposed with respect to ocean marine insurance are due and
payable on or before June 15th of that year.
(b) This section shall become operative on January 1, 2011.
SEC. 25. Section 12302 of the Revenue
and Taxation Code is amended to read:
12302. (a) On or before April 1st (or June
15th with respect to taxes on ocean marine insurance) every person
who that is subject to any tax imposed
by the provisions of Section 28 of Article XIII of
the California Constitution or of this
part, in respect to the preceding calendar year shall file, in
duplicate, an insurance a tax return
with the commissioner in such the form
as the commissioner may prescribe. The return shall show
such that information pertaining to its
insurance business (or in the case of a Medi-Cal managed care
plan pertaining to contracts for providing services as described in
Section 12009) in this state as will reflect the basis of its
tax as set forth in Chapters Chapter 2
(commencing with Section 12071) and Chapter 3 (commencing
with Section 12201) of this part, the computation of the amount of
tax for the period covered by the return, the total amount of any tax
prepayments made pursuant to Article 5 (commencing with Section
12251) of chapter Chapter 3 of this
part, and such any other information as
the commissioner may require to carry out the purposes of this part.
Separate returns shall be filed with respect to the following kinds
of insurance:
(a)
(1) Life insurance (or life insurance and disability
insurance).
(b)
(2) Ocean marine insurance.
(c)
(3) Title insurance.
(d)
(4) Insurance other than life insurance (or life
insurance and disability insurance), ocean marine insurance or title
insurance.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 26. Section 12302 is added to the
Revenue and Taxation Code , to read:
12302. (a) On or before April 1st (or June 15th with respect to
taxes on ocean marine insurance) every person that is subject to any
tax imposed by Section 28 of Article XIII of the California
Constitution or this part, in respect to the preceding calendar year
shall file, in duplicate, an insurance tax return with the
commissioner in the form as the commissioner may prescribe. The
return shall show that information pertaining to its insurance
business in this state as will reflect the basis of its tax as set
forth in Chapter 2 (commencing with Section 12071) and Chapter 3
(commencing with Section 12201) of this part, the computation of the
amount of tax for the period covered by the return, the total amount
of any tax prepayments made pursuant to Article 5 (commencing with
Section 12251) of Chapter 3 of this part, and any other information
as the commissioner may require to carry out the purposes of this
part. Separate returns shall be filed with respect to the following
kinds of insurance:
(1) Life insurance (or life insurance and disability insurance).
(2) Ocean marine insurance.
(3) Title insurance.
(4) Insurance other than life insurance (or life insurance and
disability insurance), ocean marine insurance or title insurance.
(b) This section shall become operative on January 1, 2011.
SEC. 27. Section 12303 of the Revenue
and Taxation Code is amended to read:
12303. (a) Every return required by this
article to be filed with the commissioner shall be signed by the
insurer or Medi-Cal managed care plan or an executive
officer of the insurer or plan and shall be made under
oath or contain a written declaration that it is made under
the penalties penalty of perjury. A return of a
foreign insurer may be signed and verified by its manager residing
within this State state . A return of
an alien insurer may be signed and verified by the United States
manager of such the insurer.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 28. Section 12303 is added to the
Revenue and Taxation Code , to read:
12303. (a) Every return required by this article to be filed with
the commissioner shall be signed by the insurer or an executive
officer of the insurer and shall be made under oath or contain a
written declaration that it is made under penalty of perjury. A
return of a foreign insurer may be signed and verified by its manager
residing within this state. A return of an alien insurer may be
signed and verified by the United States manager of the insurer.
(b) This section shall become operative on January 1, 2011.
SEC. 29. Section 12304 of the Revenue
and Taxation Code is amended to read:
12304. (a) Blank forms of returns shall be
furnished by the commissioner on application, but failure to secure
such a the form shall not relieve any
insurer or Medi-Cal managed care plan from making or
filing a timely return.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 30. Section 12304 is added to the
Revenue and Taxation Code , to read:
12304. (a) Blank forms of returns shall be furnished by the
commissioner on application, but failure to secure the form shall not
relieve any insurer from making or filing a timely return.
(b) This section shall become operative on January 1, 2011.
SEC. 31. Section 12305 of the Revenue
and Taxation Code is amended to read:
12305. (a) The insurer or Medi-Cal
managed care plan required to file a return shall deliver the
return in duplicate, together with a remittance payable to the
Controller, for the amount of tax computed and shown thereon, less
any prepayments made pursuant to Article 5 (commencing with Section
12251) of Chapter 3 of this part, to the office of the commissioner.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 32. Section 12305 is added to the
Revenue and Taxation Code , to read:
12305. (a) The insurer required to file a return shall deliver
the return in duplicate, together with a remittance payable to the
Controller, for the amount of tax computed and shown thereon, less
any prepayments made pursuant to Article 5 (commencing with Section
12251) of Chapter 3 of this part, to the office of the commissioner.
(b) This section shall become operative on January 1, 2011.
SEC. 33. Section 12307 of the Revenue
and Taxation Code is amended to read:
12307. (a) Any insurer or Medi-Cal
managed ca re plan to whom
which an extension is granted shall pay, in addition to the tax,
interest at the modified adjusted rate per month, or fraction
thereof, established pursuant to Section 6591.5, from April 1st until
the date of payment.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 34. Section 12307 is added to the
Revenue and Taxation Code , to read:
12307. (a) Any insurer that is granted an extension shall pay, in
addition to the tax, interest at the modified adjusted rate per
month, or fraction thereof, established pursuant to Section 6591.5,
from April 1st until the date of payment.
(b) This section shall become operative on January 1, 2011.
SEC. 35. Section 12412 of the Revenue
and Taxation Code is amended to read:
12412. (a) Upon receipt of the duplicate
copy of the return of an insurer or Medi-Cal managed care plan
the board shall initially assess the tax in accordance with the
data as reported by the insurer or Medi-Cal managed care plan
on the return.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 36. Section 12412 is added to the
Revenue and Taxation Code , to read:
12412. (a) Upon receipt of the duplicate copy of the return of an
insurer the board shall initially assess the tax in accordance with
the data as reported by the insurer on the return.
