Bill Text: CA AB816 | 2013-2014 | Regular Session | Amended
Bill Title: Sales and use taxes: exemption: public utility: energy efficiency program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2014-08-13 - From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on RLS. [AB816 Detail]
Download: California-2013-AB816-Amended.html
BILL NUMBER: AB 816 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 13, 2014
AMENDED IN SENATE JUNE 12, 2014
AMENDED IN SENATE MARCH 6, 2014
INTRODUCED BY Assembly Member Hall
FEBRUARY 21, 2013
An act to amend Sections 25000.2 and 25500.1 of, and to
repeal Section 25502.1 of, the Business and Professions Code,
relating to alcoholic beverages. An act to add Section
6371.5 of the Revenue and Taxation Code, relating to taxation, to
take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 816, as amended, Hall. Alcoholic beverages.
Sales and use taxes: exemption: public utility: energy
efficiency program.
Existing sales and use tax laws impose a tax on retailers measured
by the gross receipts from the sale of tangible personal property
sold at retail in this state, or on the storage, use, or other
consumption in this state of tangible personal property purchased
from a retailer for storage, use, or other consumption in this state,
as measured by sales price. Those laws provides various exemptions
from those taxes.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electric corporations and
gas corporations, while a local public owned electric utility is
under the direction of its governing board. Existing law authorizes
the commission to fix the rates and charges for every public utility,
and requires that those rates and charges be just and reasonable.
Existing law requires the commission to establish a program of
assistance to low-income electric and gas customers, referred to as
the California Alternate Rates for Energy (CARE) program. The CARE
program provides lower rates to low-income customers. Eligibility for
the CARE program is for those electric and gas customers with annual
household incomes that are no greater than 200% of the federal
poverty guideline levels.
This bill would exempt from those taxes the gross receipts
from the sale in this state of, and the storage, use, or other
consumption in this state of, an energy or water efficient home
appliance, as defined, purchased by a public utility that are
provided at no cost to a participant in an energy
efficiency program.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes
counties and cities to impose local sales and use taxes in conformity
with the Sales and Use Tax Law, and existing law authorizes
districts, as specified, to impose transactions and use taxes in
accordance with the Transactions and Use Tax Law, which conforms to
the Sales and Use Tax Law. Amendments to state sales and use taxes
are incorporated into these laws.
Section 2230 of the Revenue and Taxation Code provides that the
state will reimburse counties and cities for revenue losses caused by
the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse any local agencies for sales and use tax revenues
lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.
(1) The Alcoholic Beverage Control Act authorizes a licensed beer
manufacturer that produces more than 60,000 barrels of beer a year to
manufacture cider or perry, as defined, at the licensed premises of
production and to sell cider or perry to any licensee authorized to
sell wine. Further, under existing law, if a successor beer
manufacturer, as defined, acquires the rights to manufacture, import,
or distribute a product, defined as a brand or brands of beer, and
then cancels the distribution rights of an existing beer wholesaler,
as defined, the successor beer manufacturer is required to notify the
existing beer wholesaler of his or her intent to cancel those
rights. Existing law also requires the existing beer wholesaler to
continue to distribute the product to at least the same extent that
it distributed the product immediately before the successor beer
manufacturer acquired rights to the product until receipt of the
payment of the specified compensation is made or awarded. The act
provides that a violation of its provisions is a misdemeanor, unless
otherwise specified.
This bill would redefine "product" to also include cider or perry
that a beer manufacturer has designated a beer wholesaler to
distribute in a specific territory. By changing the definition of a
crime, the bill would impose a state-mandated local program.
(2) The Alcoholic Beverage Control Act contains limitations on
sales commonly known as "tied-house" restrictions, which generally
prohibit a manufacturer, winegrower, manufacturer's agent, California
winegrower's agent, rectifier, distiller, bottler, importer, or
wholesaler from furnishing, giving, or lending any money or other
thing of value to any person engaged in operating, owning, or
maintaining any off-sale licensed premises. For purposes of these
provisions, the listing of the names, addresses, telephone numbers,
or email addresses, or Internet Web site addresses, of 2 or more
unaffiliated off-sale retailers selling beer, wine, or distilled
spirits and operating and licensed as bona fide public eating places
selling the beer, wine, or distilled spirits produced, distributed,
or imported by a nonretail industry member in response to a direct
inquiry from a consumer, as specified, does not constitute a thing of
value or prohibited inducement to the listed off-sale retailer, if
specified conditions are met.
Existing law includes similar provisions applicable to on-sale
licensed premises, except that those provisions also extend the
above-described exception to other forms of electronic media.
This bill would delete the above exceptions that apply
specifically to off-sale licensed premises and instead would include
off-sale licensed premises within the exceptions previously
applicable only to on-sale licensed premises.
(3) 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.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6371.5 is added to the
Revenue and Taxation Code , to read:
6371.5. (a) There are exempted from the taxes imposed by this
part the gross receipts from the sale of, and the storage and use of,
or other consumption in this state of an energy or water efficient
home appliance purchased by a public utility that is provided at no
cost to a participant in a federal, state, or ratepayer-funded energy
efficiency program for use by that participant in the energy
efficiency program.
