BILL NUMBER: AB 2592 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 8, 2006
AMENDED IN SENATE JUNE 5, 2006
INTRODUCED BY Assembly Member Leno
FEBRUARY 24, 2006
An act to amend Sections 13995.20, 13995.40, 13995.49,
13995.53, 13995.54, 13995.60, 13995.65, and 13995.77 of
the Government Code, to add Sections 7061 and 19559 to the
Revenue and Taxation Code, and to amend Section 1095 of the
Unemployment Insurance the Government Code,
relating to California tourism.
LEGISLATIVE COUNSEL'S DIGEST
AB 2592, as amended, Leno California Travel and Tourism
Commission.
Existing law, the California Tourism Marketing Act, provides for
the California Travel and Tourism Commission, a nonprofit mutual
benefit corporation, and provides for a 37-member board of the
commission, including 12 members appointed by the Governor and 24
elected members. The 12 appointed members are required to represent
the 12 officially designated tourism regions.
This bill would specify that each appointed member of the
commission shall represent only one of those designated tourism
regions. The bill would also specify that appointed members are not
limited to persons who are employed by or represent assessed
businesses. The bill would provide that elected commissioners shall
serve 4-year terms and that an appointed or elected commissioner
would cease to be a commissioner 90 days following the date on which
he or she ceases to meet the criteria for appointment or election as
a commissioner, except as specified.
Existing law authorizes the commission to accept voluntary
assessments from any person in a travel and tourism related business,
except persons whose primary business is gaming.
This bill would delete that exception.
Existing law authorizes the Secretary of Business, Transportation
and Housing to require assessed businesses, as defined, to maintain
specified books and records, to provide requested information to the
secretary, and to permit the secretary to inspect those books and
records.
This bill would authorize the secretary also to require businesses
that claim to be exempt from assessment to maintain certain records,
to furnish information to the secretary, and to permit the secretary
to inspect those books and records. The bill would also authorize
the Board of Equalization, the Franchise Tax Board, and the
Employment Development Department to permit the use of information by
the secretary for the purpose of identifying persons or businesses
that may owe assessments. The bill would make it a misdemeanor for
persons associated with the Business, Transportation and Housing
Agency and the California Travel and Tourism Commission to disclose
or use the information, except as provided. By creating a new crime
and expanding an existing crime, the bill would impose a
state-mandated local program.
Existing law establishes procedures for imposing assessments on
businesses within various tourism industry categories or segments
by means of referendum called by the Secretary of Business,
Transportation and Housing . Existing law also exempts from
assessment a small business, defined as a business location with less
than $1,000,000 in California gross annual revenue.
This bill would also require the secretary
to identify, if possible and provide an opportunity to vote to,
businesses that would be newly assessed due to a referendum, and
would set forth specified methods by which a business or person
sharing common ownership, management, and control of more than one
assessed business may calculate the assessment. The bill would also
allow the exemption threshold amount to be lowered to not less than
$500,000 by referendum.
Existing law restricts the disclosure of information obtained
pursuant to the act by the Secretary of Business, Transportation and
Housing.
This bill would make that restriction applicable to the Business,
Transportation and Housing Agency.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 13995.20 of the Government Code is amended to
read:
13995.20. Unless the context otherwise requires, the definitions
in this section govern the construction of this chapter.
(a) "Appointed commissioner" means a commissioner appointed by the
Governor pursuant to paragraph (2) of subdivision (b) of Section
13995.40.
(b) "Assessed business" means a person required to pay an
assessment pursuant to this chapter, and until the first assessment
is levied, any person authorized to vote for the initial referendum.
An assessed business shall not include a public entity or a
corporation when a majority of the corporation's board of directors
is appointed by a public official or public entity, or serves on the
corporation's board of directors by virtue of being elected to public
office, or both.
(c) "Commission" means the California Travel and Tourism
Commission.
(d) "Elected commissioner" means a commissioner elected pursuant
to subdivision (d) of Section 13995.40.
(e) "Industry category" means the following classifications within
the tourism industry:
(1) Accommodations.