(b) This section shall become operative on January 1, 2011.
SEC. 37. Section 12413 of the Revenue
and Taxation Code is amended to read:
12413. (a) The board shall promptly
transmit notice of its initial assessment to the commissioner and the
Controller, and if the initial assessment differs from the amount
computed by the insurer or Medi-Cal managed care plan ,
notice shall also be given to the insurer or Medi-Cal managed
care plan .
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 38. Section 12413 is added to the
Revenue and Taxation Code , to read:
12413. (a) The board shall promptly transmit notice of its
initial assessment to the commissioner and the Controller, and if the
initial assessment differs from the amount computed by the insurer,
notice shall also be given to the insurer.
(b) This section shall become operative on January 1, 2011.
SEC. 39. Section 12421 of the Revenue
and Taxation Code is amended to read:
12421. (a) As soon as practicable after an
insurer's or , surplus line broker's
, or Medi-Cal managed care plan's return is filed, the
commissioner shall examine it, together with any information within
his or her possession or that may come into his or her possession,
and he or she shall determine the correct amount of tax of the
insurer or , surplus line broker ,
or Medi-Cal managed care plan .
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 40. Section 12421 is added to the
Revenue and Taxation Code , to read:
12421. (a) As soon as practicable after an insurer's or surplus
line broker's return is filed, the commissioner shall examine it,
together with any information within his or her possession or that
may come into his or her possession, and he or she shall determine
the correct amount of tax of the insurer or surplus line broker.
(b) This section shall become operative on January 1, 2011.
SEC. 41. Section 12422 of the Revenue
and Taxation Code is amended to read:
12422. (a) If the commissioner determines that the amount of tax
disclosed by the insurer's tax return and assessed by the board is
less than the amount of tax disclosed by his or her examination, he
or she shall propose , in writing , to the
board a deficiency assessment for the difference. The proposal shall
set forth the basis for the deficiency assessment and the details of
its computation.
(b) If the commissioner determines that the amount of tax
disclosed by the surplus line broker's tax return is less than the
amount of tax disclosed by his or her examination, he or she shall
propose , in writing , to the board a
deficiency assessment for the difference. The proposal shall set
forth the basis for the deficiency assessment and the details of its
computation.
(c) If the commissioner determines that the amount of tax
disclosed by the Medi-Cal managed care plan's tax return is less than
the amount of tax disclosed by his or her examination, he or she
shall propose, in writing, to the board a deficiency assessment for
the difference. The proposal shall set forth the basis for the
deficiency assessment and the details of its computation.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 42. Section 12422 is added to the
Revenue and Taxation Code , to read:
12422. (a) If the commissioner determines that the amount of tax
disclosed by the insurer's tax return and assessed by the board is
less than the amount of tax disclosed by his or her examination, he
or she shall propose, in writing, to the board a deficiency
assessment for the difference. The proposal shall set forth the basis
for the deficiency assessment and the details of its computation.
(b) If the commissioner determines that the amount of tax
disclosed by the surplus line broker's tax return is less than the
amount of tax disclosed by his or her examination, he or she shall
propose, in writing, to the board a deficiency assessment for the
difference. The proposal shall set forth the basis for the deficiency
assessment and the details of its computation.
(c) This section shall become operative on January 1, 2011.
SEC. 43. Section 12423 of the Revenue
and Taxation Code is amended to read:
12423. (a) If an insurer or
, surplus line broker , or Medi-Cal managed
care plan fails to file a return, the commissioner may require
a return by mailing notice to the insurer or
, surplus line broker , or Medi-Cal managed
care plan to file a return by a specified date or he or she may
without requiring a return, or upon no return having been filed
pursuant to the demand therefor, make an estimate of the amount of
tax due for the calendar year or years in respect to which the
insurer or , surplus line broker ,
or Medi-Cal managed care plan failed to file the return. The
estimate shall be made from any available information which is in the
commissioner's possession or may come into his or her possession,
and the commissioner shall propose , in writing ,
to the board a deficiency assessment for the amount of the
estimated tax. The proposal shall set forth the basis of the estimate
and the details of the computation of the tax.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 44. Section 12423 is added to the
Revenue and Taxation Code , to read:
12423. (a) If an insurer or surplus line broker fails to file a
return, the commissioner may require a return by mailing notice to
the insurer or surplus line broker to file a return by a specified
date or he or she may without requiring a return, or upon no return
having been filed pursuant to the demand therefor, make an estimate
of the amount of tax due for the calendar year or years in respect to
which the insurer or surplus line broker failed to file the return.
The estimate shall be made from any available information which is in
the commissioner's possession or may come into his or her
possession, and the commissioner shall propose, in writing, to the
board a deficiency assessment for the amount of the estimated tax.
The proposal shall set forth the basis of the estimate and the
details of the computation of the tax.
(b) This section shall become operative on January 1, 2011.
SEC. 45. Section 12427 of the Revenue
and Taxation Code is amended to read:
12427. (a) The board shall promptly notify
the insurer or , surplus line broker
, or Medi-Cal managed care plan of a deficiency assessment
made against the insurer or , surplus
line broker , or Medi-Cal managed care plan .
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 46. Section 12427 is added to the
Revenue and Taxation Code , to read:
12427. (a) The board shall promptly notify the insurer or
surplus line broker of a deficiency assessment made against the
insurer or surplus line broker.
(b) This section shall become operative on January 1, 2011.
SEC. 47. Section 12428 of the Revenue
and Taxation Code is amended to read:
12428. (a) An insurer or
, surplus line broker , or Medi-Cal managed care
plan against whom which a
deficiency assessment is made under Section 12424 or 12425 may
petition for redetermination of the deficiency assessment within 30
days after service upon the insurer or ,
surplus line broker , or Medi-Cal managed care plan
of the notice thereof, by filing with the board a written petition
setting forth the grounds of objection to the deficiency assessment
and the correction sought. At the time the petition is filed with the
board , a copy of the petition shall be filed with the
commissioner.
