SB 681, as amended, Hill. Corporation taxes: deduction: public utilities.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations.
The Corporation Tax Law allows various deductions in computing the income that is subject to the taxes imposed by those laws, and in modified conformity with federal law, allows a deduction for ordinary and necessary expenses carrying on a trade or business. Existing law provides that no deduction is allowed for any fine or similar penalty paid to a government for the violation of any law.
This bill would not allow a deduction under the Corporation Tax Law for expenses or expenditures
begin delete for plant and equipmentend delete by Pacific Gas and Electric Company that the Public Utilities Commission begin delete determined in
a specific decision should be borne by the shareholders of the utility, and not the utility’s ratepayers, because of the utility’s numerous violations of law relating to the public safety. The bill would additionally not allow a deduction for amounts that the Public Utilities Commission ordered Pacific Gas and Electric Company to pay to reimburse the commission for its costs incurred in investigating and enforcing violations of law by the utility relating to public safety.end delete
This bill would declare that it is to take effect immediately as an urgency statute.
Fiscal committee: yes.
State-mandated local program:
begin deleteno end delete.
The people of the State of California do enact as follows:
Section 24446 is added to the Revenue and
37Taxation Code, to read:
Section 162(a) of the Internal Revenue Code, relating
39to trade or business expenses, in general, shall not apply to the
P4 1(a) Expenses or expenditures for plant and equipment by Pacific
2Gas and Electric Company that the Public Utilities Commission
3determined in Decision 15-04-024 (April 9, 2015), “Decision on
4Fines and Remedies to be Imposed on Pacific Gas and Electric
5Company for Specific Violations in Connection with the Operation
6and Practices of its Natural Gas Transmission System Pipelines,”
7should be borne by the shareholders of the utility, and not the
8utility’s ratepayers, because of the utility’s numerous violations
9of law relating to public safety.
10(b) Amounts that the Public
Utilities Commission, in Decision
1115-04-024, ordered Pacific Gas and Electric Company to pay to
12reimburse the commission for its costs incurred in investigating
13and enforcing a violation of law relating to public safety by the
This act is an urgency statute necessary for the
16immediate preservation of the public peace, health, or safety within
17the meaning of Article IV of the Constitution and shall go into
18immediate effect. The facts constituting the necessity are:
19In order for the provisions of this act to be applicable to the
20current tax year and to better ensure the effectiveness of decisions
21of the Public Utilities Commission protecting the public safety, it
22is necessary that this act take effect immediately.