Amended in Assembly March 27, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2009

Introduced by Assembly Member Weber

February 20, 2014

An act to add Sections 8258, 8258.1, 8258.2, 8258.3, begin insert 8258.4, end insert 9259, 9259.1, 9259.2, begin delete 9259.3., end delete begin insert 9259.3, 9259.4, end insert 30457, 30457.1, 30457.2, 30457.3, begin insert 30457.4, end insert 32458, 32458.1, 32458.2, 32458.3, begin insert 32458.4, 40177, 40177.1, 40177.2, 40177.3, 40177.4, 41133, 41133.1, 41133.2, 41133.3, 41133.4, end insert 43507, 43507.1, 43507.2, 43507.3, begin insert 43507.4, end insert 45855.6, begin delete 45855.61, 45855.62, 45855.63, end delete begin insert 45855.6.1, 45855.6.2, 45855.6.3, 45855.6.4, end insert 46607, 46607.1, 46607.2, 46607.3, begin insert 46607.4, end insert 50155.6, begin delete 50155.61, 50155.62, 50155.63, end delete begin insert 50155.6.1, 50155.6.2, 50155.6.3, 50155.6.4, end insert 55306, 55306.1, 55306.2, 55306.3, begin insert 55306.4, end insert 60611, 60611.1, 60611.2, begin delete and end delete 60611.3 begin insert , and 60611.4 end insert to begin delete , to add Article 4.5 (commencing with Section 40192) to Chapter 7 of Part 19 of, and to add Article 4.5 (commencing with Section 41153) to Chapter 7 of Part 20 of, Division 2 of, end delete the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2009, as amended, Weber. State Board of Equalization: administration: managed audit program.

The Sales and Use Tax Law provides for a managed audit program, in which, if the State Board of Equalization determines a taxpayer’s account is eligible for the program by meeting specified criteria begin delete , end delete and the taxpayer agrees to participate, the taxpayer examines its books, records, and equipment to determine if it has any unreported tax liability for the audit period, in compliance with the managed audit instructions provided by the board. Under that law, upon completion of the managed audit and verification by the board, interest on any unpaid liability is computed at 1⁄2 the rate that would otherwise be imposed for liabilities covered by the audit period.

This bill would authorize a managed audit program for the Motor Vehicle Fuel Tax Law, Use Fuel Tax Law, Cigarette and Tobacco Products Tax Law, Alcoholic Beverage Tax Law, Energy Resources Surcharge Law, Emergency Telephone Users Surcharge Act, Hazardous Substances Tax Law, Integrated Waste Management Fee Law, Oil Spill Response, Prevention, and Administration Fees Law, Underground Storage Tank Maintenance Fee Law, fees collected pursuant to the Fee Collection Procedures Law, and Diesel Fuel Tax Law.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 8258 is added to the Revenue and
Taxation Code, to read:

8258.  

(a) The begin delete State Board of Equalization end delete begin insert board end insert shall
determine which begin delete taxpayer's end delete begin insert taxpayer’s end insert accounts are eligible for
the managed audit program in a manner that is consistent with the
efficient use of its auditing resources and the maximum
effectiveness of the program.

(b) A taxpayer is not required to participate in the managed
audit program.

SEC. 2.  

Section 8258.1 is added to the Revenue and Taxation
Code, to read:

8258.1.  

A begin delete taxpayer's end delete begin insert taxpayer’s end insert account is eligible for the
managed audit program only if the taxpayer meets all of the
following criteria:

(a) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves few or no
statutory exemptions.

(b) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves a single or a
small number of clearly defined taxability issues.

(c) The taxpayer is taxed pursuant to this part and agrees to
participate in the managed audit program.

(d) The taxpayer has the resources to comply with the managed
audit instructions provided by the board.

SEC. 3.  

Section 8258.2 is added to the Revenue and Taxation
Code, to read:

8258.2.  

(a) If the board selects a begin delete taxpayer's end delete begin insert taxpayer’s end insert account
for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the taxpayer is to follow in
determining any liability.

(D) The records to be reviewed by the taxpayer.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The taxpayer shall:

(A) Examine its books begin delete , records, and equipment end delete begin insert and records end insert to
determine if it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, records, and equipment end delete begin insert and books and records end insert examined
pursuant to subparagraph (A).