If a petition for redetermination is not filed within the period
prescribed by this section, the deficiency assessment becomes final
and due and payable at the expiration of that period.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 48. Section 12428 is added to the
Revenue and Taxation Code , to read:
12428. (a) An insurer or surplus line broker against which a
deficiency assessment is made under Section 12424 or 12425 may
petition for redetermination of the deficiency assessment within 30
days after service upon the insurer or surplus line broker of the
notice thereof, by filing with the board a written petition setting
forth the grounds of objection to the deficiency assessment and the
correction sought. At the time the petition is filed with the board,
a copy of the petition shall be filed with the commissioner.
If a petition for redetermination is not filed within the period
prescribed by this section, the deficiency assessment becomes final
and due and payable at the expiration of that period.
(b) This section shall become operative on January 1, 2011.
SEC. 49. Section 12429 of the Revenue
and Taxation Code is amended to read:
12429. (a) If a petition for
redetermination of a deficiency assessment is filed within the time
allowed under Section 12428, the board shall reconsider the
deficiency assessment and, if the insurer or
, surplus line broker , or Medi-Cal managed care plan
has so requested in the petition, shall grant an oral hearing
for the presentation of evidence and argument before the board or its
authorized representative. The board shall give the petitioner and
the commissioner at least 20 days' notice of the time and place of
hearing. The hearing may be continued from time to time as may be
necessary.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 50. Section 12429 is added to the
Revenue and Taxation Code , to read:
12429. (a) If a petition for redetermination of a deficiency
assessment is filed within the time allowed under Section 12428, the
board shall reconsider the deficiency assessment and, if the insurer
or surplus line broker has so requested in the petition, shall grant
an oral hearing for the presentation of evidence and argument before
the board or its authorized representative. The board shall give the
petitioner and the commissioner at least 20 days' notice of the time
and place of hearing. The hearing may be continued from time to time
as may be necessary.
(b) This section shall become operative on January 1, 2011.
SEC. 51. Section 12431 of the Revenue
and Taxation Code is amended to read:
12431. (a) The order or decision of the
board upon a petition for redetermination of a deficiency assessment
becomes final 30 days after service on the insurer or
, surplus line broker , or Medi-Cal managed
care plan of a notice thereof, and any resulting deficiency
assessment is due and payable at the time the order or decision
becomes final.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 52. Section 12431 is added to the
Revenue and Taxation Code , to read:
12431. (a) The order or decision of the board upon a petition for
redetermination of a deficiency assessment becomes final 30 days
after service on the insurer or surplus line broker of a notice
thereof, and any resulting deficiency assessment is due and payable
at the time the order or decision becomes final.
(b) This section shall become operative on January 1, 2011.
SEC. 53. Section 12433 of the Revenue
and Taxation Code is amended to read:
12433. (a) If before the expiration of the
time prescribed in Section 12432 for giving of a notice of deficiency
assessment the insurer or , surplus
line broker , or Medi-Cal managed care plan has consented
in writing to the giving of the notice after such
that time, the notice may be given at any time prior to
the expiration of the time agreed upon. The period so agreed upon may
be extended by subsequent agreements in writing made before the
expiration of the period previously agreed upon.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 54. Section 12433 is added to the
Revenue and Taxation Code , to read:
12433. (a) If before the expiration of the time prescribed in
Section 12432 for giving of a notice of deficiency assessment the
insurer or surplus line broker has consented in writing to the giving
of the notice after that time, the notice may be given at any time
prior to the expiration of the time agreed upon. The period so agreed
upon may be extended by subsequent agreements in writing made before
the expiration of the period previously agreed upon.
(b) This section shall become operative on January 1, 2011.
SEC. 55. Section 12434 of the Revenue
and Taxation Code is amended to read:
12434. (a) Any notice required by this
article shall be placed in a sealed envelope, with postage paid,
addressed to the insurer or , surplus
line broker , or Medi-Cal managed care plan at
his or her its address as it appears in the
records of the commissioner or the board. The giving of notice shall
be deemed complete at the time of deposit of the notice in the United
States Post Office, or a mailbox, sub-post
subpost office, substation or mail chute or other facility
regularly maintained or provided by the United States Postal Service,
without extension of time for any reason. In lieu of mailing, a
notice may be served personally by delivering to the person to be
served and service shall be deemed complete at the time of
such the delivery. Personal service to a
corporation may be made by delivery of a notice to any person
designated in the Code of Civil Procedure to be served for the
corporation with summons and complaint in a civil action.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 56. Section 12434 is added to the
Revenue and Taxation Code , to read:
12434. (a) Any notice required by this article shall be placed in
a sealed envelope, with postage paid, addressed to the insurer or
surplus line broker at its address as it appears in the records of
the commissioner or the board. The giving of notice shall be deemed
complete at the time of deposit of the notice in the United States
Post Office, or a mailbox, subpost office, substation or mail chute
or other facility regularly maintained or provided by the United
States Postal Service, without extension of time for any reason. In
lieu of mailing, a notice may be served personally by delivering to
the person to be served and service shall be deemed complete at the
time of the delivery. Personal service to a corporation may be made
by delivery of a notice to any person designated in the Code of Civil
Procedure to be served for the corporation with summons and
complaint in a civil action.
(b) This section shall become operative on January 1, 2011.
SEC. 57. Section 12491 of the Revenue
and Taxation Code is amended to read:
12491. (a) Every tax levied upon an insurer under the
provisions of Article XIII of the California
Constitution and of this part is a lien upon all
property and franchises of every kind and nature belonging to the
insurer, and has the effect of a judgment against the insurer.
