BILL NUMBER: SBX1 1	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  DECEMBER 16, 2008

INTRODUCED BY   Senator Ducheny

                        DECEMBER 8, 2008

    An act relating to the Budget Act of 2008.  
An act to add Sections 6051.7 and 6201.7 to, to add Chapter 5.8
(commencing with Section 32231) to Part 14 of, and to add Part 21
(commencing with Section 42001) to, Division 2 of, the Revenue and
Taxation Code, relating to ta   xation, to take effect
immediately, tax levy. 



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1, as amended, Ducheny.  Budget Act of 2008. 
 Taxation.  
   Existing law imposes a state sales and use tax on retailers and on
the storage, use, or other consumption of tangible personal property
in this state at the rate of 61/4% of the gross receipts from the
retail sale of tangible personal property in this state and of the
sales price of tangible personal property purchased from any retailer
for storage, use, or other consumption in this state.  
   This bill would provide that the state sales and use tax rate on
the sale of, and on the storage, use, or other consumption of,
tangible personal property, would increase 11/2% to a rate of 73/4%
from March 1, 2009, to and including December 31, 2011.  
   The Alcoholic Beverage Tax Law imposes an excise tax, at specified
rates, for the privilege of selling or possessing for sale beer,
wine, sparkling wine, sparkling cider, and distilled spirits. The
proceeds from the excise tax are deposited in the Alcoholic Beverage
Control Fund for transfer to the General Fund. The Alcoholic Beverage
Tax Law also imposes a surtax, at specified rates, for the privilege
of selling or possessing for sale, beer, wine, sparkling cider, and
distilled spirits. The proceeds from this surtax are deposited into
the General Fund.  
   This bill would, beginning on February 1, 2009, impose an
additional surtax on beer, wine, sparkling cider, and distilled
spirits, and would also impose a surtax on sparkling wines. This bill
would require that the revenues derived from the additional taxes be
remitted to the State Board of Equalization and deposited in the
General Fund.  
   Existing law imposes various taxes, including taxes on the
privilege of engaging in certain activities. The Fee Collection
Procedures Law, the violation of which is a crime, provides
procedures for the collection of certain fees and surcharges. 

   This bill would impose an oil severance tax on and after February
1, 2009, upon any producer for the privilege of severing oil from the
earth or water in this state for sale, transport, consumption,
storage, profit, or use, as provided, at the rate of 9.9% of the
gross value of each barrel of oil severed. The tax would be
administered by the Department of Conservation and would be collected
pursuant to the procedures set forth in the Fee Collection
Procedures Law. The bill would require the department to deposit all
tax revenues, penalties, and interest collected pursuant to these
provisions into the General Fund, except for a specified sum, which
would be required to be deposited into the Oil, Gas, and Geothermal
Administrative Fund.  
   Because this bill would expand the scope of the Fee Collection
Procedures Law, the violation of which is a crime, it would impose a
state-mandated local program.  
   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 result in a change in state taxes for the purpose
of increasing state revenues within the meaning of Section 3 of
Article XIII A of the California Constitution, and thus would require
for passage the approval of 2/3 of the membership of each house of
the Legislature.  
   The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. The Governor issued a proclamation declaring a fiscal
emergency, and calling a special session for this purpose, on
December 1, 2008.  
   This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on December 1, 2008,
pursuant to the California Constitution.  
   This bill would take effect immediately as a tax levy, but the
operative dates of its provisions would be the dates specified in its
provisions.  
   This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2008. 

   The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. The Governor issued a proclamation declaring a fiscal
emergency, and calling a special session for this purpose, on
December 1, 2008.  
   This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on December 1, 2008,
pursuant to the California Constitution. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee:  no   yes  .
State-mandated local program:  no   yes  .


