BILL NUMBER: AB 832	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Ammiano

                        FEBRUARY 17, 2011

   An act to  amend Section 995 of   add Section
995.3 to  the Revenue and Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 832, as amended, Ammiano. Property taxation: storage media for
computer programs.
   Existing law requires storage media for computer programs to be
valued on the 1972 lien date and thereafter as if there were no
computer program on the media except basic operational programs, and
otherwise prohibits the valuation of computer programs for the
purpose of property taxation.  Existing law defines basic
operational programs to mean, for purposes of the taxation of storage
media for computer programs, a computer program that is fundamental
and necessary to the functioning of a computer, and that is a part of
an operating system that consists of the control program elements of
that system. Existing regulations of the State Board of Equalization
provide that a program is included in the sale or lease price of
computer equipment if, among other things, the equipment and the
program are sold or leased at a single price, and authorizes the
county assessor, in valuing computer   equipment that is
sold or leased at a single price, lacking evidence to the contrary,
to regard the total amount charged as indicative of the value of
taxable tangible property. Existing regulations require a person
claiming that a single price sale or lease includes charges for
nontaxable programs, to identify the nontaxable programs and supply
specified information to enable the county assessor to make an
informed judgment concerning the proper value to be ascribed to
taxable and nontaxable programs. 
   This bill  generally  would  make technical,
nonsubstantive changes to this provision   codify a
portion of a regulation of the State Board of Equalization, and also
would   require   a person claiming that a single
price sale or lease includes charges for nontaxable programs and
services to prove, by clear and convincing evidence, the existence of
nontaxable programs and services and the sales price, costs, or
other information regarding the nontaxable programs and services
 .
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

   SECTION 1.    Section 995.3 is added to the 
 Revenue and Taxation Code   , to read:  
   995.3.  (a) The term "basic operational program" refers to a
"control program" as defined in Section 995.2 that is included in the
sale or lease price of the computer equipment. A program is included
in the sale or lease price of the computer equipment if either of
the following are met:
   (1) The equipment and the program are sold or leased at a single
price.
   (2) The purchase or lease documents set forth separate prices for
the equipment and the program, but the program may not be accepted or
rejected at the option of the customer.
   (b) In valuing computer equipment that is sold or leased at a
single price not segregated between taxable property and nontaxable
programs as defined in Section 995.2, the county assessor, lacking
evidence to the contrary, may regard the total amount charged as
indicative of the value of taxable tangible personal property.
   (c) A person claiming that a single price sale or lease includes
charges for nontaxable programs and services shall have the burden of
proving, by clear and convincing evidence, the existence of
nontaxable programs and services and the sales price, costs, or other
information regarding the nontaxable programs and services that will
assist the county assessor in making an informed judgment regarding
the proper value to be ascribed to taxable and nontaxable property.
 
  SECTION 1.    Section 995 of the Revenue and
Taxation Code is amended to read:
   995.  Storage media for computer programs shall be valued on the
1972 lien date and thereafter as if there were no computer program on
the media except basic operational programs. Otherwise, computer
programs shall not be valued for purpose of property taxation.
   As used in this section, storage media for computer programs may
take the form of, but are not limited to, punched cards, tapes, discs
or drums on which computer programs may be embodied or stored.
   As used in this section, a computer program may be, but is not
limited to, a set of written instructions, magnetic imprints,
required documentation or other process designed to enable the user
to communicate with or operate a computer or other machinery.