Bill Text: CA SB323 | 2013-2014 | Regular Session | Amended


Bill Title: Taxes: exemptions: prohibited discrimination.

Status: (Engrossed) 2013-09-12 - Ordered to inactive file on request of Assembly Member Eggman. [SB323 Detail]

Download: California-2013-SB323-Amended.html
BILL NUMBER: SB 323	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 14, 2013
	AMENDED IN SENATE  APRIL 16, 2013

INTRODUCED BY   Senator Lara
   (Principal coauthors: Senators DeSaulnier and Lieu)
   (Coauthors: Senators De León, Hancock, Hill, Leno, Monning, and
Yee)
   (Coauthors: Assembly Members Ammiano, Atkins, Bloom, Buchanan,
Eggman, Garcia, Gomez, Gordon, Lowenthal, Mitchell, and Rendon)

                        FEBRUARY 19, 2013

   An act to amend  Sections 6361 and 23701d of 
 Section 6361 of, and to add Section 23701.3 to,  the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 323, as amended, Lara. Taxes: exemptions: prohibited
discrimination.
   The Sales and Use Tax Law exempts from the taxes imposed by that
law the sales of food products, nonalcoholic beverages, and other
tangible personal property made or produced by an organization, as
defined, but only if sold on an irregular or intermittent basis and
the organization's profits from the sales are used exclusively in
furtherance of the purposes of the organization. The Corporation Tax
Law, in modified conformity with federal income tax laws, exempts the
income of various types of organizations from taxes imposed by that
law.
   This bill would revise the Sales and Use Tax Law exemption for
those organizations, as provided. This bill would also provide  ,
for taxable years beginning on or after January 1, 2014,  that
an organization that is a public charity youth organization that
discriminates on the basis of gender identity, race, sexual
orientation, nationality, religion, or religious affiliation is not
exempt from the taxes imposed by that law.
   This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
   This bill would take effect immediately as a tax levy.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 6361 of the Revenue and Taxation Code is
amended to read:
   6361.  (a) Any organization listed or described in subdivision (b)
is a consumer and shall not be considered a retailer within the
provisions of this part, of food products, nonalcoholic beverages, or
other tangible personal property made or produced by members of the
organization provided, however, that the organization's sales are
made on an irregular or intermittent basis, and that the organization'
s profits from those sales are used exclusively in furtherance of the
purposes of the organization.
   (b) For purposes of this section, "organization" includes any of
the following:
   (1) Any nonprofit organization which meets all of the following
conditions:
   (A) The organization qualifies for tax-exempt status under Section
501(c) of the Internal Revenue Code.
   (B) The organization's primary purpose is to provide a supervised
program of competitive sports for youth, or to promote good
citizenship in youth.
   (C) The organization does not discriminate on the basis of gender
identity, race, sex, sexual orientation, nationality, religion, or
religious affiliation.
   (2) (A) Any youth group sponsored by or affiliated with a
qualified educational institution, including, but not limited to, any
student activity club, athletic group, or musical group.
   (B) For purposes of this section, "qualified educational
institution" means any of the following:
   (i) Any public elementary, secondary, or vocational-technical
school providing education for kindergarten, grades 1 to 12,
inclusive, and college undergraduate programs, or any part thereof,
operated by state or local government.
   (ii) Any nonprofit private educational institution providing
education for kindergarten, grades 1 to 12, inclusive, and college
undergraduate programs, or any part thereof, that meets the
requirements of the State Department of Education for a school.
"Private educational institution" means any entity providing
education which satisfies the requirements of state and local laws
pertaining to private educational institutions in effect on January
1, 1990, and which does not discriminate on the basis of gender
identity, race, sex, sexual orientation, nationality, religion, or
religious affiliation. 
   (3) (A) Little League, Bobby Sox, Boy Scouts, Cub Scouts, Girl
Scouts, Campfire, Inc., Young Men's Christian Association, Young
Women's Christian Association, Future Farmers of America, Future
Homemakers of America, 4-H Clubs, Distributive Education Clubs of
America, Future Business Leaders of America, Vocational Industrial
Clubs of America, Collegiate Young Farmers, Boys' Clubs, Girls'
Clubs, Special Olympics, Inc., American Youth Soccer Organization,
California Youth Soccer Association, North, California Youth Soccer
Association, South, and Pop Warner football.  
   (B) An organization listed above shall not discriminate on the
basis of gender identity, race, sexual orientation, nationality,
religion, or religious affiliation.  
   (3) (A) Any of the following organizations that does not
discriminate on the basis of gender identity, race, sexual
orientation, nationality, religion, or religious affiliation: 