(2) Restaurants and retail.
(3) Attractions and recreation.
(4) Transportation and travel services.
(f) "Industry segment" means a portion of an industry category.
For example, rental cars are an industry segment of the
transportation and travel services industry category.
(g) "Office" means the Office of Tourism, also popularly referred
to as the Division of Tourism, within the Business, Transportation
and Housing Agency.
(h) "Person" means an individual, public entity, firm,
corporation, association, or any other business unit, whether
operating on a for-profit or nonprofit basis.
(i) "Referendum" means any vote by mailed ballot of measures
recommended by the commission and approved by the secretary pursuant
to Section 13995.60, except for the initial referendum, which shall
consist of measures contained in the selection committee report,
discussed in Section 13995.30.
(j) "Secretary" means the Secretary of Business, Transportation
and Housing.
(k) "Selection Committee" means the Tourism Selection Committee
described in Article 3 (commencing with Section 13995.30).
SEC. 2. Section 13995.40 of the Government Code is amended to
read:
13995.40. (a) Upon approval of the initial referendum, the office
shall establish a nonprofit mutual benefit corporation named the
California Travel and Tourism Commission. The commission shall be
under the direction of a board of commissioners, which shall function
as the board of directors for purposes of the Nonprofit Corporation
Law.
(b) The board of commissioners shall consist of 37 commissioners
comprising the following:
(1) The secretary, who shall serve as chairperson.
(2) (A) Twelve members, who are professionally active in the
tourism industry, and whose primary business, trade, or profession is
directly related to the tourism industry, shall be appointed by the
Governor. Each appointed commissioner shall represent only one of the
12 tourism regions designated by the office, and the appointed
commissioners shall be selected so as to represent, to the greatest
extent possible, the diverse elements of the tourism industry.
Appointed commissioners are not limited to individuals who are
employed by or represent assessed businesses.
(B) If an appointed commissioner ceases to be professionally
active in the tourism industry or his or her primary business, trade,
or profession ceases to be directly related to the tourism industry,
he or she shall automatically cease to be an appointed commissioner
90 days following the date on which he or she ceases to meet both of
the eligibility criteria specified in subparagraph (A), unless the
commissioner becomes eligible again within that 90-day period.
(3) Twenty-four elected commissioners, including at least one
representative of a travel agency or tour operator that is an
assessed business.
(c) The commission established pursuant to Section 15364.52 shall
be inoperative so long as the commission established pursuant to this
section is in existence.
(d) Elected commissioners shall be elected by industry category in
a referendum. Regardless of the number of ballots received for a
referendum, the nominee for each commissioner slot with the most
weighted votes from assessed businesses within that industry category
shall be elected commissioner. In the event that an elected
commissioner resigns, dies, or is removed from office during his or
her term, the commission shall appoint a replacement from the same
industry category that the commissioner in question represented, and
that commissioner shall fill the remaining term of the commissioner
in question. The number of commissioners elected from each industry
category shall be determined by the weighted percentage of
assessments from that category.
(e) The secretary may remove any elected commissioner following a
hearing at which the commissioner is found guilty of abuse of office
or moral turpitude.
(f) (1) The term of each elected commissioner shall commence July
1 of the year next following his or her election, and shall expire on
June 30 of the fourth year following his or her election. If an
elected commissioner ceases to be employed by or with an assessed
business in the category and segment which he or she was
representing, his or her term as an elected commissioner shall
automatically terminate 90 days following the date on which he or she
ceases to be so employed, unless, within that 90-day period, the
commissioner again is employed by or with an assessed business in the
same category and segment.
(2) Terms of elected commissioners that would otherwise expire
effective December 31 of the year during which legislation adding
this subdivision is enacted shall automatically be extended until
June 30 of the following year.
(g) With the exception of the secretary, no commissioner shall
serve for more than two consecutive terms. For purposes of this
subdivision, the phrase "two consecutive terms" shall not include
partial terms.
