BILL ANALYSIS Ó
SB 898
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 898
(Nguyen) - As Amended June 27, 2016
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|Policy |Revenue and Taxation |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill creates a sales and use tax (SUT) exemption for animal
whole blood, plasma, blood products, and blood derivatives, sold
by a nonprofit animal blood banking business for use in the
cure, mitigation, treatment, or prevention of injury or disease
in animals. The provisions of this bill will be repealed on
January 1, 2022.
FISCAL EFFECT:
Annual state and local revenue loss of approximately $80,000,
SB 898
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including $38,400 GF.
COMMENTS:
1)Purpose. According to the author, SB 898 extends the tax
treatment of human blood sold and used by human blood banks,
such as the American Red Cross, to animal blood banks.
Specifically, this bill exempts animal blood and blood
products and derivatives sold by a licensed nonprofit animal
blood bank when those products are sold for use in medical
treatment.
2)Animal blood banks. According to the California Department of
Food and Agriculture (CDFA), only two animal blood banks in
California, one of which is a nonprofit, hold licenses to
produce, market, and sell animal blood and blood products.
These facilities provide whole blood, plasma, platelets, and
clotting factors to veterinary hospitals and clinics. The
blood used to make these products is collected from an animal
"blood donor" housed permanently or semi-permanently at the
blood bank. California law does not allow pet owners to
volunteer their animals as donors to commercial blood banks.
3)Equity for animals in the tax code. SB 898 is not the first
piece of legislation that aims to extend certain tax code
benefits to goods and services that benefit animals. SB 688
(Galgiani) of 2013 would have established a SUT exemption for
certain animal-related drugs and medicine used for the
treatment of animals and furnished by a veterinarian, a city
or other local government entity, or a nonprofit welfare or
rescue organization. That bill was held in the Senate
Committee on Appropriations suspense file.
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4)Policy committee amendments. SB 898 was amended in the
Assembly Committee on Revenue and Taxation to include a sunset
date and to remove the provision that required the Board of
Equalization (BOE) to cancel any notice of determination and
any related penalties and interest. These amendments helped
address lingering policy concerns about setting a precedent
that would allow a taxpayer to escape from paying penalties
and fines related to existing tax liability.
5)Opposition. The California State Association of Counties
opposes this bill.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081