(b) (1) Every tax levied upon a surplus line broker under
the provisions of Part 7.5 (commencing with Section 13201)
of Division 2 is a lien upon all property and franchises of every
kind and nature belonging to the surplus line broker, and has the
effect of a judgment against the surplus line broker.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the surplus line broker.
(c) (1) Every tax levied upon a Medi-Cal managed care plan under
Chapter 1 (commencing with Section 12001) is a lien upon all property
and franchises of every kind and nature belonging to the Medi-Cal
managed care plan, and has the effect of a judgment against the
Medi-Cal managed care plan.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the Medi-Cal managed care plan.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 58. Section 12491 is added to the
Revenue and Taxation Code , to read:
12491. (a) Every tax levied upon an insurer under the provisions
of Article XIII of the California Constitution and of this part is a
lien upon all property and franchises of every kind and nature
belonging to the insurer, and has the effect of a judgment against
the insurer.
(b) (1) Every tax levied upon a surplus line broker under the
provisions of Part 7.5 (commencing with Section 13201) of Division 2
is a lien upon all property and franchises of every kind and nature
belonging to the surplus line broker, and has the effect of a
judgment against the surplus line broker.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the surplus line broker.
(c) This section shall become operative on January 1, 2011.
SEC. 59. Section 12493 of the Revenue
and Taxation Code is amended to read:
12493. (a) Every lien has the effect of an
execution duly levied against all property of a delinquent insurer
or , surplus line broker , or
Medi-Cal managed care plan .
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 60. Section 12493 is added to the
Revenue and Taxation Code , to read:
12493. (a) Every lien has the effect of an execution duly levied
against all property of a delinquent insurer or surplus line broker.
(b) This section shall become operative on January 1, 2011.
SEC. 61. Section 12494 of the Revenue
and Taxation Code is amended to read:
12494. (a) No judgment is satisfied nor
lien removed until either:
(a)
(1) The taxes, interest, penalties, and costs are paid.
(b)
(2) The insurer's or ,
surplus line broker's , or Medi-Cal managed care plan's
property is sold for the payment thereof.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 62. Section 12494 is added to the
Revenue and Taxation Code , to read:
12494. (a) No judgment is satisfied nor lien removed until
either:
(1) The taxes, interest, penalties, and costs are paid.
(2) The insurer's or surplus line broker's property is sold for
the payment thereof.
(b) This section shall become operative on January 1, 2011.
SEC. 63. Section 12601 of the Revenue
and Taxation Code is amended to read:
12601. (a) Amounts of taxes, interest
, and penalties not remitted to the commissioner with the
original return of the insurer or Medi-Cal managed care plan
shall be payable to the Controller.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 64. Section 12601 is added to the
Revenue and Taxation Code , to read:
12601. (a) Amounts of taxes, interest, and penalties not remitted
to the commissioner with the original return of the insurer shall be
payable to the Controller.
(b) This section shall become operative on January 1, 2011.
SEC. 65. Section 12602 of the Revenue
and Taxation Code is amended to read:
12602. (a) (1) On and after January 1,
1994, and before January 1, 1995, each insurer whose annual taxes
exceed fifty thousand dollars ($50,000) shall make payment by
electronic funds transfer, as defined by Section 45 of the Insurance
Code. On and after January 1, 1995, each insurer whose annual taxes
exceed twenty thousand dollars ($20,000) shall make payment by
electronic funds transfer. The insurer shall choose one of the
acceptable methods described in Section 45 of the Insurance Code for
completing the electronic funds transfer.
(2) Each Medi-Cal managed care plan shall make payment by
electronic funds transfer, as defined by Section 45 of the Insurance
Code. The plan shall choose one of the acceptable methods described
in Section 45 of the Insurance Code for completing the electronic
funds transfer.
(b) Payment is shall be deemed
complete on the date the electronic funds transfer is initiated, if
settlement to the state's demand account occurs on or before the
banking day following the date the transfer is initiated. If
settlement to the state's demand account does not occur on or before
the banking day following the date the transfer is initiated, payment
is shall be deemed to occur on the
date settlement occurs.
(c) (1) Any insurer or Medi-Cal managed care plan
required to remit taxes by electronic funds transfer pursuant to this
section who that remits those taxes by
means other than an appropriate electronic funds transfer, shall be
assessed a penalty in an amount equal to 10 percent of the taxes due
at the time of the payment.
(2) If the Department of Insurance finds that an insurer's or
Medi-Cal managed care plan's failure to make payment by an
appropriate electronic funds transfer in accordance with subdivision
(a) is due to reasonable cause or circumstances beyond the insurer's
or Medi-Cal managed care plan's control, and occurred
notwithstanding the exercise of ordinary care and in the absence of
willful neglect, that insurer or Medi-Cal managed care plan
shall be relieved of the penalty provided in paragraph (1).
(3) Any insurer or Medi-Cal managed care plan seeking
to be relieved of the penalty provided in paragraph (1) shall file
with the Department of Insurance a statement under penalty of perjury
setting forth the facts upon which the claim for relief is based.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 66. Section 12602 is added to the
Revenue and Taxation Code , to read:
12602. (a) On and after January 1, 1994, and before January 1,
1995, each insurer whose annual taxes exceed fifty thousand dollars
($50,000) shall make payment by electronic funds transfer, as defined
by Section 45 of the Insurance Code. On and after January 1, 1995,
each insurer whose annual taxes exceed twenty thousand dollars
($20,000) shall make payment by electronic funds transfer. The
insurer shall choose one of the acceptable methods described in
Section 45 of the Insurance Code for completing the electronic funds
transfer.
(b) Payment shall be deemed complete on the date the electronic
funds transfer is initiated, if settlement to the state's demand
account occurs on or before the banking day following the date the
transfer is initiated. If settlement to the state's demand account
does not occur on or before the banking day following the date the
transfer is initiated, payment shall be deemed to occur on the date
settlement occurs.
