Bill Text: CA SB1102 | 2023-2024 | Regular Session | Amended

California Senate Bill 1102

Bill Title: Personal Income Tax Law: Corporation Tax Law: oil spill: exclusions.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced) 2024-04-22 - April 22 hearing: Placed on APPR suspense file. [SB1102 Detail]

Download: California-2023-SB1102-Amended.html

Amended IN Senate April 11, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 1102

Introduced by Senator Nguyen
(Coauthor: Assembly Member Davies)

February 13, 2024

An act to add and repeal Sections 17139.1 and 24309.9 of the Revenue and Taxation Code, relating to taxation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL'S DIGEST

SB 1102, as amended, Nguyen. Personal Income Tax Law: Corporation Tax Law: oil spill: exclusions.

The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.

This bill would provide an exclusion from gross income for any qualified taxpayer, as defined, for amounts received in settlements associated with the October 2, 2021, oil spill that occurred off the coast of the County of Orange near the City of Huntington Beach. The bill would repeal these provisions on January 1, 2029.

Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account.

This bill would authorize the refund of overpayments of tax as a result of the above-described exclusion, in prior tax years, payable out of the Tax Relief and Refund Account. By authorizing new payments from a continuously appropriated fund, this bill would make an appropriation.

Existing law requires that any bill that would authorize certain tax expenditures contain, among other things, specific goals, purposes, and objectives that the tax expenditure or exemption will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

This bill would apply its provisions to taxable years beginning before, on, and after the effective date of this bill. The bill would make legislative findings and declarations regarding the public purpose served by this bill.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 2/3 Appropriation: YES Fiscal Committee: YES Local Program: NO

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

SECTION 1.

The Legislature finds and declares all of the following:

(a) On October 2, 2021, an oil spill occurred off the coast of the County of Orange near the City of Huntington Beach.

(b) The spill resulted in approximately 144,000 gallons of crude oil seeping into the ocean from a ruptured pipeline.

(c) The spill forced beaches to close along the County of Orange coast, resulting in significant property damage, loss of revenue from closed businesses, and a loss in revenue to the fishing industry due to the halting of fishing operations.

(d) The impacts on the fishing industry were the result of a ban that encompassed 650 square miles of marine waters and approximately 45 miles of shoreline, including all bays and harbors from the City of Seal Beach to San Onofre State Beach.

SEC. 2.

Section 17139.1 is added to the Revenue and Taxation Code, to read:

17139.1.

(a) Gross income does not include any qualified amount received by a qualified taxpayer.

(b) For purposes of this section:

(1) “Qualified amount” means any amount received in settlement by a qualified taxpayer from Amplify Energy Corp., Beta Operating Company, LLC, San Pedro Bay Pipeline Company, or any other ~~settling defendant~~ qualified taxpayer in settlement for claims relating to the October 2, 2021, oil spill off the coast of the County of Orange near the City of Huntington Beach.

(2) “Qualified taxpayer” means any of the following:

(A) Any taxpayer that owned real property located in the County of Orange near the City of Huntington Beach during the October 2, 2021, oil spill who paid ~~and~~ or incurred expenses and received amounts from a settlement arising out of or pursuant to the October 2, 2021, oil spill.

(B) Any taxpayer that resided within the County of Orange near the City of Huntington Beach during the October 2, 2021, oil spill who paid ~~and~~ or incurred expenses and received amounts from a settlement arising out of or pursuant to the October 2, 2021, oil spill.

(C) Any taxpayer that had a place of business within the County of Orange near the City of Huntington Beach during the October 2, 2021, oil spill who paid ~~and~~ or incurred expenses and received amounts from a settlement arising out of or pursuant to the October 2, 2021, oil spill.

(3) “Settlement entity” means the entity making the settlement payment to a qualified taxpayer as described in paragraph (2).

(c) The settlement entity shall provide, upon request by the Franchise Tax Board, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board.

(d) (1) This section shall apply to taxable years beginning before, on, or after the effective date of the act adding this section.

(2) If the credit or refund of any overpayment of tax resulting from the application of this section to a period before the effective date of this section is prevented as of that date by the operation of any law or rule of law, including res judicata, that credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the one-year period beginning on the effective date of the act adding this section.

(e) This section shall remain in effect only until January 1, 2029, and as of that date is repealed.

SEC. 3.

Section 24309.9 is added to the Revenue and Taxation Code, to read:

24309.9.

(a) Gross income does not include any qualified amount received by a qualified taxpayer.

(b) For purposes of this section:

(2) “Qualified taxpayer” means any of the following:

(3) “Settlement entity” means the entity making the settlement payment to a qualified taxpayer as described in paragraph (2).

(c) The settlement entity shall provide, upon request by the Franchise Tax Board, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board.

(d) (1) This section shall apply to taxable years beginning before, on, or after the effective date of the act adding this section.

(e) This section shall remain in effect only until January 1, 2029, and as of that date is repealed.

SEC. 4.

(a) For the purpose of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares that the purpose of the tax expenditure allowed pursuant to Sections 17139.1 and 24309.9 of the Revenue and Taxation Code, as added by this act, is to provide essential relief to individuals who have suffered injury, loss, inconvenience, and expenses resulting from the devastating October 2, 2021, oil spill.

(b) (1) On January 1, ~~2030,~~ 2032, the Franchise Tax Board shall deliver to the Legislature a written report that includes both of the following:

(A) The number of qualified taxpayers that excluded qualified amounts from gross income, as those terms are used in this act, as a result of the tax expenditure allowed by this act.

(B) The aggregate amount of those settlement payments arising out of the October 2, 2021, oil spill.

(2) The report required by this subdivision shall be delivered to the Legislature pursuant to Section 9795 of the Government Code.

(3) The disclosure provisions of this subdivision shall be treated as an exception to Section 19542 under Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2 of Division 2 of the Revenue and Taxation Code, and any taxpayer information shall be in an aggregate and anonymized form.

SEC. 5.

The Legislature finds and declares that Sections 17139.1 and 24309.9 of the Revenue and Taxation Code, as added by this act, are necessary for the public purpose of preventing undue hardship to taxpayers who reside, or used to reside, in a part of California devastated by oil spills, and do not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution.

SEC. 6.

This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

In order to provide essential relief to those persons who have suffered injury, loss, inconvenience, and expenses resulting from the devastating October 2, 2021, oil spill as soon as possible, it is necessary that this act take effect immediately.