BILL NUMBER: SB 681 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 31, 2015
AMENDED IN SENATE JULY 16, 2015
AMENDED IN SENATE JUNE 29, 2015
AMENDED IN SENATE JUNE 3, 2015
AMENDED IN SENATE MAY 5, 2015
INTRODUCED BY Senator Hill
(Principal coauthor: Assembly Member Mullin)
FEBRUARY 27, 2015
An act to add Section 24446 to the Revenue and Taxation Code,
relating to income taxation, and declaring the urgency thereof, to
take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 681, as amended, Hill. Corporation taxes: deduction:
public utilities. gas corporations.
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 For the taxable year beginning on
January 1, 2015, this bill would not allow a deduction under
the Corporation Tax Law for expenses or expenditures by
Pacific Gas and Electric Company a gas corporation
that the Public Utilities Commission identified in a
specific decision relative to the operation of its natural gas
transmission system pipelines. decision to penalize
the gas corporation for a natural gas safety violation. For any
taxable year for which those expenses or expenditures are paid or
incurred, the bill would require Pacific Gas and Electric
Company a gas corporation to provide with the
return a certification, under penalty of perjury, that none of those
expenses or expenditures were taken into account, directly or
indirectly, in determining the amount of income of the
company, gas corporation, or any other related
taxpayer, that is subject to tax under the Corporation Tax Law, for
that taxable year. By expanding the scope of the crime of perjury,
this bill 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 declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares both
of the following:
(a) A fine or similar penalty paid at the direction of the
government, where the government has determined the fine or similar
penalty to be punitive, is not an ordinary and necessary business
expense and, therefore, no deduction shall be allowed for any fine or
similar penalty paid at the direction of the government for the
violation of any law.
(b) Subdivision (a) does not constitute a change in, but is
declaratory of, existing law.
SECTION 1. SEC. 2. Section 24446 is
added to the Revenue and Taxation Code, to read:
24446. (a) No For the taxable year
beginning January 1, 2015, no deduction shall be allowed for
any amount paid or incurred by Pacific Gas and Electric
Company a gas corporation, as defined in Section 222
of the Public Utilities Code, for expenses or expenditures
identified by the Public Utilities Commission in Decision
15-04-024 (April 9, 2015), "Decision on Fines and Remedies to be
Imposed on Pacific Gas and Electric Company for Specific Violations
in Connection with the Operation and Practices of its Natural Gas
Transmission System Pipelines," relating to a decision
to penalize the gas corporation for a natural gas safety violation,
including any of the following:
(1) Up to eight hundred fifty million dollars
($850,000,000) in future Future gas
infrastructure improvements related to transmission pipeline safety
to be paid for by Pacific Gas and Electric Company
shareholders. shareholders of the gas corporation.
(2) Four hundred million dollars ($400,000,000) in bill
Bill credits for the gas ratepayers of
Pacific Gas and Electric Company. the gas corporation.
(3) Approximately fifty million dollars ($50,000,000) to
implement 75 remedies, including, but not limited to,
Th e implementation of pipeline safety remedies and
reimbursement of the Public Utilities Commission for its costs
incurred in investigating and enforcing violations of law relating to
the public safety by Pacific Gas and Electric Company.
the gas corporation.
(b) For any taxable year for which expenses or expenditures
identified in subdivision (a) are paid or incurred, Pacific
Gas and Electric Company the gas corporation
shall provide with the return, for that taxable year, a
certification, under penalty of perjury, that none of those expenses
or expenditures were taken into account, directly or indirectly, in
determining the amount of income of Pacific Gas and Electric
Company, the gas corporation, or any other
related taxpayer, that is subject to tax under this part, for that
taxable year.
SEC. 2. SEC. 3. 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. 3. SEC. 4. 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 for the provisions of this act to be applicable to the
current tax year and to better ensure the effectiveness of decisions
of the Public Utilities Commission protecting the public safety, it
is necessary that this act take effect immediately.