(h) Except for the original commissioners, all commissioners shall
serve four-year terms. One-half of the commissioners originally
appointed or elected shall serve a two-year term, while the remainder
shall serve a four-year term. Every two years thereafter, one-half
of the commissioners shall be appointed or elected by referendum.
(i) The selection committee shall determine the initial slate of
candidates for elected commissioners. Thereafter the commissioners,
by adopted resolution, shall nominate a slate of candidates, and
shall include any additional candidates complying with the procedure
described in Section 13995.62.
(j) The commissioners shall elect a vice chairperson from the
elected commissioners.
(k) The commission may lease space from the office.
(l) The commission and the office shall be the official state
representatives of California tourism.
(m) All commission meetings shall be held in California.
(n) No person shall receive compensation for serving as a
commissioner, but each commissioner shall receive reimbursement for
reasonable expenses incurred while on authorized commission business.
(o) Assessed businesses shall vote only for commissioners
representing their industry category.
(p) Commissioners shall comply with the requirements of the
Political Reform Act of 1974 (Title 9 (commencing with Section
81000)). The Legislature finds and declares that commissioners
appointed or elected on the basis of membership in a particular
tourism segment are appointed or elected to represent and serve the
economic interests of those tourism segments and that the economic
interests of these members are the same as those of the public
generally.
(q) Commission meetings shall be subject to the requirements of
the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section
11120) of Chapter 1 of Part 1).
(r) The executive director of the commission shall serve as
secretary to the commission, a nonvoting position, and shall keep the
minutes and records of all commission meetings.
SEC. 3. Section 13995.49 of the Government Code is amended to
read:
13995.49. The commission may by written contract accept a
voluntary assessment from any person in a travel and tourism related
business who is not an assessed business. The contract shall apply
solely to the person in question and not to any other person in a
travel and tourism related business that is not an assessed business.
The contract shall provide that the voluntary assessment be
proportionately equivalent to the assessment that would be levied if
the person were an assessed business under this chapter, shall permit
that business to vote on any referendum conducted under this chapter
as if that person were an assessed business, and shall have a term
concurrent with the effective period of any referendum on which the
person votes. Individual voluntary assessments under this section
shall be enforceable only under the terms of the respective contracts
to which they pertain. This section shall not be construed to
preclude donations to, or cooperative marketing activities of any
kind with, the commission on the part of any person.
SEC. 4. Section 13995.53 of the Government Code
is amended to read:
13995.53. (a) The secretary may require all assessed businesses
to maintain books and records that reflect their income or sales as
reflected in the assessment, and to furnish the secretary with any
information that may, from time-to-time, be requested by the
secretary, and to permit the inspection by the secretary of portions
of books and records that relate to the amount of assessment.
(b) The secretary may also require any business that claims to be
exempt from assessment pursuant to this chapter to maintain books and
records that reflect its income and sales, as well as its percentage
of income and sales that are tourism related, and to furnish the
secretary with any information that may, from time to time, be
requested by the secretary, and to permit the inspection by the
secretary of portions of its books and records that pertain to
whether the business is subject to assessment pursuant to this
chapter and, if so, the amount of any assessments owing.
SEC. 5. Section 13995.54 of the Government Code
is amended to read:
13995.54. All information pertaining to assessed businesses
obtained by the secretary or the Business, Transportation, and
Housing Agency pursuant to this chapter is confidential and shall not
be subject to discovery, is exempt from the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1), and shall not be disclosed except to any attorney hired
by the secretary who is employed to give legal advice upon it or by
court order.
SEC. 6. SEC. 4. Section 13995.60 of
the Government Code is amended to read:
13995.60. (a) As used in this article and Article 7 (commencing
with Section 13995.65), "assessment level" means the estimated gross
dollar amount received by assessment from all assessed businesses on
an annual basis, and "assessment formula" means the allocation method
used within each industry segment (for example, percentage of gross
revenue).