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

   SECTION 1.    Section 6051.7 is added to the 
 Revenue and Taxation Code   , to read:  
   6051.7.  (a) In addition to the taxes imposed by Section 6051 and
any other provision of this part, for the privilege of selling
tangible personal property at retail, a tax is hereby imposed upon
all retailers at the rate of 11/2 percent of the gross receipts of
any retailer from the sale of all tangible personal property sold at
retail in this state, on and after March 1, 2009.
   (b) This section shall remain in effect through and including
December 31, 2011. 
   SEC. 2.    Section 6201.7 is added to the  
Revenue and Taxation Code   , to read:  
   6201.7.  (a) In addition to the taxes imposed by Section 6201 and
any other provision of this part, an excise tax is hereby imposed on
the storage, use, or other consumption in this state of tangible
personal property purchased from any retailer for storage, use, or
other consumption in this state, at the rate of 11/2 percent of the
sales price of the property, on and after March 1, 2009.
   (b) This section shall remain in effect through and including
December 31, 2011. 
   SEC. 3.    Chapter 5.8 (commencing with Section
32231) is added to Part 14 of Division 2 of the   Revenue
and Taxation Code   , to read:  
      CHAPTER 5.8.  ADDITIONAL SURTAX ON BEER, WINE, AND DISTILLED
SPIRITS



      Article 1.  Imposition of the Surtax


   32231.  On and after February 1, 2009, an excise surtax is hereby
imposed upon all beer and wine sold in this state by a manufacturer,
winegrower, or importer, and upon all distilled spirits sold in this
state by a manufacturer, distilled spirits manufacturer's agent,
brandy manufacturer, winegrower, importer, rectifier, wholesaler,
common carrier with respect to distilled spirits sales made upon
boats, trains, and airplanes, or persons licensed to sell distilled
spirits upon boats, trains, and airplanes, and upon sellers of beer,
wine, or distilled spirits with respect to which no tax has been paid
within areas over which the United States government exercises
jurisdiction, at the following rates:
   (a) On all beer, fifty-three cents ($0.53) per gallon and at a
proportionate rate for any other quantity.
   (b) On all still wines containing not more than 14 percent of
absolute alcohol by volume, one dollar and twenty-eight cents ($1.28)
per wine gallon and at a proportionate rate for any other quantity.
   (c) On all still wines containing more than 14 percent of absolute
alcohol by volume, one dollar and twenty-eight cents ($1.28) per
wine gallon and at a proportionate rate for any other quantity.
   (d) On champagne, sparkling wine, excepting sparkling hard cider,
whether naturally or artificially carbonated, one dollar and
twenty-eight cents ($1.28) per wine gallon and at a proportionate
rate for any other quantity.
   (e) On sparkling hard cider, one dollar and twenty-eight cents
($1.28) per wine gallon and at a proportionate rate for any other
quantity.
   (f) On all distilled spirits of proof strength or less, four
dollars and twenty-seven cents ($4.27) per wine gallon and at a
proportionate rate for any other quantity.
   (g) On all distilled spirits in excess of proof strength, four
dollars and twenty-seven cents ($4.27) per wine gallon and at a
proportionate rate for any other quantity.
   32232.  Except with respect to beer and wine in the internal
revenue bonded premises of a manufacturer, and except with respect to
distilled spirits in the possession of a distilled spirits
manufacturer, distilled spirits manufacturer's agent, brandy
manufacturer, rectifier, wholesaler, or common carrier licensed to
sell distilled spirits onboard boats, trains, and airplanes, floor
stock taxes are hereby imposed in amounts equal to the surtaxes
imposed by Section 32231 upon all alcoholic beverages upon which the
surtaxes have not been paid, that are in the possession or under the
control of every person licensed under Division 9 (commencing with
Section 23000) of the Business and Professions Code at 2:01 a.m. on
February 1, 2009. On or before March 15, 2009, each person subject to
the tax imposed by this section shall prepare and file with the
State Board of Equalization, on a form prescribed by the board, a
return showing the amount of units of beer, wine, champagne,
sparkling wine, sparkling hard cider, and distilled spirits possessed
by him or her at 2:01 a.m. on February 1, 2009, that are subject to
the tax imposed by this section, and any other information the board
deems necessary for the proper administration of this chapter. The
taxpayer shall deliver the return, together with a remittance of the
tax due, to the office of the board on or before March 15, 2009.
   32233.  The taxes imposed by this article are in addition to any
other tax imposed under this part.
   32234.  All of the provisions of this part relating to excise
taxes, with the exception of those contained in Chapter 10
(commencing with Section 32501), shall apply to the taxes imposed by
this article, to the extent that those provisions are not
inconsistent with this article.

