BILL NUMBER: SB 963	CHAPTERED  09/01/99

	CHAPTER   289
	FILED WITH SECRETARY OF STATE   SEPTEMBER 1, 1999
	APPROVED BY GOVERNOR   AUGUST 31, 1999
	PASSED THE ASSEMBLY   AUGUST 19, 1999
	PASSED THE SENATE   MAY 25, 1999
	AMENDED IN SENATE   APRIL 13, 1999

INTRODUCED BY   Senator Monteith
   (Coauthors:  Senators Haynes and Morrow)
   (Coauthors:  Assembly Members Aanestad, Battin, Leach, Oller, and
Robert Pacheco)

                        FEBRUARY 26, 1999

   An act to amend Section 6358 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 963, Monteith.  Sales and use taxes:  exemptions:   drugs or
medicines.
   The Sales and Use Tax Law imposes a tax on the gross receipts from
the sale in this state of, or the storage, use, or other consumption
in this state of, tangible personal property.  That law provides
various exemptions from that tax, including an exemption for drugs or
medicines, the primary purpose of which is the prevention or control
of disease, that are administered to animal life the products of
which ordinarily constitute food for human consumption.
   This bill would additionally exempt as drugs or medicines oxygen
that is administered to animal life the products of which ordinarily
constitute food for human consumption.
   Counties and cities are authorized to impose local sales and use
taxes in conformity with state sales and use taxes.  Exemptions from
state sales and use taxes enacted by the Legislature are incorporated
into the local taxes.
   Section 2230 of the Revenue and Taxation Code provides that the
state will reimburse counties and cities for revenue losses caused by
the enactment of sales and use tax exemptions.
   This bill would provide that, notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for sales and use tax revenues
lost by them pursuant to this bill.
  This bill would take effect immediately as a tax levy, but its
operative date would depend on its effective date.


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


  SECTION 1.  Section 6358 of the Revenue and Taxation Code is
amended to read:
   6358.  There are exempted from the taxes imposed by this part, the
gross receipts from the sale in this state of, and the storage, use,
or other consumption in this state of:
   (a) Any form of animal life the products of which ordinarily
constitute food for human consumption.
   (b) Feed for any form of animal life the products of which
ordinarily constitute food for human consumption or are to be sold in
the regular course of business.
   (c) Seeds and plants the products of which ordinarily constitute
food for human consumption or are to be sold in the regular course of
business.
   (d) Fertilizer to be applied to land the products of which are to
be used as food for human consumption or are to be sold in the
regular course of business.
   (e) On or after January 1, 1997, drugs or medicines, including
oxygen, the primary purpose of which is the prevention or control of
disease, that are administered to animal life the products of which
ordinarily constitute food for human consumption.
  SEC. 2.  Notwithstanding Section 2230 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any sales and use tax revenues lost by
it under this act.
  SEC. 3.  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 90 days
after the effective date of this act.