(b) The information provided by the taxpayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 8258.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 8258.3. end insert   

Nothing in the article limits the board’s authority to
examine the books and records of a taxpayer under Section 8253.

end insert

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section begin delete 8258.3 end delete begin insert 8258.4 end insert is added to the Revenue and
Taxation Code, to read:

begin delete 8258.3. end delete
begin insert 8258.4. end insert   

Upon completion of the managed audit and verification
by the board, interest on any unpaid liability shall be computed at
one-half the rate that would otherwise be imposed for liabilities
covered by the audit period. Payment of the liabilities and interest
shall be made within the time period specified by the board. If the
requirements for the managed audit are not satisfied, the board
may proceed to examine the records of the taxpayer in a manner
to be determined by the board under law.

begin delete SEC. 5. end delete
begin insert SEC. 6. end insert   

Section 9259 is added to the Revenue and Taxation
Code, to read:

9259.  

(a) The begin delete State Board of Equalization end delete begin insert board end insert shall
determine which begin delete taxpayer's end delete begin insert taxpayer’s end insert accounts are eligible for
the managed audit program in a manner that is consistent with the
efficient use of its auditing resources and the maximum
effectiveness of the program.

(b) A taxpayer is not required to participate in the managed
audit program.

begin delete SEC. 6. end delete
begin insert SEC. 7. end insert   

Section 9259.1 is added to the Revenue and Taxation
Code, to read:

9259.1.  

A begin delete taxpayer's end delete begin insert taxpayer’s end insert account is eligible for the
managed audit program only if the taxpayer meets all of the
following criteria:

(a) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves few or no
statutory exemptions.

(b) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves a single or a
small number of clearly defined taxability issues.

(c) The taxpayer is taxed pursuant to this part and agrees to
participate in the managed audit program.

(d) The taxpayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

Section 9259.2 is added to the Revenue and Taxation
Code, to read:

9259.2.  

(a) If the board selects a taxpayer’s account for a
managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the taxpayer is to follow in
determining any liability.

(D) The records to be reviewed by the taxpayer.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The taxpayer shall:

(A) Examine its books, begin insert papers, end insert records, and equipment to
determine if it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, end delete begin insert and books, papers, end insert records, and equipment examined
pursuant to subparagraph (A).

(b) The information provided by the taxpayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 9259.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 9259.3. end insert   

Nothing in this article limits the board’s authority to
examine the books, papers, records, and equipment of a taxpayer
under Section 9254.

end insert

begin delete SEC. 8. end delete
begin insert SEC. 10. end insert   

Section begin delete 9259.3 end delete begin insert 9259.4 end insert is added to the Revenue and
Taxation Code, to read:

begin delete 9259.3. end delete
begin insert 9259.4. end insert   

Upon completion of the managed audit and verification
by the board, interest on any unpaid liability shall be computed at
one-half the rate that would otherwise be imposed for liabilities
covered by the audit period. Payment of the liabilities and interest
shall be made within the time period specified by the board. If the
requirements for the managed audit are not satisfied, the board
may proceed to examine the records of the taxpayer in a manner
to be determined by the board under law.

begin delete SEC. 9. end delete
begin insert SEC. 11. end insert   

Section 30457 is added to the Revenue and Taxation
Code, to read:

30457.  

(a) The begin delete State Board of Equalization end delete begin insert board end insert shall
determine which begin delete taxpayer's end delete begin insert taxpayer’s end insert accounts are eligible for
the managed audit program in a manner that is consistent with the
efficient use of its auditing resources and the maximum
effectiveness of the program.

(b) A taxpayer is not required to participate in the managed
audit program.

begin delete SEC. 10. end delete
begin insert SEC. 12. end insert   

Section 30457.1 is added to the Revenue and Taxation
Code, to read:

30457.1.  

A begin delete taxpayer's end delete begin insert taxpayer’s end insert account is eligible for the
managed audit program only if the taxpayer meets all of the
following criteria:

(a) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves few or no
statutory exemptions.

(b) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves a single or a
small number of clearly defined taxability issues.

(c) The taxpayer is taxed pursuant to this part and agrees to
participate in the managed audit program.

(d) The taxpayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 11. end delete
begin insert SEC. 13. end insert   

Section 30457.2 is added to the Revenue and Taxation
Code, to read:

30457.2.  

(a) If the board selects a begin delete taxpayer's end delete begin insert taxpayer’s end insert account
for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the taxpayer is to follow in
determining any liability.