(c) (1) Any insurer required to remit taxes by electronic funds
transfer pursuant to this section that remits those taxes by means
other than an appropriate electronic funds transfer, shall be
assessed a penalty in an amount equal to 10 percent of the taxes due
at the time of the payment.
(2) If the Department of Insurance finds that an insurer's failure
to make payment by an appropriate electronic funds transfer in
accordance with subdivision (a) is due to reasonable cause or
circumstances beyond the insurer's control, and occurred
notwithstanding the exercise of ordinary care and in the absence of
willful neglect, that insurer shall be relieved of the penalty
provided in paragraph (1).
(3) Any insurer seeking to be relieved of the penalty provided in
paragraph (1) shall file with the Department of Insurance a statement
under penalty of perjury setting forth the facts upon which the
claim for relief is based.
(d) This section shall become operative on January 1, 2011.
SEC. 67. Section 12631 of the Revenue
and Taxation Code is amended to read:
12631. (a) Any insurer who
or Medi-Cal managed care plan that fails to pay
any tax, except a tax determined as a deficiency assessment by the
board under Article 3 (commencing with Section 12421) of Chapter 4,
within the time required, shall pay a penalty of 10 percent of the
amount of the tax in addition to the tax, plus interest at the
modified adjusted rate per month, or fraction thereof, established
pursuant to Section 6591.5, from the due date of the tax until the
date of payment.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 68. Section 12631 is added to the
Revenue and Taxation Code , to read:
12631. (a) Any insurer that fails to pay any tax, except a tax
determined as a deficiency assessment by the board under Article 3
(commencing with Section 12421) of Chapter 4, within the time
required, shall pay a penalty of 10 percent of the amount of the tax
in addition to the tax, plus interest at the modified adjusted rate
per month, or fraction thereof, established pursuant to Section
6591.5, from the due date of the tax until the date of payment.
(b) This section shall become operative on January 1, 2011.
SEC. 69. Section 12632 of the Revenue
and Taxation Code is amended to read:
12632. (a) An insurer who
or Medi-Cal managed care plan that fails to pay
any deficiency assessment when it becomes due and payable shall, in
addition to the deficiency assessment, pay a penalty of 10 percent of
the amount of the deficiency assessment, exclusive of interest and
penalties. The amount of any deficiency assessment, exclusive of
penalties, shall bear interest at the modified adjusted rate per
month, or fraction thereof, established pursuant to Section 6591.5,
from the date on which the amount, or any portion thereof, would have
been payable if properly reported and assessed until the date of
payment.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 70. Section 12632 is added to the
Revenue and Taxation Code , to read:
12632. (a) An insurer that fails to pay any deficiency assessment
when it becomes due and payable shall, in addition to the deficiency
assessment, pay a penalty of 10 percent of the amount of the
deficiency assessment, exclusive of interest and penalties. The
amount of any deficiency assessment, exclusive of penalties, shall
bear interest at the modified adjusted rate per month, or fraction
thereof, established pursuant to Section 6591.5, from the date on
which the amount, or any portion thereof, would have been payable if
properly reported and assessed until the date of payment.
(b) This section shall become operative on January 1, 2011.
SEC. 71. Section 12636 of the Revenue
and Taxation Code is amended to read:
12636. (a) If the board finds that an
insurer's or Medi-Cal managed care plan's failure to make
a timely return or payment is due to reasonable cause and to
circumstances beyond the insurer's or Medi-Cal managed care plan'
s control, and which occurred despite the exercise of ordinary
care and in the absence of willful neglect, the insurer or
Medi-Cal managed care plan may be relieved of the penalty
provided by Section 12258, 12282, 12287, 12631, 12632, or 12633.
Any insurer or Medi-Cal managed care plan seeking to be
relieved of the penalty shall file with the board a statement under
penalty of perjury setting forth the facts upon which the claim for
relief is based.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 72. Section 12636 is added to the
Revenue and Taxation Code , to read:
12636. (a) If the board finds that an insurer's failure to make a
timely return or payment is due to reasonable cause and to
circumstances beyond the insurer's control, and which occurred
despite the exercise of ordinary care and in the absence of willful
neglect, the insurer may be relieved of the penalty provided by
Section 12258, 12282, 12287, 12631, 12632, or 12633.
Any insurer seeking to be relieved of the penalty shall file with
the board a statement under penalty of perjury setting forth the
facts upon which the claim for relief is based.
(b) This section shall become operative on January 1, 2011.
SEC. 73. Section 12636.5 of the Revenue
and Taxation Code is amended to read:
12636.5. (a) Every payment on an insurer's
or , surplus line broker's , or
Medi-Cal managed care plan's delinquent annual tax shall be
applied as follows:
(a)
(1) First, to any interest due on the tax.
(b)
(2) Second, to any penalty imposed by this part.
(c)
(3) The balance, if any, to the tax itself.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 74. Section 12636.5 is added to the
Revenue and Taxation Code , to read:
12636.5. (a) Every payment on an insurer's or surplus line broker'
s delinquent annual tax shall be applied as follows:
(1) First, to any interest due on the tax.
(2) Second, to any penalty imposed by this part.
(3) The balance, if any, to the tax itself.
(b) This section shall become operative on January 1, 2011.
SEC. 75. Section 12679 of the Revenue
and Taxation Code is amended to read:
12679. (a) If an insurer's or Medi-Cal
managed care plan's right to do business has been forfeited or
its corporate powers suspended, service of summons may be made upon
the persons designated by law to be served as agents or officers of
the insurer or Medi-Cal managed care plan , and these
persons are the agents of the insurer or Medi-Cal managed care
plan for all purposes necessary in order to prosecute the
action. In the case of corporations whose powers have been suspended,
the persons constituting the board of directors may defend the
action.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 76. Section 12679 is added to the
Revenue and Taxation Code , to read:
12679. (a) If an insurer's right to do business has been
forfeited or its corporate powers suspended, service of summons may
be made upon the persons designated by law to be served as agents or
officers of the insurer, and these persons are the agents of the
insurer for all purposes necessary in order to prosecute the action.