   (B) Little League, Bobby Sox, Boy Scouts, Cub Scouts, Girl Scouts,
Campfire, Inc., Young Men's Christian Association, Young Women's
Christian Association, Future Farmers of America, Future Homemakers
of America, 4-H Clubs, Distributive Education Clubs of America,
Future Business Leaders of America, Vocational Industrial Clubs of
America, Collegiate Young Farmers, Boys' Clubs, Girls' Clubs, Special
Olympics, Inc., American Youth Soccer Organization, California Youth
Soccer Association, North, California Youth Soccer Association,
South, and Pop Warner football. 
   (c)  (1)    For purposes of this section,
"irregular or intermittent" means associated directly with a
particular event, such as fairs, galas, parades, scout-a-ramas,
games, and similar activities. That term includes refreshment stands
or booths that are utilized at scheduled events of organized leagues,
but does not include storefront or mobile retail outlets which
ordinarily require local business licenses. 
   (2) For purposes of this section, an organization discriminates on
the basis of gender identity, race, sexual orientation, nationality,
religion, or religious affiliation if the organization either has a
formal policy of discrimination or refuses to provide to the board
written assurance of a formal policy barring discrimination based on
a category listed above.  
   (d) The amendments to this section by the act adding this
subdivision shall become operative on the first day of the first
calendar quarter commencing more than 90 days after the effective
date of this act.  
  SEC. 2.    Section 23701d of the Revenue and
Taxation Code is amended to read:
   23701d.  (a) A corporation, community chest or trust, organized
and operated exclusively for religious, charitable, scientific,
testing for public safety, literary, or educational purposes, or to
foster national or international amateur sports competition (but only
if no part of its activities involved the provision of athletic
facilities or equipment), or for the prevention of cruelty to
children or animals, no part of the net earnings of which inures to
the benefit of any private shareholder or individual, no substantial
part of the activities of which is carrying on propaganda or
otherwise attempting to influence legislation, (except as otherwise
provided in Section 23704.5), and which does not participate in, or
intervene in (including the publishing or distribution of
statements), any political campaign on behalf of (or in opposition
to) any candidate for public office. An organization is not organized
exclusively for exempt purposes listed above unless its assets are
irrevocably dedicated to one or more purposes listed in this section.
Dedication of assets requires that in the event of dissolution of an
organization or the impossibility of performing the specific
organizational purposes the assets would continue to be devoted to
exempt purposes. Assets shall be deemed irrevocably dedicated to
exempt purposes if the articles of organization provide that upon
dissolution the assets will be distributed to an organization which
is exempt under this section or Section 501(c)(3) of the Internal
Revenue Code or to the federal government, or to a state or local
government for public purposes; or by a provision in the articles of
organization, satisfactory to the Franchise Tax Board; that the
property will be distributed in trust for exempt purposes; or by
establishing that the assets are irrevocably dedicated to exempt
purposes by operation of law. The irrevocable dedication requirement
shall not be a sole basis for revocation of an exempt determination
made by the Franchise Tax Board prior to the effective date of this
amendment.
   (b) (1) In the case of a qualified amateur sports organization--
   (A) The requirement of subdivision (a) that no part of its
activities involves the provision of athletic facilities or equipment
shall not apply.
   (B) That organization shall not fail to meet the requirements of
subdivision (a) merely because its membership is local or regional in
nature.
   (2) For purposes of this subdivision, "qualified amateur sports
organization" means any organization organized and operated
exclusively to foster national or international amateur sports
competition if that organization is also organized and operated
primarily to conduct national or international competition in sports
or to support and develop amateur athletes for national or
international competition in sports.
   (c) (1) Notwithstanding subdivisions (a), (b), and (c) of Section
23701, an organization organized and operated for nonprofit purposes
in accordance with this section shall be exempt from taxes imposed by
this part, except as provided in this article or in Article 2
(commencing with Section 23731), upon its submission to the Franchise
Tax Board of one of the following:
   (A) A copy of the determination letter or ruling issued by the
Internal Revenue Service recognizing the organization's exemption
from federal income tax under Section 501(a) of the Internal Revenue
Code, as an organization described in Section 501(c)(3) of the
Internal Revenue Code.
   (B) A copy of the group exemption letter issued by the Internal