(b) For purposes of this section:
(1) "Energy or water efficient home appliance" means an appliance
that meets performance requirements under the ENERGY STAR program,
established pursuant to Section 6294a of Title 42 of the United
States Code, or a similarly labeled refrigerator, dishwasher, washer,
dryer, or other appliance with a Tier I equivalent or better energy
efficiency rating.
(2) "Public utility" means an entity defined in Section 216 or
224.3 of the Public Utilities Code.
SEC. 2. Notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made by this act and
the state shall not reimburse any local agency for any sales and use
tax revenues lost by it under this act.
SEC. 3. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.
SECTION 1. Section 25000.2 of the Business and
Professions Code is amended to read:
25000.2. (a) For purposes of this section:
(1) "Acquire" means to purchase, receive, assume, obtain, or
otherwise come into possession or control of.
(2) "Affected distribution rights" means the distribution rights
to the product held by the existing beer wholesaler before the
acquisition of the right to manufacture, import, or distribute the
product by the successor beer manufacturer.
(3) "Beer manufacturer" includes any holder of a beer manufacturer'
s license, any holder of an out-of-state beer manufacturer's
certificate, or any holder of a beer and wine importer's general
license.
(4) "Cancel" means to terminate, reduce, not renew, not appoint or
reappoint, or cause any of the same.
(5) "Existing beer wholesaler" means a beer wholesaler that
distributes a product at the time a successor beer manufacturer
acquires the rights to manufacture, import, or distribute that
product.
(6) "Fair market value" includes all elements of value, including,
but not limited to, goodwill.
(7) "Product" means a brand or brands of beer, as defined by
Section 23006, and any brand or brands of cider or perry that a beer
manufacturer has designated a beer wholesaler to distribute in a
specific territory.
(8) "Successor beer manufacturer" means a beer manufacturer that
acquires the rights to manufacture, import, or distribute a product.
(9) "Successor beer manufacturer's designee" means one or more
distributors designated by the successor beer manufacturer to replace
the existing beer wholesaler, for all or part of the existing beer
wholesaler's territory, in the distribution of the product.
(b) (1) Any successor beer manufacturer that acquires the rights
to manufacture, import, or distribute a product, and who cancels any
of the existing beer wholesaler's rights to distribute the product,
shall comply with this section.
(2) A successor beer manufacturer's designee shall comply with
this section.
(c) (1) The successor beer manufacturer shall notify the existing
beer wholesaler of the successor beer manufacturer's intent to cancel
any of the existing beer wholesaler's rights to distribute the
product.
(2) The successor beer manufacturer shall mail the notice by
certified mail, return receipt requested, to the existing beer
wholesaler. The successor beer manufacturer shall include in the
notice the name, address, and telephone number of the successor beer
manufacturer's designee or designees.
(d) The successor beer manufacturer's designee shall negotiate
with the existing beer wholesaler to determine the fair market value
of the affected distribution rights and, if the existing beer
wholesaler and the successor beer manufacturer's designee agree to
the fair market value of the affected distribution rights, shall
compensate the existing beer wholesaler in the agreed amount. The
successor beer manufacturer's designee and the existing beer
wholesaler shall negotiate in good faith.
(e) The existing beer wholesaler shall continue to distribute the
product to at least the same extent that it distributed the product
immediately before the successor beer manufacturer acquired rights to
the product until receipt of the payment of the compensation agreed
to under subdivision (d) is made or is awarded under subdivision (f).
The successor beer manufacturer and the existing beer wholesaler
shall act in good faith regarding the ongoing supply and distribution
of the product.
(f) If the successor beer manufacturer's designee and the existing
beer wholesaler are unable to mutually agree on the fair market
value of the affected distribution rights within 30 days of the
existing beer wholesaler's receipt of the successor beer manufacturer'
s notice pursuant to subdivision (c), the successor beer manufacturer'
s designee or the existing beer wholesaler shall initiate arbitration
against each other to determine the issue of compensation for the
fair market value of the affected distribution rights no later than
40 days after the existing beer wholesaler's receipt of the successor
beer manufacturer's notice pursuant to subdivision (c). Upon
submission to arbitration, the arbitration shall be the means of
determining compensation to the existing beer wholesaler for the fair
market value of the affected distribution rights, and the fair
market value of the affected distribution rights shall be the purpose
of the arbitration unless the parties agree otherwise.
(1) An arbitration held under this subdivision shall be held in
California through a private arbitration services provider with at
least three offices in California and a statewide roster of at least
70 neutral arbitrators, of which at least 30 have prior experience as
a sole arbitrator in franchise, distribution, or related business
litigation.
(2) The direct costs of the arbitration, including any fees
charged by the arbitrator, shall be borne equally by the parties
engaged in the arbitration. All other costs shall be paid by the
party incurring them.