(b) Commencing on January 1, 2003, a referendum shall be called
every two years, and the commission, by adopted resolution, shall
determine the slate of individuals who will run for commissioner. The
resolution shall also cover, but not be limited to, the proposed
assessment level, based upon specified assessment formulae, together
with necessary information to enable each assessed business to
determine what its individual assessment would be. Commencing with
the referendum held in 2007 and every six years thereafter, the
resolution shall also cover the termination or continuation of the
commission. The resolution may also include an amended industry
segment allocation formula and the percentage allocation of
assessments between industry categories and segments. The commission
may specify in the resolution that a special, lower assessment rate
that was set pursuant to subdivision (c) of Section 13995.30 for a
particular business will no longer apply due to changes in the unique
circumstance that originally justified the lower rate. The
resolution may include up to three possible assessment levels, from
which the assessed businesses will select one assessment level by
plurality weighted vote.
(c) The commission shall deliver to the secretary the resolution
described in subdivision (b). The secretary shall call a referendum
containing the information required by subdivision (b) plus any
additional matters complying with the procedures of subdivision (b)
of Section 13995.62.
(d) When the secretary calls a referendum, all assessed businesses
shall be sent a ballot for the referendum. Every ballot that the
secretary receives by the ballot deadline shall be counted, utilizing
the weighted formula adopted initially by the selection committee,
and subsequently amended by referendum.
(e) If the referendum includes more than one possible assessment
rate, the rate with the plurality of weighted votes shall be adopted.
(f) Notwithstanding any other provision of this section, if the
commission delivers to the secretary a resolution pertaining to any
matter described in subdivision (b), the secretary shall call a
referendum at a time or times other than as specified in this
section. Each referendum shall contain only those matters contained
in the resolution.
(g) Notwithstanding any other provision of this section, the
secretary shall identify, to the extent reasonably feasible, those
businesses that would become newly assessed due to a change in
category, segment, threshold, or exemption status sought via
referendum, and provide those businesses the opportunity to vote in
that referendum.
SEC. 7. SEC. 5. Section 13995.65 of
the Government Code is amended to read:
13995.65. (a) Each industry category shall establish a committee
to determine the following within its industry category: industry
segments, assessment formula for each industry segment, and any types
of business exempt from assessment. The initial segment committees
shall consist of the subcommittee for that category as described in
subdivision (d) of Section 13995.30. Following approval of the
assessment by referendum, the committees shall be selected by the
commission, based upon recommendations from the tourism industry.
Committee members need not be commission members.
(b) The committee recommendations shall be presented to the
commission or selection committee, as applicable. The selection
committee may adopt a resolution specifying some or all of the items
listed in subdivision (a), plus an allocation of the overall
assessment among industry categories. The commission may adopt a
resolution specifying one or more of the items listed in subdivision
(a), plus an allocation of the proposed assessment. The selection
committee and commission are not required to adopt the findings of
any committee.
(c) The initial industry category and industry segment allocations
shall be included in the selection committee report required by
subdivision (b) of Section 13995.30. Changes to the industry segment
allocation formula may be recommended to the commission by a segment
committee at the biennial commission meeting scheduled to approve the
referendum resolution pursuant to Section 13995.60. At the same
meeting, the commission may amend the percentage allocations among
industry categories. Any item discussed in this section that is
approved by resolution of the commission, except amendments to the
percentage allocations among industry categories, shall be placed on
the next referendum, and adopted if approved by the majority of
weighted votes cast.
(d) Upon approval by referendum, the office shall mail an
assessment bill to each assessed business. The secretary shall
determine how often assessments are collected, based upon available
staffing resources. The secretary may stagger the assessment
collection throughout the year, and charge businesses a prorated
amount of assessment because of the staggered assessment period. The
secretary and office shall not divulge the amount of assessment or
weighted votes of any assessed businesses, except as part of an
assessment action.
(e) An assessed business may appeal an assessment to the secretary
based upon the fact that the business does not meet the definition
established for an assessed business within its industry segment or
that the level of assessment is incorrect. An appeal brought under
this subdivision shall be supported by substantial evidence submitted
under penalty of perjury by affidavit or declaration as provided in
Section 2015.5 of the Code of Civil Procedure. If the error is based
upon failure of the business to provide the required information in a
timely manner, the secretary may impose a fee for reasonable costs
incurred by the secretary in correcting the assessment against the
business as a condition of correcting the assessment.
