BILL NUMBER: AB 2533	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 16, 2006
	PASSED THE ASSEMBLY  MAY 4, 2006
	AMENDED IN ASSEMBLY  APRIL 17, 2006

INTRODUCED BY   Assembly Member Leno

                        FEBRUARY 23, 2006

   An act to amend Section 6365 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2533, Leno  Sales and use taxes: exemption: public art.
  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.
   Existing law provides various exemptions from that tax, including
an exemption for original works of art purchased to become part of a
permanent collection, as specified, items which have value as museum
pieces, as specified, and certain purchases of public art by the
state or any local government entity for display to the public in
public places, as specified.
   This bill would expand the exemption for original works of art to
include those leased from one nonprofit organization to another
nonprofit organization for 35 years or more. This bill would also
expand the exemption to include public art that is leased by the
state or any local government from another entity for display in
public places. This bill would also expand the definition of work of
art to include a costume, dress, clothing, or personal adornment.
This bill would also clarify that a permanent collection, as it
applies to leases of original works of art, means a collection with a
lease term of 35 years or more.
   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 6365 of the Revenue and Taxation Code is
amended to read:
   6365.  (a) There are exempted from the taxes imposed by this part
the gross receipts from the sale of, and the storage, use or other
consumption in this state of, original works of art, which are:
   (1) Purchased by this state or any city, county, city and county,
or other local governmental entity;
   (2) Purchased by any nonprofit organization operating any public
museum for, and pursuant to contract with, any such governmental
entity;
   (3) Purchased by any nonprofit organization which has qualified
for exemption pursuant to Section 23701d for one or more museums
regularly open to the public not less than 20 hours per week for not
less than 35 weeks of the calendar year and operated by the purchaser
of such art or operated by another nonprofit organization which has
qualified for exemption pursuant to Section 23701d;
   (4) Purchased for donation and actually donated by delivery by the
retailer pursuant to the instructions of the buyer to any such
governmental entity, or nonprofit organization, and evidenced by a
written transfer of title from the buyer to such governmental entity
or nonprofitorganization; or
   (5) Leased from one nonprofit organization to another nonprofit
organization for 35 years or more, if both the lessor and lessee are
nonprofit organizations as defined in either paragraph (2) or (3).
   (b) The exemption provided by this section shall apply only to
works of art purchased to become part of the permanent collection of
any of the following:
   (1) A museum.
   (2) A nonprofit corporation which has qualified for exemption
pursuant to Section 23701d; regularly loans not less than 85 percent
of the value of its collection of works of art to one or more
museums; and is required by its articles of incorporation to loan its
works of art and is otherwise prohibited by its articles from making
any private use of its works of art; provided, that the work of art
for which the exemption is claimed pursuant to this section shall
actually be placed on display at one or more museums in California
for not less than 24 months during the three-year period commencing
from the date of purchase.
   (3) Any city, county, city and county, or other local governmental
entity and this state which purchases, commissions, or leases from
any such governmental entity public art for display to the public in
buildings, parks, plazas, or other public places. These areas shall
be open to the public not less than 20 hours per week for not less
than 35 weeks of the calendar year.
   (c) For purposes of this section, "work of art" means a work of
visual art, including, but not limited to, a drawing, painting,
mural, fresco, sculpture, mosaic, film, or photograph, a work of
calligraphy, a work of graphic art (including, but not limited to, an
etching, lithograph, offset print, silk screen, or a work of graphic
art of like nature), crafts (including, but not limited to, crafts
in clay, textile, fiber, wood, metal, plastic, glass, costume, dress,
clothing, personal adornment, and like materials), or mixed media
(including, but not limited to, a collage, assemblage, or any
combination of the foregoing art media).
   (d) For purposes of this section, a "museum" shall only include:
   (1) A museum which has a significant portion of its space open to
the public without charge;
   (2) A museum open to the public without charge for not less than
six hours during any month the museum is open to the public; or
   (3) A museum which is open to a segment of the student or adult
population without charge.
   (e) For the purposes of this section, "permanent collection" as it
applies to leases of original works of art, means a collection with
a lease term of 35 years or more.
   (f) Any public entity or nonprofit organization claiming an
exemption pursuant to this section shall maintain records, in such
forms as prescribed by the board, sufficient to substantiate its
claim. Such records shall include, but not be limited to, the date of
purchase, the purchase price, the date the property was first
brought into this state, and the dates and locations the work of art
was on display at a museum.
  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.