Amended in Senate July 2, 2014

Amended in Assembly April 10, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2757

Introduced by begin delete Committee on Revenue and Taxation (Bocanegra (Chair), Gordon, Mullin, Pan, V. Manuel Pérez, and Ting) end delete begin insert Assembly Member Bocanegra end insert

March 24, 2014

An act to amend begin delete Sections 60501 and 60505.5 of the Revenue and Taxation Code, relating to taxation end delete begin insert Sections 4128, 4128.4, and 4128.5 of the Business and Professions Code, relating to pharmacy end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 2757, as amended, begin delete Committee on Revenue and Taxation end delete   begin insert Bocanegra end insert . begin delete Diesel Fuel Tax Law: reimbursements. end delete begin insert Centralized hospital packaging pharmacies: medication labels. end insert

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The Pharmacy Law provides for the licensure and regulation of pharmacies, including hospital pharmacies, by the California State Board of Pharmacy, and makes a knowing violation of that law a crime. Existing law authorizes a centralized hospital packaging pharmacy to prepare medications for administration to inpatients within its own general acute care hospital or certain other commonly owned hospitals. Existing law requires that these medications be barcoded to be readable at the inpatient’s bedside in order to retrieve certain information, including the date that the medication was prepared and the components used in the drug product.

end insert begin insert

This bill would instead require that this information be displayed on a human-readable label or be retrievable using the lot number or control number of the medication, rather than by reading the barcode. The bill would require that a medication’s barcode be machine readable using medication administration software, and that the software compare the information contained in the barcode to the electronic medical record of the inpatient in order to verify that the medication to be given is the correct medication, dosage, and route of administration for that patient. Because a knowing violation of these provisions would be a crime, the bill would impose a state-mandated local program.

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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.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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The Diesel Fuel Tax Law imposes a tax upon the removal, entry, sale, delivery, or specified use of diesel fuel, at a specified rate per gallon. That law provides for a reimbursement of the amount of that tax to persons who have used that tax-paid fuel in specified nontaxable uses, which is allowed through a claim for refund.

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This bill would allow a claim for refund for amounts of tax paid on the biodiesel fuel portion of dyed blended biodiesel fuel removed from an approved terminal at the terminal rack, as provided, to the extent a supplier can show that the tax on that biodiesel fuel has been paid by the same supplier.

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

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

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begin insert SECTION 1. end insert   

end insert

begin insert Section 4128 of the end insert begin insert Business and Professions
Code end insert begin insert is amended to read: end insert

4128.  

(a) Notwithstanding Section 4029, a centralized hospital
packaging pharmacy may prepare medications, by performing the
following specialized functions, for administration only to
inpatients within its own general acute care hospital and one or
more general acute care hospitals if the hospitals are under common
ownership and located within a 75-mile radius of each other:

(1) Preparing unit dose packages for single administration to
inpatients from bulk containers, if each unit dose package is
barcoded begin insert pursuant end insert to begin delete contain at least the information required by end delete
Section 4128.4.

(2) Preparing begin insert sterile end insert compounded unit dose drugs for begin delete parenteral
therapy for end delete administration to inpatients, if each compounded unit
dose drug is barcoded begin insert pursuant end insert to begin delete contain at least the information
required by end delete Section 4128.4.

(3) Preparing compounded unit dose drugs for administration
to inpatients, if each unit dose package is barcoded begin insert pursuant end insert to
begin delete contain at least the information required by end delete Section 4128.4.

(b) For purposes of this article, “common ownership” means
that the ownership information on file with the board pursuant to
Section 4201 for the licensed pharmacy is consistent with the
ownership information on file with the board for the other licensed
pharmacy or pharmacies for purposes of preparing medications
pursuant to this section.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 4128.4 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

4128.4.  

begin insert (a) end insert begin insert   end insert Any unit dose medication produced by a centralized
hospital packaging pharmacy shall be barcoded to be begin insert machine end insert
readable at the inpatient’s bedside begin insert using barcode medication
administration software end insert . begin delete Upon reading the barcode, the following
information shall be retrievable: end delete

begin delete

(a) The date the medication was prepared.