(f) Notwithstanding any other provision of law, an assessed
business may pass on some or all of the assessment to customers. An
assessed business that is passing on the assessment may, but shall
not be required to, separately identify or itemize the assessment on
any document provided to a customer. Assessments levied pursuant to
this chapter and passed on to customers are not part of gross
receipts or gross revenue for any purpose, including the calculation
of sales or use tax and income pursuant to any lease. However,
assessments that are passed on to customers shall be included in
gross receipts for purposes of income and franchise taxes.
(g) For purposes of calculating the assessment for a business with
revenue in more than one industry category or industry segment, that
business may elect to be assessed based on either of the following:
(1) The assessment methodology and rate of assessment applicable
to each category or segment, respectively, as it relates to the
revenue that it derives from that category or segment.
(2) With respect to its total revenue from all industry categories
or segments, the assessment methodology and rate of assessment
applicable to the revenue in the category and segment in which it
earns the most gross revenue.
(h) (1) A person sharing common ownership, management, or control
of more than one assessed business may elect to calculate,
administer, and pay the assessment owed by each business by any of
the following methods:
(A) Calculated on the basis of each individual business location.
(B) Calculated on the basis of each business, or each group of
businesses, possessing a single federal employer identification
number, regardless of the number of locations involved.
(C) Calculated on the basis of the average aggregate percentage of
tourism-related gross revenue received by all of the person's
businesses in a particular industry segment or industry category
during the period in question, multiplied by the total aggregate
tourism-related gross revenue received by all of the businesses, and
then multiplied by the appropriate assessment formula. For example,
if a person sharing common ownership, management, or control of more
than one assessed business in the retail industry segment calculates
that the average percentage of tourism-related gross revenue received
by all of its locations equals 6 percent during the period in
question, that person may multiply all of the gross revenue received
from all of those locations by 6 percent, and then multiply that
product by the applicable assessment formula.
(D) Calculated on any other basis authorized by the secretary.
(2) Except as the secretary may otherwise authorize, the methods
in subparagraphs (B), (C), or (D) shall not be used if the aggregate
assessments paid would be less than the total assessment revenues
that would be paid if the method in subparagraph (A) were used.
SEC. 8. SEC. 6. Section 13995.77 of
the Government Code is amended to read:
13995.77. A business is exempt from the assessments provided for
in this chapter if any of the following apply:
(a) The business is a travel agency or tour operator that derives
less than 20 percent of its gross revenue annually from travel and
tourism occurring within the state. A travel agency or tour operator
that qualifies for this exemption may participate as an assessed
business by paying an assessment calculated on the same basis
applicable to other travel agencies or tour operators, respectively,
and by filing a written request with the secretary indicating its
desire to be categorized as an assessed business.
(b) The business is a small business. For purposes of this
section, "small business" means a business location with less than
one million dollars ($1,000,000) in total California gross annual
revenue from all sources. This threshold amount may be lowered, but
never to less than five hundred thousand dollars ($500,000), by means
of a referendum conducted pursuant to Section 13995.60; however, the
secretary may elect to forgo assessing a business for which the
expense incurred in collecting the assessment is not commensurate
with the assessment that would be collected.
(c) The assessments provided for in this chapter shall not apply
to the revenue of regular route intrastate and interstate bus
service: provided, however, that this subdivision shall not be deemed
to exclude any revenue derived from bus service that is of a type
that requires authority, whether in the form of a certificate of
public convenience and necessity, or a permit, to operate as a
charter-party carrier of passengers pursuant to Chapter 8 (commencing
with Section 5351) of Division 2 of the Public Utilities Code.
(d) Any business exempted pursuant to this section may enter into
a contract for voluntary assessments pursuant to Section 13995.49.
All matter omitted in this version of the bill appears in the bill
as amended in the Senate, June 5, 2006 (JR11)