(3) The parties shall mutually agree on an arbitrator. If the
parties cannot agree on the arbitrator, the arbitration provider
shall select an impartial arbitrator.
(4) (A) No later than 20 days after receipt of a notification to
arbitrate, the parties shall complete an initial exchange of all
nonprivileged documents and other information relevant to the fair
market value of the affected distribution rights in their possession
and control, including, without limitation, copies of all documents
and the names of individuals who may be called to testify at the
arbitration hearing. No later than 45 days after receipt of
notification to arbitrate, the parties shall complete an exchange of
the names of any experts who may be called to testify at the
arbitration hearing, together with each expert's report that may be
introduced at the arbitration hearing.
(B) The arbitrator may modify the requirements of subparagraph (A)
on a showing of good cause. The arbitrator shall permit third-party
discovery and additional discovery between beer wholesalers,
including depositions, which the arbitrator finds appropriate for a
period of time not to exceed 90 days after receipt of a notification
to arbitrate. No discovery shall be permitted against a beer
manufacturer.
(5) The decision of the arbitrator shall be final and binding on
the parties unless notice of appeal is filed, within 10 business days
after service of the arbitration award, with the superior court of
the county in which the hearing was held. Upon filing of the appeal,
the court shall review the arbitration award for errors of fact or
law by determining whether the award is supported by the sufficiency
of the evidence presented at the arbitration. This subdivision shall
further permit any other appeal or review that is authorized by Title
9 (commencing with Section 1280) of Part 3 of the Code of Civil
Procedure, which governs arbitration.
(6) The arbitrator's award shall be monetary only and shall not
enjoin or compel conduct.
(7) The arbitration hearing shall conclude not more than 180 days
after receipt of a notification to arbitrate, unless the time period
is extended by mutual agreement of the parties or by the arbitrator.
(8) The arbitrator shall render a decision not later than 15 days
after the conclusion of the arbitration unless this time period is
extended by mutual agreement of the parties or by the arbitrator.
(9) A party who fails to participate in the arbitration hearings
waives all rights the party would have had in the arbitration and is
considered to have consented to the determination of the arbitrator.
(10) The Legislature finds and declares that several unique
factors in combination warrant the Legislature authorizing limited
mandatory arbitration between an existing beer wholesaler and a
successor beer manufacturer's designee solely to determine the issue
of compensation for the fair market value of the affected
distribution rights:
(A) On the issue of the fair market value of the affected
distribution rights, the parties are sophisticated and in an equal
position in their knowledge of this legal issue and understand the
law and their legal rights, including their jury trial rights.
(B) The parties desire a mandatory arbitration provision to
resolve the question of compensation for the fair market value of the
affected distribution rights if the parties are not able to reach a
mutual settlement so that product distribution can be continued in an
orderly manner and the determination of compensation can be made in
a timely manner.
(C) The state's regulatory interest in maintaining orderly markets
for the safe and efficient transportation, distribution, and sale of
beer within the state warrants the statutory authorization for
mandatory arbitration as provided in this section.
(g) If the existing beer wholesaler does not receive payment of
the compensation under subdivision (d) or (f) not later than 10
business days after the date of the settlement or service of the
arbitration award, and if there is no appeal or review filed under
paragraph (5) of subdivision (f), the existing beer wholesaler shall
remain the distributor of the product in the existing beer wholesaler'
s territory to at least the same extent that the existing beer
wholesaler distributed the product immediately before the successor
beer manufacturer acquired rights to the product, and the existing
beer wholesaler is not entitled to the settlement or arbitration
award.
(h) Nothing in this section shall be construed to limit or
prohibit good faith settlements voluntarily entered into by the
parties subsequent to the successor beer manufacturer's notice
pursuant to subdivision (c).
SEC. 2. Section 25500.1 of the Business and
Professions Code is amended to read:
25500.1. (a) The listing of the names, addresses, telephone
numbers, email addresses, or Internet Web site addresses, or other
electronic media, of two or more unaffiliated on-sale or off-sale
retailers selling beer, wine, or distilled spirits produced,
distributed, or imported by a nonretail industry member in response
to a direct inquiry from a consumer received by telephone, by mail,
by electronic inquiry, or in person does not constitute a thing of
value or prohibited inducement to the listed on-sale or off-sale
retailer, provided all of the following conditions are met:
(1) The listing does not also contain the retail price of the
product.
(2) The listing is the only reference to the on-sale or off-sale
retailers in the direct communication.
(3) The listing does not refer only to one on-sale retailer or
only to on-sale or off-sale retail establishments controlled directly
or indirectly by the same retailer.
(4) The listing is made by, or produced by, or paid for,
exclusively by the nonretail industry member making the response.
(b) For the purposes of this section, "nonretail industry member"
is defined as a manufacturer, including, but not limited to, a beer
manufacturer, winegrower, or distiller of alcoholic beverages or an
agent of that entity, or a wholesaler, regardless of any other
licenses held directly or indirectly by that person.
SEC. 3. Section 25502.1 of the Business and
Professions Code is repealed.
SEC. 4. 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.