      Article 2.  Disposition of Proceeds


   32235.  All surtaxes, interest, and penalties imposed and required
to be paid under this chapter shall be made in remittances to the
State Board of Equalization and shall be deposited in the General
Fund.
   32236.  The Board of Equalization shall be reimbursed for
administrative and implementation costs up to 1 percent of the
proceeds collected pursuant to Chapter 5.8 (commencing with Section
32231) of this part. 
   SEC. 4.    Part 21 (commencing with Section 42001) is
added to Division 2 of the   Revenue and Taxation Code
  , to read:  

      PART 21.  OIL SEVERANCE TAX LAW


   42001.  This part shall be known and may be cited as the Oil
Severance Tax Law.
   42002.  For purposes of this part, the following definitions shall
apply:
   (a) "Barrel of oil" means 42 United States gallons of 231 cubic
inches per gallon computed at a temperature of 60 degrees Fahrenheit.

   (b) "Department" means the Department of Conservation.
   (c) "Gross value" means the sale price at the mouth of the well in
the case of oil, including any bonus, premium, or other thing of
value paid for the oil. If there is no sale at the time of severance,
"gross value" means the sale price when the oil is sold, including
any bonus, premium, or other thing of value paid for the oil. If oil
is exchanged for something other than cash, or if the relation
between the buyer and the seller is such that the consideration paid,
if any, is not indicative of the true value or market price, then
the department shall determine the value of the oil subject to the
tax based on the cash price paid to producers for like quality oil in
the vicinity of the well.
   (d) "Oil" means petroleum, or other crude oil, condensate, casing
head gasoline, or other mineral oil that is mined, produced, or
withdrawn from below the surface of the soil or water in this state.
   (e) "Producer" means any person or entity that takes oil from the
earth or water in this state in any manner; any person that owns,
controls, manages, or leases any oil well in the earth or water of
this state; any person that produces or extracts in any manner any
oil by taking it from the earth or water in this state; any person
that acquires the severed oil from a person or agency exempt from
property taxation under the United States Constitution or other laws
of the United States or under the California Constitution or other
laws of the State of California; and any person that owns an
interest, including a royalty interest, in oil or its value, whether
the oil is produced by the person owning the interest or by another
on the person's behalf by lease, contract, or other arrangement.
   (f) "Production" means the total gross amount of oil produced,
including the gross amount attributable to a royalty or other
interest.
   (g) "Severed" or "severing" means the extraction or withdrawing
from below the surface of the earth or water of any oil, regardless
of whether the extraction or withdrawal shall be by natural flow,
mechanical flow, forced flow, pumping, or any other means employed to
get the oil from below the surface of the earth or water, and shall
include the extraction or withdrawal by any means whatsoever of oil
upon which the tax has not been paid, from any surface reservoir,
natural or artificial, or from a water surface.
   (h) "Stripper well" means a well that has been certified by the
department as an oil well incapable of producing an average of more
than 10 barrels of oil per day during the entire taxable month. Once
a well has been certified as a stripper well, that stripper well
shall remain certified as a stripper well until the well produces an
average of more than 10 barrels of oil per day during an entire
taxable month.
   42003.  On and after February 1, 2009, for the privilege of
severing oil from the earth or water in this state for sale,
transport, consumption, storage, profit, or use, a tax is hereby
imposed upon all producers at the rate of 9.9 percent of the gross
value of each barrel of oil severed. The tax shall be applied equally
to all portions of the gross value of each barrel of oil severed.
   42004.  Except as otherwise provided in this part, the tax shall
be upon the entire production in this state, regardless of the place
of sale or to whom sold or by whom used, or the fact that the
delivery may be made to points outside the state.
   42005.  The tax imposed by this part shall be in addition to any
ad valorem taxes imposed by the state, or any of its political
subdivisions, or any local business license taxes that may be
incurred as a privilege of severing oil from the earth or water or
doing business in that locality. There shall be no exemption from
payment of an ad valorem tax related to equipment, material, or
property by reason of the payment of the gross severance tax pursuant
to this part.
   42006.  Two or more producers that are corporations and are owned
or controlled directly or indirectly, as defined in Section 25105, by
the same interests shall be considered as a single producer for
purposes of application of the tax prescribed in this part.
   42007.  (a) There shall be exempted from the imposition of the oil
severance tax imposed pursuant to this part oil produced by a
stripper well in which the average value of oil as of January 1 of
the prior year is less than thirty dollars ($30) per barrel.
   (b) For oil produced in this state from a well that qualifies
under Section 3251 of the Public Resources Code or which has been
inactive for a period of at least the preceding five consecutive
years, the imposition of the oil severance tax shall be reduced to
zero for a period of 10 years.
   42008.  The tax imposed by this part is due and payable to the
department quarterly on or before the last day of the month next
succeeding each calendar quarter.
   42009.  (a) Any person who fails to pay any tax within the time
required shall pay, in addition to the amount of tax owed, plus
interest at the rate of 11/2 percent per month, or fraction thereof,
computed from the delinquent date of the assessment until and
including the date of payment.
   (b) Every payment on a delinquent tax owed pursuant to this part
shall be applied as follows:
   (1) First, to any interest due on the tax.
   (2) Second, to any penalty imposed by this part.
   (3) Third, to the balance, if any, of the tax due.
   42010.  On or before the last day of the month following each
quarterly period of three months, a return for the preceding
quarterly period shall be filed with the department in the form as
the department may prescribe.
   42011.  (a) The department shall deposit all tax revenues,
penalties, and interest collected pursuant to this part in the
General Fund.
   (b) Notwithstanding subdivision (a), the first six million eight
hundred thirteen thousand dollars ($6,813,000) of revenue collected
by the department pursuant to this part in the 2008-09 fiscal year
and any other amount as approved in the final Budget Act for each
fiscal year thereafter, shall be deposited in the Oil, Gas, and
Geothermal Administrative Fund, established pursuant to Section 3110
of the Public Resources Code.
   42012.  The department may prescribe those forms and reporting
requirements as necessary to implement the tax, including, but not
limited to, information regarding the location of the well by county,
the gross amount of oil produced, the quantity sold and the selling
price, the prevailing market price of oil, and the amount of tax due.

