BILL NUMBER: AB 2518	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 28, 2016

INTRODUCED BY   Assembly Member Gomez

                        FEBRUARY 19, 2016

   An act to add  and repeal  Section 6356.9  to
  of  the Revenue and Taxation Code, relating to
taxation, to take effect immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2518, as amended, Gomez. Sales and use taxes: exemption:
nonprofit corporation: building and construction supplies.
   Existing sales and use tax laws impose taxes on retailers measured
by the gross receipts from the sale of tangible personal property
sold at retail in this state, or on the storage, use, or other
consumption in this state of tangible personal property purchased
from a retailer for storage, use, or other consumption in this state,
and provides various exemptions from the taxes imposed by those
laws.
   This  bill   bill, for a period of five years
after the operative date of this bill,  would partially exempt
from those taxes the gross receipts from the sale of, and the
 storage and use of,   storage, use,  or
other consumption in this state of, building and construction
supplies, materials, equipment, and machinery, and the parts thereof,
that are purchased for a specified use by a nonprofit corporation,
as provided. The bill would make the purchaser liable for the payment
of sales tax if the building and construction supplies, materials,
equipment, and machinery, and the parts thereof, are removed,
converted, or used in a manner not qualifying for the exemption.
   The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes
counties and cities to impose local sales and use taxes in conformity
with the Sales and Use Tax Law, and existing law authorizes
districts, as specified, to impose transactions and use taxes in
accordance with the Transactions and Use Tax Law, which conforms
generally to the Sales and Use Tax Law. Exemptions from state sales
and use taxes are incorporated into these laws.
   This bill would specify that this exemption does not apply to
local sales and use taxes and transactions and use taxes and
specified state sales and use taxes the proceeds of which are
deposited into the Local Revenue Fund, the Local Revenue Fund 2011,
the Local Public Safety Fund, and the Education Protection Account.

   This bill would take effect immediately as a tax levy, but its
operative date would depend on its effective date.  
   This act provides for a tax levy within the meaning of Article IV
of the Constitution and shall go into immediate effect. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 6356.9 is added to the Revenue and Taxation
Code, to read:
   6356.9.  (a) There are exempted from the taxes imposed by this
part the gross receipts from the sale of, and the  storage
and use of,   storage, use,  or other consumption
in this state of, building and construction supplies, materials,
equipment, and machinery, and the parts thereof, that are purchased
for use by a nonprofit corporation that is exempt from federal income
taxation as an organization described in Section 501(c)(3) of the
Internal Revenue Code that has received a welfare exemption under
Section 214.15, for construction  and rehabilitation  of
properties  in this state  that are intended to be sold and
are sold to  low-income families.   persons and
families of low income. 
   (b) (1) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with
Section 7251)), the exemption established by this section does not
apply with respect to any tax levied by a county, city, or district
pursuant to, or in accordance with, either of those laws.
   (2) Notwithstanding subdivision (a), the exemption established by
this section shall not apply with respect to any tax levied pursuant
to Section 6051.2 or 6201.2, Section 35 and subdivision (f) of
Section 36 of Article XIII of the California Constitution, or any tax
levied pursuant to Section 6051 or 6201 that is deposited in the
State Treasury to the credit of the Local Revenue Fund 2011 pursuant
to Section 6051.15 or 6201.15.
   (c) If a purchaser certifies in writing to the seller that the
building and construction supplies, materials, equipment, and
machinery, and the parts thereof, purchased without payment of the
tax will be used in a manner entitling the seller to regard the gross
receipts from the sale as exempt from the sales tax, and within one
year from the date of purchase, the purchaser (1) removes the
building and construction supplies, materials, equipment, and
machinery, and the parts thereof, outside California, (2) converts
the building and construction supplies, materials, equipment, and
machinery, and the parts thereof, for use in a manner not qualifying
for the exemption, or (3) uses that building and construction
supplies, materials, equipment, and machinery, and the parts thereof,
in a manner not qualifying for the exemption, the purchaser shall be
liable for payment of sales tax, with applicable interest, as if the
purchaser were a retailer making a retail sale of the building and
construction supplies, materials, equipment, and machinery, and the
parts thereof, at the time the building and construction supplies,
materials, equipment, and machinery, and the parts thereof, are so
removed, converted, or used, and the cost of the building and
construction supplies, materials, equipment, and machinery, and the
parts thereof, to the purchaser shall be deemed the gross receipts
from that retail sale. 
   (d) For purposes of this section, "persons and families of low
income" has the same meaning as that term is defined in Section 50093
of the Health and Safety Code.  
   (e) This section shall become inoperative five years after the
operative date of this section and as of that date is repealed. 

  SEC. 2.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect. 
   SEC. 2.    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 first day of the first calendar quarter commencing
more than 180 days after the effective date of this act.