(D) The records to be reviewed by the taxpayer.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The taxpayer shall:

(A) Examine its books, begin insert papers, end insert records, and equipment to
determine if it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, end delete begin insert and books, papers, end insert records, and equipment examined
pursuant to subparagraph (A).

(b) The information provided by the taxpayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 30457.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 30457.3. end insert   

Nothing in this article limits the board’s authority to
examine the books, papers, records, and equipment of a taxpayer
under Section 30454.

end insert

begin delete SEC. 12. end delete
begin insert SEC. 15. end insert   

Section begin delete 30457.3 end delete begin insert 30457.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 30457.3. end delete
begin insert 30457.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the taxpayer in
a manner to be determined by the board under law.

begin delete SEC. 13. end delete
begin insert SEC. 16. end insert   

Section 32458 is added to the Revenue and Taxation
Code, to read:

32458.  

(a) The begin delete State Board of Equalization end delete begin insert board end insert shall
determine which begin delete taxpayer's end delete begin insert taxpayer’s end insert accounts are eligible for
the managed audit program in a manner that is consistent with the
efficient use of its auditing resources and the maximum
effectiveness of the program.

(b) A taxpayer is not required to participate in the managed
audit program.

begin delete SEC. 14. end delete
begin insert SEC. 17. end insert   

Section 32458.1 is added to the Revenue and Taxation
Code, to read:

32458.1.  

A begin delete taxpayer's end delete begin insert taxpayer’s end insert account is eligible for the
managed audit program only if the taxpayer meets all of the
following criteria:

(a) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves few or no
statutory exemptions.

(b) The begin delete taxpayer's end delete begin insert taxpayer’s end insert business involves a single or a
small number of clearly defined taxability issues.

(c) The taxpayer is taxed pursuant to this part and agrees to
participate in the managed audit program.

(d) The taxpayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 15. end delete
begin insert SEC. 18. end insert   

Section 32458.2 is added to the Revenue and Taxation
Code, to read:

32458.2.  

(a) If the board selects a begin delete taxpayer's end delete begin insert taxpayer’s end insert account
for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the taxpayer is to follow in
determining any liability.

(D) The records to be reviewed by the taxpayer.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The taxpayer shall:

(A) Examine its books begin delete , records, and equipment end delete begin insert and records end insert to
determine if it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, records, and equipment end delete begin insert and books and records end insert examined
pursuant to subparagraph (A).

(b) The information provided by the taxpayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 32458.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 32458.3. end insert   

Nothing in this article limits the board’s authority to
examine the books and records of a taxpayer under Section 32453.

end insert

begin delete SEC. 16. end delete
begin insert SEC. 20. end insert   

Section begin delete 32458.3 end delete begin insert 32458.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 32458.3. end delete
begin insert 32458.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the taxpayer in
a manner to be determined by the board under law.

begin delete

SEC. 17.  

Article 4.5 (commencing with Section 40192) is
added to Chapter 7 of Part 19 of Division 2 of the Revenue and
Taxation Code, to read:

 

Article 4.5.  Managed Audits

 

40192.  

(a) The board shall determine which electric utility’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) An electric utility is not required to participate in the
managed audit program.

40192.1.  

An electric utility’s account is eligible for the
managed audit program only if the electric utility meets all of the
following criteria:

(a) The electric utility’s business involves few or no statutory
exemptions.

(b) The electric utility’s business involves a single or small
number of clearly defined taxability issues.

(c) The electric utility is subject to this part and agrees to
participate in the managed audit program.

(d) The electric utility has the resources to comply with the
managed audit instructions provided by the board.

40192.2.  

(a) If the board selects an electric utility’s account
for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the electric utility is to follow
in determining any liability.

(D) The records to be reviewed by the electric utility.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The electric utility shall:

(A) Examine its books, records, and equipment to determine if
it has any unreported surcharge liability for the audit period.

(B) Make available to the board for verification all computations,
books, records, and equipment examined pursuant to subparagraph
(A).

(b) The information provided by the electric utility pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

40192.3.  

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the electric utility
in a manner to be determined by the board under law.

SEC. 18.  

Article 4.5 (commencing with Section 41153) is
added to Chapter 7 of Part 20 of Division 2 of the Revenue and
Taxation Code, to read:

 

Article 4.5.  Managed Audits

 

41153.  