In the case of corporations whose powers have been suspended, the
persons constituting the board of directors may defend the action.
(b) This section shall become operative on January 1, 2011.
SEC. 77. Section 12681 of the Revenue
and Taxation Code is amended to read:
12681. (a) In the action, a certificate of
the Controller or of the secretary of the board, showing unpaid taxes
against an insurer or Medi-Cal managed care plan is prima
facie evidence of:
(a)
(1) The assessment of the taxes.
(b)
(2) The delinquency.
(c)
(3) The amount of the taxes, interest, and penalties
due and unpaid to the State state .
(d)
(4) That the insurer or Medi-Cal managed care plan
is indebted to the State state
in the amount of taxes, interest, and penalties appearing unpaid.
(e)
(5) That there has been compliance with all the
requirements of law in relation to the assessment of the taxes.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 78. Section 12681 is added to the
Revenue and Taxation Code , to read:
12681. (a) In the action, a certificate of the Controller or of
the secretary of the board, showing unpaid taxes against an insurer
is prima facie evidence of:
(1) The assessment of the taxes.
(2) The delinquency.
(3) The amount of the taxes, interest, and penalties due and
unpaid to the state.
(4) That the insurer is indebted to the state in the amount of
taxes, interest, and penalties appearing unpaid.
(5) That there has been compliance with all the requirements of
law in relation to the assessment of the taxes.
(b) This section shall become operative on January 1, 2011.
SEC. 79. Section 12801 of the Revenue
and Taxation Code is amended to read:
12801. (a) Annually, between December 10th
and 15th, the Controller shall transmit to the commissioner a
statement showing the names of all insurers and Medi-Cal managed
care plans that failed to pay on or before December 10th the
whole or any portion of the tax that became delinquent in the
preceding June or which has been unpaid for more than 30 days from
the date it became due and payable as a deficiency assessment under
this part or the whole or any part of the interest or penalties due
with respect to the tax. The statement shall show the amount of the
tax, interest, and penalties due from each insurer or Medi-Cal
managed care plan .
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 80. Section 12801 is added to the
Revenue and Taxation Code , to read:
12801. (a) Annually, between December 10th and 15th, the
Controller shall transmit to the commissioner a statement showing the
names of all insurers that failed to pay on or before December 10th
the whole or any portion of the tax that became delinquent in the
preceding June or which has been unpaid for more than 30 days from
the date it became due and payable as a deficiency assessment under
this part or the whole or any part of the interest or penalties due
with respect to the tax. The statement shall show the amount of the
tax, interest, and penalties due from each insurer.
(b) This section shall become operative on January 1, 2011.
SEC. 81. Section 12951 of the Revenue
and Taxation Code is amended to read:
12951. (a) If any amount has been illegally
assessed, the board shall set forth that fact in its records,
certify the amount determined to be assessed in excess of the amount
legally assessed and the insurer or ,
surplus line broker , or Medi-Cal managed care plan
against whom which the assessment was
made, and authorize the cancellation of the amount upon the records
of the Controller and the board. The board shall mail a notice to the
insurer or , surplus line broker
, or Medi-Cal managed care plan of any cancellation
authorized. Any proposed 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
prior to the effective date of that determination.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 82. Section 12951 is added to the
Revenue and Taxation Code , to read:
12951. (a) If any amount has been illegally assessed, the board
shall set forth that fact in its records, certify the amount
determined to be assessed in excess of the amount legally assessed
and the insurer or surplus line broker against which the assessment
was made, and authorize the cancellation of the amount upon the
records of the Controller and the board. The board shall mail a
notice to the insurer or surplus line broker of any cancellation
authorized. Any proposed 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
prior to the effective date of that determination.
(b) This section shall become operative on January 1, 2011.
SEC. 83. Section 12977 of the Revenue
and Taxation Code is amended to read:
12977. (a) If the board determines that any tax, interest, or
penalty 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 of the board, certify the amount of the taxes,
interest, or penalties collected in excess of what was legally due,
and from whom they were collected or by whom paid, and certify the
excess to the Controller for credit or refund.
(b) The Controller upon receipt of a certification for credit or
refund shall credit the excess on any amounts then due and payable
from the insurer or , surplus line
broker , or Medi-Cal managed care plan under this part and
refund the balance.
(c) Any proposed 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
prior to the effective date of that determination.
(d) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 84. Section 12977 is added to the
Revenue and Taxation Code , to read:
12977. (a) If the board determines that any tax, interest, or
penalty 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 of the board, certify the amount of the taxes,
interest, or penalties collected in excess of what was legally due,
and from whom they were collected or by whom paid, and certify the
excess to the Controller for credit or refund.
(b) The Controller upon receipt of a certification for credit or
refund shall credit the excess on any amounts then due and payable
from the insurer or surplus line broker under this part and refund
the balance.
(c) Any proposed 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
prior to the effective date of that determination.
(d) This section shall become operative on January 1, 2011.
SEC. 85. Section 12983 of the Revenue
and Taxation Code is amended to read:
12983. (a) Interest shall be allowed upon
the amount of any overpayment of tax by an insurer or Medi-Cal
managed care plan pursuant to this part at the modified
adjusted rate per month established pursuant to Section 6591.5, from
the first day of the monthly period following the period during which
the overpayment was made. For purposes of this section, "monthly
period" means the month commencing on the day after the due date of
the payment through the same date as the due date in each successive
month. In addition, a refund or credit shall be made of any interest
imposed upon the claimant with respect to the amount being refunded
or credited.
The interest shall be paid as follows:
(a)
(1) In the case of a refund, to the last day of the
calendar month following the date upon which the claimant is notified
in writing that a claim may be filed or the date upon which the
claim is approved by the board, whichever date is the earlier.