   42013.  The department shall administer and collect the tax
imposed by this part pursuant to the Fee Collection Procedures Law
(Part 30 (commencing with Section 55001) of Division 2). For purposes
of this part, the reference in the Fee Collection Procedures Law to
"fee" shall include the tax imposed by this part, to "feepayer" shall
include a person required to pay the oil severance tax, and to
"board" shall mean the Department of Conservation.
   42014.  In addition to the authority granted by Section 55301, the
department may prescribe, adopt, and enforce emergency regulations
relating to the administration and enforcement of this part. Any
emergency regulations prescribed, adopted, or enforced pursuant to
this section shall be adopted in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, and for the purposes of that chapter, including
Section 11349.6 of the Government Code, the adoption of these
regulations is an emergency and shall be considered by the Office of
Administrative Law as necessary for the immediate preservation of the
public peace, health and safety, and general welfare.
Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code, including
subdivision (e) of Section 11346.1 of the Government Code, any
emergency regulations adopted pursuant to this section shall be filed
with, but not be repealed by, the Office of Administrative Law, and
shall remain in effect until revised by the director.
   42015.  If any provision of this part or the application to any
person or circumstances is held invalid, that invalidity shall not
affect other provisions or applications of the part which can be
given effect without the invalid provision or application, and to
this end, the provisions of this part are severable. 
   SEC. 5.    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. 6.    This act addresses the fiscal emergency
declared by the Governor by proclamation on December 1, 2008,
pursuant to subdivision (f) of Section 10 of Article IV of the
California Constitution. 
   SEC. 7.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect. However, the provisions of this act shall become
operative on the dates specified in those provisions.  
  SECTION 1.    It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2008.
 
  SEC. 2.    This act addresses the fiscal emergency
declared by the Governor by proclamation on December 1, 2008,
pursuant to subdivision (f) of Section 10 of Article IV of the
California Constitution.