(a) The board shall determine which service supplier’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) A service supplier is not required to participate in the
managed audit program.

41153.1.  

A service supplier’s account is eligible for the
managed audit program only if the service supplier meets all of
the following criteria:

(a) The service supplier’s business involves few or no statutory
exemptions.

(b) The service supplier’s business involves a single or a small
number of clearly defined taxability issues.

(c) The service supplier is taxed pursuant to this part and agrees
to participate in the managed audit program.

(d) The service supplier has the resources to comply with the
managed audit instructions provided by the board.

41153.2.  

(a) If the board selects a service supplier's account
for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the service supplier is to follow
in determining any liability.

(D) The records to be reviewed by the service supplier.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The service supplier shall:

(A) Examine its books, records, and equipment to determine if
it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations,
books, records, and equipment examined pursuant to subparagraph
(A).

(b) The information provided by the service supplier pursuant
to paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

41153.3.  

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the service
supplier in a manner to be determined by the board under law.

end delete

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert Section 40177 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 40177. end insert   

(a) The board shall determine which electric utility’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) An electric utility is not required to participate in the
managed audit program.

end insert

begin insert

begin insert SEC. 22. end insert   

end insert

begin insert Section 40177.1 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 40177.1. end insert   

An electric utility’s account is eligible for the
managed audit program only if the electric utility meets all of the
following criteria:

(a) The electric utility’s business involves few or no statutory
exemptions.

(b) The electric utility’s business involves a single or small
number of clearly defined taxability issues.

(c) The electric utility is subject to this part and agrees to
participate in the managed audit program.

(d) The electric utility has the resources to comply with the
managed audit instructions provided by the board.

end insert

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Section 40177.2 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 40177.2. end insert   

(a) If the board selects an electric utility’s account
for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the electric utility is to follow
in determining any liability.

(D) The records to be reviewed by the electric utility.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The electric utility shall:

(A) Examine its records, meters, and equipment to determine if
it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations
and records, meters, and equipment examined pursuant to
subparagraph (A).

(b) The information provided by the electric utility pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

end insert

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert Section 40177.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 40177.3. end insert   

Nothing in the article limits the board’s authority to
examine the records, meters, and equipment of an electric utility
under Section 40174.

end insert

begin insert

begin insert SEC. 25. end insert   

end insert

begin insert Section 40177.4 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 40177.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the electric utility
in a manner to be determined by the board under law.

end insert

begin insert

begin insert SEC. 26. end insert   

end insert

begin insert Section 41133 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 41133. end insert   

(a) The board shall determine which service supplier’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) A service supplier is not required to participate in the
managed audit program.

end insert

begin insert

begin insert SEC. 27. end insert   

end insert

begin insert Section 41133.1 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 41133.1. end insert   

A service supplier’s account is eligible for the
managed audit program only if the service supplier meets all of
the following criteria:

(a) The service supplier’s business involves few or no statutory
exemptions.

(b) The service supplier’s business involves a single or small
number of clearly defined taxability issues.

(c) The service supplier is taxed pursuant to this part and agrees
to participate in the managed audit program.

(d) The service supplier has the resources to comply with the
managed audit instructions provided by the board.

end insert

begin insert

begin insert SEC. 28. end insert   

end insert

begin insert Section 41133.2 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 41133.2. end insert   

(a) If the board selects a service supplier’s account
for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the service supplier is to follow
in determining any liability.

(D) The records to be reviewed by the service supplier.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The service supplier shall:

(A) Examine its records and returns to determine if it has any
unreported tax liability for the audit period.

(B) Make available to the board for verification all computations
and records and returns examined pursuant to subparagraph (A).

(b) The information provided by the service supplier pursuant
to paragraph (2) of subdivision (a) is the same information that
is required for the completion of any other audit that the board
may conduct.

end insert

begin insert

begin insert SEC. 29. end insert   

end insert

begin insert Section 41133.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 41133.3. end insert   

Nothing in this article limits the board’s authority to
inspect and audit all records and returns of a service supplier
under Section 41130.

end insert

begin insert

begin insert SEC. 30. end insert   

end insert

begin insert Section 41133.4 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 41133.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the service
supplier in a manner to be determined by the board under law.

end insert

begin delete SEC. 19. end delete
begin insert SEC. 31. end insert   

Section 43507 is added to the Revenue and Taxation
Code, to read:

43507.  