(b)
(2) In the case of a credit, to the same date as that
to which interest is computed on the tax or amount against which the
credit is applied.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 86. Section 12983 is added to the
Revenue and Taxation Code , to read:
12983. (a) Interest shall be allowed upon the amount of any
overpayment of tax by an insurer pursuant to this part at the
modified adjusted rate per month established pursuant to Section
6591.5, from the first day of the monthly period following the period
during which the overpayment was made. For purposes of this section,
"monthly period" means the month commencing on the day after the due
date of the payment through the same date as the due date in each
successive month. In addition, a refund or credit shall be made of
any interest imposed upon the claimant with respect to the amount
being refunded or credited.
The interest shall be paid as follows:
(1) In the case of a refund, to the last day of the calendar month
following the date upon which the claimant is notified in writing
that a claim may be filed or the date upon which the claim is
approved by the board, whichever date is the earlier.
(2) In the case of a credit, to the same date as that to which
interest is computed on the tax or amount against which the credit is
applied.
(b) This section shall become operative on January 1, 2011.
SEC. 87. Section 12984 of the Revenue
and Taxation Code is a mended to read:
12984. (a) If the board determines that any overpayment has been
made intentionally or made not incident to a bona fide and orderly
discharge of a liability reasonably assumed by the insurer
or , surplus line broker , or Medi-Cal
managed care plan to be imposed by law, no interest shall be
allowed on the overpayment.
(b) If any insurer or , surplus line
broker , or Medi-Cal managed care plan which has filed a
claim for refund requests the board to defer action on its claim, the
board, as a condition to deferring action, may require the claimant
to waive interest for the period during which the insurer or
, surplus line broker , or Medi-Cal
managed care plan requests the board to defer action on the
claim.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 88. Section 12984 is added to the
Revenue and Taxation Code , to read:
12984. (a) If the board determines that any overpayment has been
made intentionally or made not incident to a bona fide and orderly
discharge of a liability reasonably assumed by the insurer or surplus
line broker to be imposed by law, no interest shall be allowed on
the overpayment.
(b) If any insurer or surplus line broker which has filed a claim
for refund requests the board to defer action on its claim, the
board, as a condition to deferring action, may require the claimant
to waive interest for the period during which the insurer or surplus
line broker requests the board to defer action on the claim.
(c) This section shall become operative on January 1, 2011.
SEC. 89. Section 13108 of the Revenue
and Taxation Code is amended to read:
13108. (a) A judgment shall not be rendered
in favor of the plaintiff when the action is brought by or in the
name of an assignee of the insurer paying the tax, interest, or
penalties, or by any person other than the insurer or Medi-Cal
managed care plan that has paid the tax, interest, or
penalties.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 90. Section 13108 is added to the
Revenue and Taxation Code , to read:
13108. (a) A judgment shall not be rendered in favor of the
plaintiff when the action is brought by or in the name of an assignee
of the insurer paying the tax, interest, or penalties, or by any
person other than the insurer that has paid the tax, interest, or
penalties.
(b) This section shall become operative on January 1, 2011.
SEC. 91. Section 14301.11 is added to the
Welfare and Institutions Code , to read:
14301.11. (a) The department shall use funds attributable to the
tax on Medi-Cal managed care plans imposed by Section 12201 of the
Revenue and Taxation Code for the purpose specified in paragraph (1)
of subdivision (b) of Section 12201 of the Revenue and Taxation Code.
(b) This section shall remain in effect only until January 1,
2011, and as of that date is repealed.
SEC. 92. Notwithstanding any other law to the
contrary, the amendments to Sections 12201, 12204, 12251, 12253,
12254, 12257, 12258, 12260, 12301, 12302, 12303, 12304, 12305, 12307,
12412, 12413, 12421, 12422, 12423, 12427, 12428, 12429, 12431,
12433, 12434, 12491, 12493, 12494, 12601, 12602, 12631, 12632, 12636,
12636.5, 12679, 12681, 12801, 12951, 12977, 12983, 12984, and 13108
of, the addition of Sections 12009 and 12207 to, and the addition of
Article 4 (commencing with Section 12240) to Chapter 3 of Part 7 of
Division 2 of, the Revenue and Taxation Code, and the addition of
Section 14301.11 to the Welfare and Institutions Code, by this act
shall have no force or effect if any of the following applies:
(a) There is a final judicial determination made by any state or
federal court that is not appealed, or by a court of appellate
jurisdiction that is not further appealed, in any action by any
party, or a final determination by the administrator of the federal
Centers for Medicare and Medicaid Services, that federal financial
participation is not available with respect to any payment made under
the methodology implemented pursuant to this act because the
methodology is invalid, unlawful, or contrary to any provision of
federal law or regulations, or of state law.
(b) The revenues derived from the imposition of the tax pursuant
to Section 12201 of the Revenue and Taxation Code on Medi-Cal managed
care plans are diverted in whole or in part from the purpose of
implementing the purposes specified in subdivision (b) of Section
12201 of the Revenue and Taxation Code.
(c) There is a final judicial determination made by any state or
federal court that is not appealed, or by a court of appellate
jurisdiction that is not further appealed, in any action by any
party, that the tax imposed pursuant to this act on Medi-Cal managed
care plans is required to be in lieu of all other taxes as described
in Section 12204 of the Revenue and Taxation Code.
SEC. 93. If there is a delay for any reason in the
implementation of Section 14301.11 of the Welfare and Institutions
Code in the 2009-10 rate year or in any other rate year, both of the
following shall apply:
(a) A Medi-Cal managed care plan subject to the tax imposed
pursuant to Section 12201 of the Revenue and Taxation Code shall be
assessed the amount the plan will be required to pay, but shall not
be required to pay the tax until the State Department of Health Care
Services meets all of its obligations pursuant to Sections 14301.1
and 14301.11 of the Welfare and Institutions Code.
(b) The department may retroactively increase rates and make
payments to plans.
SEC. 94. The Legislature finds and declares that
the amendments to Section 130105 of the Health and Safety Code made
by Section 1 of this act further the goals and purposes of the
California Children and Families Act of 1998.