(b) The components used in the drug product.

(c) The lot number or control number.

(d) The expiration date.

(e) The National Drug Code Directory number.

(f) The name of the centralized hospital packaging pharmacy.

end delete begin insert

(b) The barcode medication administration software shall permit
health care practitioners to ensure that, before a medication is
administered to an inpatient, it is the right medication, for the
right inpatient, in the right dose, and via the right route of
administration. The software shall verify that the medication
satisfies these criteria by reading the barcode on the medication
and comparing the information retrieved to the electronic medical
record of the inpatient.

end insert begin insert

(c) For purposes of this section, “barcode medication
administration software” means a computerized system designed
to prevent medication errors in health care settings.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 4128.5 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

4128.5.  

begin delete The label for each end delete begin insert (a) end insert begin insert   end insert begin insert Any end insert unit dose medication
produced by a centralized hospital packaging pharmacy shall
begin delete contain end delete begin insert display a human-readable label that contains all of the
following: end insert

begin insert

(1) The date that the medication was prepared.

end insert begin delete

(a)

end delete

begin insert (2) end insert  The begin delete expiration end delete begin insert beyond-use end insert date.

begin delete

(b)

end delete

begin insert (3) end insert  The established name of the drug.

begin delete

(c)

end delete

begin insert (4) end insert  The quantity of the active ingredient.

begin delete

(d)

end delete

begin insert (5) end insert  Special storage or handling requirements.

begin insert

(6) The lot number or control number assigned by the
centralized hospital packaging pharmacy.

end insert begin insert

(7) The name of the centralized hospital packaging pharmacy.

end insert begin insert

(b) For quality control and investigative purposes, a pharmacist
shall be able to retrieve all of the following information using the
lot number or control number described in subdivision (a):

end insert begin insert

(1) The components used in the drug product.

end insert begin insert

(2) The expiration date of each of the drug’s components.

end insert begin insert

(3) The National Drug Code Directory number.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin delete

SECTION 1.  

Section 60501 of the Revenue and Taxation Code
is amended to read:

60501.  

Persons who have paid a tax for diesel fuel lost, sold,
or removed as provided in paragraph (4) of subdivision (a), or used
in a nontaxable use, other than on a farm for farming purposes or
in an exempt bus operation, shall, except as otherwise provided in
this part, be reimbursed and repaid the amount of the tax.

(a) Except as otherwise provided in subdivision (b), a claim for
refund with respect to diesel fuel is allowed under this section only
if all of the following apply:

(1) Tax was imposed on the diesel fuel to which the claim
relates.

(2) The claimant bought or produced the diesel fuel and did not
sell or resell it in this state except as provided in paragraph (4).

(3) The claimant has filed a timely claim for refund that contains
the information required under subdivision (b) and the claim is
supported by the original invoice or original invoice facsimile
retained in an alternative storage media showing the purchase. If
no original invoice was created, electronic invoicing shall be
accepted as reflected by a computerized facsimile when
accompanied by an original copy of the bill of lading or fuel
manifest that can be directly tied to the electronic invoice.

(4) The diesel fuel was any of the following:

(A) Used for purposes other than operating motor vehicles upon
the public highways of the state.

(B) Exported for use outside of this state. Diesel fuel carried
from this state in the fuel tank of a motor vehicle is not deemed to
be exported from this state unless the diesel fuel becomes subject
to tax as an import under the laws of the destination state.

(C) Used in any construction equipment that is exempt from
vehicle registration pursuant to the Vehicle Code, while operated
within the confines and limits of a construction project.

(D) Used in the operation of a motor vehicle on any highway
that is under the jurisdiction of the United States Department of
Agriculture and with respect to the use of the highway the claimant
pays, or contributes to, the cost of construction or maintenance
thereof pursuant to an agreement with, or permission of, the United
States Department of Agriculture.