(a) The board shall determine which begin delete taxpayer's end delete
begin insert taxpayer’s end insert accounts are eligible for the managed audit program in
a manner that is consistent with the efficient use of its auditing
resources and the maximum effectiveness of the program.

(b) A taxpayer is not required to participate in the managed
audit program.

begin delete SEC. 20. end delete
begin insert SEC. 32. end insert   

Section 43507.1 is added to the Revenue and Taxation
Code, to read:

43507.1.  

A taxpayer’s account is eligible for the managed audit
program only if the taxpayer meets all of the following criteria:

(a) The taxpayer’s business or activities involve few or no
statutory exemptions.

(b) The taxpayer’s business or activities involve a single or a
small number of clearly defined taxability or liability issues.

(c) The taxpayer is taxed pursuant to this part and agrees to
participate in the managed audit program.

(d) The taxpayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 21. end delete
begin insert SEC. 33. end insert   

Section 43507.2 is added to the Revenue and Taxation
Code, to read:

43507.2.  

(a) If the board selects a taxpayer’s account for a
managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions or activities covered by the
managed audit.

(C) The specific procedures that the taxpayer is to follow in
determining any liability.

(D) The records to be reviewed by the taxpayer.

(E) The manner in which the types of transactions or activities
are to be scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The taxpayer shall:

(A) Examine its books begin delete , records, and equipment end delete begin insert and records end insert to
determine if it has any unreported liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, records, and equipment end delete begin insert and books and records end insert examined
pursuant to subparagraph (A).

(b) The information provided by the taxpayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 34. end insert   

end insert

begin insert Section 43507.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 43507.3. end insert   

Nothing in this article limits the board’s authority to
examine the books and records of a taxpayer under Section 43502.

end insert

begin delete SEC. 22. end delete
begin insert SEC. 35. end insert   

Section begin delete 43507.3 end delete begin insert 43507.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 43507.3. end delete
begin insert 43507.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the taxpayer in
a manner to be determined by the board under law.

begin delete SEC. 23. end delete
begin insert SEC. 36. end insert   

Section 45855.6 is added to the Revenue and Taxation
Code, to read:

45855.6.  

(a) The board shall determine which feepayer’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) A feepayer is not required to participate in the managed
audit program.

begin delete SEC. 24. end delete
begin insert SEC. 37. end insert   

Section begin delete 45855.61 end delete begin insert 45855.6.1 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 45855.61. end delete
begin insert 45855.6.1. end insert   

A feepayer’s account is eligible for the managed
audit program only if the feepayer meets all of the following
criteria:

(a) The feepayer’s business or activities involve few or no
statutory exemptions.

(b) The feepayer’s business or activities involve a single or a
small number of clearly defined taxability or liability issues.

(c) The feepayer is begin delete charged pursuant to this part end delete begin insert subject to the
fee imposed pursuant to Section 48000 of the Public Resources
Code end insert and agrees to participate in the managed audit program.

(d) The feepayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 25. end delete
begin insert SEC. 38. end insert   

Section begin delete 45855.62 end delete begin insert 45855.6.2 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 45855.62. end delete
begin insert 45855.6.2. end insert   

(a) If the board selects a feepayer’s account for a
managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions or activities covered by the
managed audit.

(C) The specific procedures that the feepayer is to follow in
determining any liability.

(D) The records to be reviewed by the feepayer.

(E) The manner in which the types of transactions or activities
are to be scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The feepayer shall:

(A) Examine its books begin delete , records, and equipment end delete begin insert and records end insert to
determine if it has any unreported liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, records, and equipment end delete begin insert and books and records end insert examined
pursuant to subparagraph (A).

(b) The information provided by the feepayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 39. end insert   

end insert

begin insert Section 45855.6.3 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

begin insert

begin insert 45855.6.3. end insert   

Nothing in this article limits the board’s authority
to examine the books and records of a fee payer under Section
45852.

end insert

begin delete SEC. 26. end delete
begin insert SEC. 40. end insert   

Section begin delete 45855.63 end delete begin insert 45855.6.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 45855.63. end delete
begin insert 45855.6.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the feepayer in
a manner to be determined by the board under law.

begin delete SEC. 27. end delete
begin insert SEC. 41. end insert   

Section 46607 is added to the Revenue and Taxation
Code, to read:

46607.  