SEC. 95. (a) The Director of Finance shall make
the necessary budgetary adjustments to allow the expenditure of funds
allocated by the commission pursuant to the amendments to Section
130105 of the Health and Safety Code made by this act.
(b) Within 30 days of making any budgetary adjustments pursuant to
subdivision (a), the Director of Finance shall notify the
appropriate committees of the Legislature of those adjustments.
SEC. 96. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SEC. 97. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to address important issues relating to health care, it
is necessary that this act go into effect immediately.
SECTION 1. Chapter 7 (commencing with Section
33700) is added to Part 1 of Division 24 of the Health and Safety
Code, to read:
CHAPTER 7. HOME MORTGAGE LOANS
33700. The Legislature finds and hereby declares all of the
following:
(a) The end of the housing boom in 2005 has led to declining
housing prices and the reduced availability of mortgage credit.
(b) As housing prices fall, delinquencies and foreclosures on
subprime and nontraditional mortgages have increased to historically
high levels. Lenders with exposure to subprime and nontraditional
mortgage losses have tightened their lending standards. Consequently,
homeowners with subprime and nontraditional mortgages are having
difficulty refinancing into more affordable loans.
(c) With many subprime and nontraditional mortgages facing their
first interest reset during 2009, mortgage foreclosures will increase
significantly and, along with falling housing prices, may overwhelm
the ability of mortgage markets to restructure or refinance loans for
creditworthy borrowers.
(d) Home foreclosures impose significant costs not only on
borrowers and lenders, but also on local governments, neighboring
homeowners, and others with a financial stake in nearby properties.
This is particularly true of subprime and nontraditional mortgage
foreclosures because they tend to be concentrated geographically. The
effect of multiple foreclosures in limited geographic areas can
cause declines in property values, accelerating the decline of entire
neighborhoods. Increased crime and vandalism, lack of proper
maintenance, and the spread of blight are other consequences of
concentrated foreclosures in limited geographic areas.
(e) Decent housing for all of the people of this state is vital to
the state's future peace and prosperity.
(f) A fundamental purpose of redevelopment is to expand the supply
of low-income and moderate-income housing.
(g) In order to more effectively respond to the current crisis in
subprime and nontraditional mortgage foreclosures, redevelopment
agencies should be given greater flexibility on a temporary basis to
do all of the following:
(1) Acquire, assume, or refinance existing subprime and
nontraditional mortgages in default or at risk of default, or make
loans to eligible homeowners faced with foreclosure.
(2) Acquire and then maintain, resell, or rent foreclosed homes.
33701. For purposes of this chapter, the following terms have the
following meanings, unless the context clearly requires otherwise:
(a) "Eligible homeowner" means the trustor of a subprime or
nontraditional mortgage who occupies a home encumbered by the
subprime or nontraditional mortgage as his or her principal place of
residence, if either of the following applies:
(1) The obligation secured by the subprime or nontraditional
mortgage has a payment that is 30 days or more past due or has a
scheduled interest rate increase that will create a financial
hardship likely to produce a default.
(2) A notice of default has been recorded against the obligation
secured by the subprime or nontraditional mortgage pursuant to
Section 2924 of the Civil Code.
(b) The "fund" is the Low and Moderate Income Housing Fund
established pursuant to Section 33334.3.
(c) "Nontraditional mortgage" means a consumer loan that allows
the borrower to defer payment of principal and, under certain
circumstances, interest, as set forth in the "Interagency Guidance on
Nontraditional Mortgage Product Risks" (71 Fed. Reg. 58609 (Oct. 4,
2006)).
(d) (1) "Subprime mortgage" means a deed of trust securing a loan
that was originated on or after January 1, 2002, was issued for the
purchase of a single-family home, residential condominium, or
townhome, but not a mobilehome, and meets any of the following
conditions:
(A) Has an annual percentage rate that is more than one of the
following:
(i) For a senior loan, 3 percent, plus the yield on United States
Treasury notes with comparable maturities.
(ii) For a subordinate loan, 5 percent, plus the yield on United
States Treasury notes with comparable maturities.
(B) Has interest-only payments, or an adjustable rate that may
lead to negative amortization.
(2) "Subprime mortgage" does not include a subordinate home equity
line of credit or a reverse mortgage.
33702. (a) The agency may expend any money that is not held in
the fund to purchase, assume, or refinance, or assist lenders or
nonprofit or for-profit developers in purchasing, assuming, or
refinancing, subprime or nontraditional mortgages on homes owned by
eligible homeowners who reside within its jurisdiction, or make loans
to those eligible homeowners, if the combined annual income of the
members of the eligible homeowner's household does not exceed 150
percent of area median income, adjusted for family size by the
department in accordance with adjustment factors adopted and amended
from time to time.
(b) The amount of assistance provided under subdivision (a) for
any single eligible homeowner shall not exceed an amount equal to the
loan to value ratio applied by the Federal Housing Administration
for an insured loan for the applicable geographic area, multiplied by
the current value of the home.
(c) The agency may also expend money that is not held in the fund
to provide mortgage or credit counseling services to existing or
prospective homeowners who qualify for assistance under subdivision
(a).
33703. (a) The agency may expend any money that is not held in
the fund to purchase, or assist lenders or nonprofit or for-profit
developers in purchasing, homes within its jurisdiction that have
been foreclosed and are vacant, for sale to any purchaser, regardless
of income.
(b) Homes purchased under this section may be managed, maintained,
and rented prior to resale.
33704. Funds shall be expended pursuant to this chapter in a
manner that preserves the exemption from federal and state income
taxes of interest on the bonds or notes issued by the agency under
this division, if applicable.
33705. This chapter shall apply notwithstanding any other
provision of this division.
33706. Consistent with this chapter, the agency may adopt local
criteria governing the use of funds and provision of other assistance
authorized under this chapter, including, but not limited to,
limiting assistance to defined neighborhoods or a geographic area, or
targeting specific income categories.
33707. This chapter shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.