BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2031
                                                                  Page  1

          Date of Hearing:   May 14, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                      AB 2031 (Dahle) - As Amended:  May 6, 2014

          Policy Committee:                              Revenue &  
          Taxation     Vote:                            8-1

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill relieves retailers with sales of qualified lumber and  
          engineered wood products of less than $25,000 during the  
          previous calendar year from liability to collect the Lumber  
          Products Assessment (LPA) and to report to the State Board of  
          Equalization (BOE).

          The LPA is technically assessed on the purchaser and only  
          collected by the seller, and purchasers will still be required  
          to report the LPA to the BOE.  This bill requires exempt  
          retailers to provide notification to their customers regarding  
          purchasers' obligation to remit the LPA fee to the BOE.

           FISCAL EFFECT  

          1)Minor and absorbable costs to the BOE to administer changes to  
            the LPA, likely offset, at least in part, by minor efficiency  
            savings.

          2)Estimated decrease in annual GF revenues of up to $38,000 from  
            relieving small retailers from LPA collection liability.

           COMMENTS  

          1)  Purpose.   According to the author, this bill is necessary to  
            relieve small sellers of lumber products from the burdens of  
            collecting and reporting the LPA to the BOE.  Currently,  
            sellers of lumber products must register with the BOE and  
            report the LPA regardless of the amount of annual sales of  
            qualified lumber.
           








                                                                  AB 2031
                                                                  Page  2

          2)  The LPA Program.   In 2012, the Legislature established a new  
            assessment on the sales of lumber products and engineered wood  
            products at a rate of 1% of gross receipts, on or after  
            January 1, 2013.  The LPA was proposed by the timber industry  
            to reform wildfire liability damages, extend the life of  
            timber harvest plans, and fund the timber harvest review.

            While the legal incident of this assessment fee is placed on  
            the purchaser, the retailers are required to collect the LPA  
            at the time of sale and itemize the amount of the LPA on sales  
            receipts.  The law allows a retailer to be reimbursed for the  
            costs of setting up the collection system from the assessment  
            amounts collected by the retailer.



           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081