(a) The board shall determine which feepayer’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) A feepayer is not required to participate in the managed
audit program.

begin delete SEC. 28. end delete
begin insert SEC. 42. end insert   

Section 46607.1 is added to the Revenue and Taxation
Code, to read:

46607.1.  

A feepayer’s account is eligible for the managed audit
program only if the feepayer meets all of the following criteria:

(a) The feepayer’s business or activities involve few or no
statutory exemptions.

(b) The feepayer’s business or activities involve a single or a
small number of clearly defined taxability or liability issues.

(c) The feepayer is begin delete charged pursuant to this part end delete begin insert subject to the
fee imposed pursuant to Section 8670.40 or Section 8670.48 of the
Government Code end insert and agrees to participate in the managed audit
program.

(d) The feepayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 29. end delete
begin insert SEC. 43. end insert   

Section 46607.2 is added to the Revenue and Taxation
Code, to read:

46607.2.  

(a) If the board selects a feepayer’s account for a
managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions or activities covered by the
managed audit.

(C) The specific procedures that the feepayer is to follow in
determining any liability.

(D) The records to be reviewed by the feepayer.

(E) The manner in which the types of transactions or activities
are to be scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The feepayer shall:

(A) Examine its books begin delete , records, and equipment end delete begin insert and records end insert to
determine if it has any unreported liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, records, and equipment end delete begin insert and books and records end insert examined
pursuant to subparagraph (A).

(b) The information provided by the feepayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 44. end insert   

end insert

begin insert Section 46607.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 46607.3. end insert   

Nothing in this article limits the board’s authority to
examine the books and records of a feepayer under Section 46603.

end insert

begin delete SEC. 30. end delete
begin insert SEC. 45. end insert   

Section begin delete 46607.3 end delete begin insert 46607.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 46607.3. end delete
begin insert 46607.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the feepayer in
a manner to be determined by the board under law.

begin delete SEC. 31. end delete
begin insert SEC. 46. end insert   

Section 50155.6 is added to the Revenue and Taxation
Code, to read:

50155.6.  

(a) The board shall determine which feepayer’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) A feepayer is not required to participate in the managed
audit program.

begin delete SEC. 32. end delete
begin insert SEC. 47. end insert   

Section begin delete 50155.61 end delete begin insert 50155.6.1 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 50155.61. end delete
begin insert 50155.6.1. end insert   

A feepayer’s account is eligible for the managed
audit program only if the feepayer meets all of the following
criteria:

(a) The feepayer’s business or activities involve few or no
statutory exemptions.

(b) The feepayer’s business or activities involves a single or
small number of clearly defined taxability or liability issues.

(c) The feepayer is begin delete charged pursuant to this part end delete begin insert subject to the
fee imposed pursuant to Section 25299.41 of the Health and Safety
Code end insert and agrees to participate in the managed audit program.

(d) The feepayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 33. end delete
begin insert SEC. 48. end insert   

Section begin delete 50155.62 end delete begin insert 50155.6.2 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 50155.62. end delete
begin insert 50155.6.2. end insert   

(a) If the board selects a feepayer’s account for a
managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions or activities covered by the
managed audit.

(C) The specific procedures that the feepayer is to follow in
determining any liability.

(D) The records to be reviewed by the feepayer.

(E) The manner in which the types of transactions or activities
are to be scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The feepayer shall:

(A) Examine its books begin delete , records, and equipment end delete begin insert and records end insert to
determine if it has any unreported liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, records, and equipment end delete begin insert and books and records end insert examined
pursuant to subparagraph (A).

(b) The information provided by the feepayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 49. end insert   

end insert

begin insert Section 50155.6.3 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

begin insert

begin insert 50155.6.3. end insert   

Nothing in this article limits the board’s authority
to examine the books and records of a fee payer under Section
50153.

end insert

begin delete SEC. 34. end delete
begin insert SEC. 50. end insert   

Section begin delete 50155.63 end delete begin insert 50155.6.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 50155.63. end delete
begin insert 50155.6.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the feepayer in
a manner to be determined by the board under law.

begin delete SEC. 35. end delete
begin insert SEC. 51. end insert   

Section 55306 is added to the Revenue and Taxation
Code, to read:

55306.  

(a) The board shall determine which feepayer’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) A feepayer is not required to participate in the managed
audit program.

begin delete SEC. 36. end delete
begin insert SEC. 52. end insert   

Section 55306.1 is added to the Revenue and Taxation
Code, to read:

55306.1.  