Revenue Service that states that both the central organization and
all of its subordinates are tax-exempt under Section 501(c)(3) of the
Internal Revenue Code and substantiation that the organization is
included in the federal group exemption letter as a subordinate
organization.
   (2) Upon receipt of the documents required in subparagraph (A) or
(B) of paragraph (1), the Franchise Tax Board shall issue an
acknowledgment that the organization is exempt from taxes imposed by
this part, except as provided in this article or in Article 2
(commencing with Section 23731). The acknowledgment may refer to the
organization's recognition by the Internal Revenue Service of
exemption from federal income tax as an organization described in
Section 501(c)(3) of the Internal Revenue Code and, if applicable,
the organization's subordinate organization status under a federal
group exemption letter. The effective date of an organization's
exemption from state income tax pursuant to this subdivision shall be
no later than the effective date of the organization's recognition
of exemption from federal income tax as an organization described in
Section 501(c)(3) of the Internal Revenue Code, or its status as a
subordinate organization under a federal group exemption letter, as
applicable.
   (3) If, for federal income tax purposes, an organization's
exemption from tax as an organization described in Section 501(c)(3)
of the Internal Revenue Code is suspended or revoked, the
organization shall notify the Franchise Tax Board of the suspension
or revocation, in the form and manner prescribed by the Franchise Tax
Board. Upon notification, the board shall suspend or revoke,
whichever is applicable, for state income tax purposes, the
organization's exemption under paragraph (1) of this subdivision.
   (4) (A) This subdivision shall not be construed to prevent the
Franchise Tax Board from revoking the exemption of an organization
that is not organized or operated in accordance with this chapter or
Section 501(c)(3) of the Internal Revenue Code.
   (B) This subdivision shall not prevent the Franchise Tax Board
from confirming that an organization is in compliance with
subdivision (d) prior to issuing an acknowledgment described in
paragraph (2).
   (5) If the Franchise Tax Board suspends or revokes the exemption
of an organization pursuant to paragraph (3) or subparagraph (A) of
paragraph (4), the exemption shall be reinstated only upon compliance
with Section 23701, regardless of whether the organization can
establish exemption under paragraph (1).
   (d) (1) Notwithstanding any other law, an organization organized
and operated exclusively as a public charity youth organization that
discriminates on the basis of gender identity, race, sexual
orientation, nationality, religion, or religious affiliation shall
not be exempt from taxes imposed by this part.
   (2) For purposes of this subdivision, a "public charity youth
organization" includes, but is not limited to, those organizations
listed in subparagraph (A) of paragraph (3) of subdivision (b) of
Section 6361.
   (e) The Franchise Tax Board may prescribe rules and regulations to
implement this section. 
   SEC. 2.    Section 23701.3 is added to the  
Revenue and Taxation Code   , to read:  
   23701.3.  (a) Notwithstanding any other law, for each taxable year
beginning on or after January 1, 2014, an organization organized and
operated for nonprofit purposes in accordance with Section 23701d
that is a public charity youth organization that discriminates on the
basis of gender identity, race, sexual orientation, nationality,
religion, or religious affiliation shall not be exempt from taxes
imposed by this part.
   (b) For purposes of this section:
   (1) A "public charity youth organization" includes, but is not
limited to, those organizations listed in subparagraph (A) of
paragraph (3) of subdivision (b) of Section 6361.
   (2) A public charity youth organization discriminates on the basis
of gender identity, race, sexual orientation, nationality, religion,
or religious affiliation if the organization either has a formal
policy of discrimination or refuses to provide to the Franchise Tax
Board written assurance of a formal policy barring discrimination
based on a category listed above.
   (c) Subdivision (c) of Section 23701d, as that section read on
January 1, 2013, or its successor, shall not prevent the Franchise
Tax Board from confirming that a public charity youth organization is
in compliance with subdivision (a) prior to issuing an
acknowledgment that the organization is exempt from the taxes imposed
by this part.
   (d) If the Franchise Tax Board suspends or revokes the exemption
of an organization pursuant to paragraph (3) of subdivision (c) of
Section 23701d, or its successor, or subdivision (c), the exemption
shall be reinstated only upon compliance with Section 23701,
regardless of whether the organization can establish an exemption
under paragraph (1) of subdivision (c) of Section 23701d, as that
section read on January 1, 2013, or its successor. 
  SEC. 3.  This bill would take effect immediately as a tax levy.
                       
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