(E) Used in any motor vehicle owned by any county, city and
county, city, district, or other political subdivision or public agency
when operated by it over any highway constructed and maintained
by the United States or any department or agency thereof within
a military reservation in this state. If the motor vehicle is operated
both over the highway and over a public highway outside the
military reservation in a continuous trip the tax shall not be
refunded as to that portion of the diesel fuel used to operate the
vehicle over the public highway outside the military reservation.

Nothing contained in this section shall be construed as a refund
of the tax for the use of diesel fuel in any motor vehicle operated
upon a public highway within a military reservation, which
highway is constructed or maintained by this state or any political
subdivision thereof.

As used in this section, “military reservation” includes any
establishment of the United States Government or any agency
thereof used by the Armed Forces of the United States for military,
air, or naval operations, including research projects.

(F) Sold by a supplier and which was sold to any consulate
officer or consulate employee under circumstances which would
have entitled the supplier to an exemption under paragraph (6) of
subdivision (a) of Section 60100 if the supplier had sold the diesel
fuel directly to the consulate officer or consulate employee.

(G) Lost in the ordinary course of handling, transportation, or
storage.

(H) (i) Sold by a person to the United States and its agencies
and instrumentalities under circumstances that would have entitled
that person to an exemption from the payment of diesel fuel tax
under Section 60100 had that person been the supplier of this diesel
fuel.

(ii) Sold by a supplier and which was sold by credit card to the
United States and its agencies and instrumentalities under
circumstances which would have entitled the supplier to an
exemption under Section 60100 if the supplier had sold the diesel
fuel directly to the United States and its agencies and
instrumentalities.

(I) Sold by a person to a train operator for use in a
diesel-powered train or for other off-highway use under
circumstances that would have entitled that person to an exemption
from the payment of diesel fuel tax under Section 60100 had that
person been the supplier of this diesel fuel.

(J) Removed from an approved terminal at the terminal rack,
but only to the extent that the supplier can show that the tax on the
same amount of diesel fuel has been paid more than one time by
the same supplier.

(b) Where tax is not imposed on dyed blended biodiesel fuel
upon removal from an approved terminal at the terminal rack, if
tax was previously imposed on the biodiesel fuel portion of the
dyed blended biodiesel fuel, then, pursuant to paragraph (1) of
subdivision (a), a claim for refund is allowed for the tax that was
paid on that biodiesel fuel, but only to the extent a supplier can
show that the tax on that biodiesel fuel has been paid by the same
supplier.

(c) Each claim for refund under this section shall contain the
following information with respect to all of the diesel fuel covered
by the claim:

(1) The name, address, telephone number, and permit number
of the person that sold the diesel fuel to the claimant and the date
of the purchase.

(2) A statement by the claimant that the diesel fuel covered by
the claim did not contain visible evidence of dye.

(3) A statement, which may appear on the invoice, original
invoice facsimile, or similar document, by the person that sold the
diesel fuel to the claimant that the diesel fuel sold did not contain
visible evidence of dye.

(4) The total amount of diesel fuel covered by the claim.

(5) The use made of the diesel fuel covered by the claim
described by reference to specific categories listed in paragraph
(4) of subdivision (a).

(6) If the diesel fuel covered by the claim was exported, a
statement that the claimant has the proof of exportation.

(d) Each claim for refund under this section shall be made on
a form prescribed by the board and shall be filed for a calendar
year. If, at the close of any of the first three quarters of the calendar
year, more than seven hundred fifty dollars ($750) is refundable
under this section with respect to diesel fuel used or exported
during that quarter or any prior quarter during the calendar year,
and for which no other claim has been filed, a claim may be filed
for the quarterly period. To facilitate the administration of this
section, the board may require the filing of claims for refund for
other than yearly periods.

SEC. 2.  

Section 60505.5 of the Revenue and Taxation Code
is amended to read:

60505.5.  

The claim for refund forms prescribed in subdivision
(d) of Section 60501 and subdivision (d) of Section 60502 may
include, but not be limited to, electronic media. The claim for
refund forms shall be authenticated in a form or pursuant to
methods as may be prescribed by the board.

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