A feepayer’s account is eligible for the managed audit
program only if the feepayer meets all of the following criteria:

(a) The feepayer’s business or activities involve few or no
statutory exemptions.

(b) The feepayer’s business or activities involve a single or a
small number of clearly defined taxability or liability issues.

(c) The feepayer is begin delete subject to the collection procedures in this end delete
begin insert liable for payment of a fee collected pursuant to this end insert part and
agrees to participate in the managed audit program.

(d) The feepayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 37. end delete
begin insert SEC. 53. end insert   

Section 55306.2 is added to the Revenue and Taxation
Code, to read:

55306.2.  

(a) If the board selects a feepayer’s account for a
managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions or activities covered by the
managed audit.

(C) The specific procedures that the feepayer is to follow in
determining any liability.

(D) The records to be reviewed by the feepayer.

(E) The manner in which the types of transactions or activities
are to be scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The feepayer shall:

(A) Examine its books begin delete , records, and equipment end delete begin insert and records end insert to
determine if it has any unreported liability for the audit period.

(B) Make available to the board for verification all computations begin delete ,
books, records, and equipment end delete begin insert books and records end insert examined
pursuant to subparagraph (A).

(b) The information provided by the feepayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 54. end insert   

end insert

begin insert Section 55306.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 55306.3. end insert   

Nothing in this article limits the board’s authority to
examine the books and records of a feepayer under Section 55302.

end insert

begin delete SEC. 38. end delete
begin insert SEC. 55. end insert   

Section begin delete 55306.3 end delete begin insert 55306.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 55306.3. end delete
begin insert 55306.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the feepayer in
a manner to be determined by the board under law.

begin delete SEC. 39. end delete
begin insert SEC. 56. end insert   

Section 60611 is added to the Revenue and Taxation
Code, to read:

60611.  

(a) The board shall determine which taxpayer’s
accounts are eligible for the managed audit program in a manner
that is consistent with the efficient use of its auditing resources
and the maximum effectiveness of the program.

(b) A taxpayer is not required to participate in the managed
audit program.

begin delete SEC. 40. end delete
begin insert SEC. 57. end insert   

Section 60611.1 is added to the Revenue and Taxation
Code, to read:

60611.1.  

A taxpayer’s account is eligible for the managed audit
program only if the taxpayer meets all of the following criteria:

(a) The taxpayer’s business involves few or no statutory
exemptions.

(b) The taxpayer’s business involves a single or a small number
of clearly defined taxability issues.

(c) The taxpayer is taxed pursuant to this part and agrees to
participate in the managed audit program.

(d) The taxpayer has the resources to comply with the managed
audit instructions provided by the board.

begin delete SEC. 41. end delete
begin insert SEC. 58. end insert   

Section 60611.2 is added to the Revenue and Taxation
Code, to read:

60611.2.  

(a) If the board selects a taxpayer’s account for a
managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the taxpayer is to follow in
determining any liability.

(D) The records to be reviewed by the taxpayer.

(E) The manner in which the types of transactions are to be
scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion
of the managed audit.

(2) The taxpayer shall:

(A) Examine its books, records, and equipment to determine if
it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all begin delete computations, end delete
begin insert computations and end insert books, records, and equipment examined
pursuant to subparagraph (A).

(b) The information provided by the taxpayer pursuant to
paragraph (2) of subdivision (a) is the same information that is
required for the completion of any other audit that the board may
conduct.

begin insert

begin insert SEC. 59. end insert   

end insert

begin insert Section 60611.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 60611.3. end insert   

Nothing in this article limits the board’s authority to
examine the books, records, and equipment of a taxpayer under
Section 60606.

end insert

begin delete SEC. 42. end delete
begin insert SEC. 60. end insert   

Section begin delete 60611.3 end delete begin insert 60611.4 end insert is added to the Revenue
and Taxation Code, to read:

begin delete 60611.3. end delete
begin insert 60611.4. end insert   

Upon completion of the managed audit and
verification by the board, interest on any unpaid liability shall be
computed at one-half the rate that would otherwise be imposed
for liabilities covered by the audit period. Payment of the liabilities
and interest shall be made within the time period specified by the
board. If the requirements for the managed audit are not satisfied,
the board may proceed to examine the records of the taxpayer in
a manner to be determined by the board under law.