Amended in Assembly March 20, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1891

Introduced by Assembly Member Donnelly

February 19, 2014

begin delete An act to amend Section 7204.4 of the Revenue and Taxation Code, relating to taxation. end delete begin insert An act to add and repeal Section 6356.8 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1891, as amended, Donnelly. begin delete Uniform local sales and use taxes. end delete begin insert Sales and use taxes: exemption: water desalination: equipment. end insert

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Existing sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. That law provides various exemptions from those taxes.

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This bill would, until January 1, 2025, exempt from those taxes the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, any equipment purchased to be primarily used for water desalination.

end insert begin insert

The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Amendments to state sales and use taxes are incorporated into these laws.

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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.

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This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.

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This bill would take effect immediately as a tax levy, but its operative date would depend on its effective date.

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The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes a city, county, or city and county to impose sales and use taxes in accordance with that law. That law requires the State Board of Equalization to deduct from the tax revenues collected for counties and cities and counties under that law an amount equal to specified costs incurred by the Director of Transportation and the Controller.

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This bill would make technical, nonsubstantive changes to the provision requiring the board to make these revenue deductions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 6356.8 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

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begin insert 6356.8. end insert   

(a) 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, any equipment
purchased to be primarily used for water desalination.

(b) “Water desalination” means a process that removes salt
and other minerals from saline water to produce fresh water
suitable for human consumption or irrigation.

(c) This section shall remain in effect only until January 1, 2025,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2025, deletes or extends that date.

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begin insert SEC. 2. end insert   

end insert begin insert

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.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

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.

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SECTION 1.  

Section 7204.4 of the Revenue and Taxation
Code is amended to read:

7204.4.  

The Director of Transportation and the Controller shall
charge for the cost of their services in administering the
responsibilities assigned to them in Chapter 4 (commencing with
Section 99200) of Part 11 of Division 10 of the Public Utilities
Code. Amounts to be charged shall be specified in the annual
Budget Act. Those amounts shall be deducted from the tax
revenues collected by the board for the counties and the cities and
counties.

end delete