BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 898|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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UNFINISHED BUSINESS
Bill No: SB 898
Author: Nguyen (R), et al.
Amended: 6/27/16
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/20/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SENATE FLOOR: 39-0, 6/2/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,
Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR: 70-5, 8/18/16 - See last page for vote
SUBJECT: Sales and use taxes: exemption: animal blood
SOURCE: Author
DIGEST: This bill enacts a sales and use tax (SUT) exemption
for the sale of animal blood sold by a nonprofit animal blood
bank.
Assembly Amendments (1) remove the bill's requirement for the
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Board of Equalization (BOE) to cancel any current notice of
determination as well as any related penalties and interest, and
prohibition against BOE issuing a new notice of determination,
(2) provide a definition for "nonprofit," and (3) sunset the
bill's exemption on January 1, 2022.
ANALYSIS:
Existing law:
1)Imposes a SUT on the sale, storage, or use of tangible
personal property unless exempted by state law.
2)Exempts human whole blood, plasma, blood products, and blood
derivatives, or any human body parts held in a bank for
medical purposes, from SUT.
This bill:
1)Provides a SUT exemption for the sale of animal blood, plasma,
blood products, and blood derivatives, sold by nonprofit
animal blood banks for use in the cure, mitigation, treatment,
or prevention of injury or disease in animals.
2)Defines "nonprofit" as an organization qualified under Section
501(c)(3) of the Internal Revenue Code.
3)Sunsets on January 1, 2022.
Background
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According to the California Department of Food and Agriculture,
only two animal blood banks in California 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, SB 898
results in annual state and local revenue loss of approximately
$80,000, including $38,400 General Fund.
SUPPORT: (Verified8/18/16)
ACVS Veterinary Surgeon
American Emergency Clinic
American Holistic Veterinary Medical Association
American Holistic Veterinary Medical Foundation
Animal Urgent Care
California Veterinary Medical Association
Center for Integrative Animal Medicine
Eye Care for Animals
George Runner, Board of Equalization Member
Hemopet
Humane Society Veterinary Medicine Association
Holistic Veterinary Care
Meridian Veterinary Care
SAGE Centers for Veterinary Specialty and Emergency Care
VCA Emergency Animal Hospital and Referral Center
OPPOSITION: (Verified8/18/16)
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Animal Blood Bank
California State Association of Counties
League of California Cities
ARGUMENTS IN SUPPORT: According to the author, "SB 898
amends the California Revenue and Taxation code to clarify that
the sale and use of animal blood, blood products, and
derivatives by a licensed animal blood bank are not subject to
tax. Since one of the two animal blood bank organizations
provides an integral portion of the California's animal donor
blood, the need to ensure the protection of this vital service
is necessary and appropriate. Furthermore a similar tax
exemption exists in the California tax code for human blood
banks, a logical application of this exemption should extend
towards animals as well."
ARGUMENTS IN OPPOSITION: The League of California Cities and
the California State Association of Counties argue that sales
and use tax exemptions continue to erode the already shrinking
local sales tax base. Cities and counties continue to struggle
financially, and sales and use tax exemptions only further
exacerbate the issue. Animal Blood Bank opposes the measure's
limited application to nonprofits, arguing that these limits
preclude many smaller veterinary facilities, or any facility
serving cats, from the measure's benefits.
ASSEMBLY FLOOR: 70-5, 8/18/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonta, Brough, Brown, Burke, Calderon, Campos,
Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh,
Dahle, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove,
Harper, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,
Medina, Melendez, Mullin, Nazarian, O'Donnell, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Williams, Wood,
Rendon
NOES: Gallagher, Hadley, Levine, Obernolte, Wilk
NO VOTE RECORDED: Bonilla, Beth Gaines, Roger Hernández, Olsen,
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Patterson
Prepared by:Myriam Bouaziz & Colin Grinnell / GOV. & F. / (916)
651-4119
8/19/16 19:21:52
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