Today's Law As Amended

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AB-405 Sales and use taxes: exemption: water treatment.(2019-2020)



SECTION 1.

 Section 6353 of the Revenue and Taxation Code is amended to read:

6353.
 There are exempted from the taxes imposed by this part the gross receipts derived from the sales, furnishing, or service of and the storage, use, or other consumption in this state of, all of the following:
(a) Gas, electricity, and water, including steam and geothermal steam, brines, and heat, when delivered to consumers through mains, lines, or pipes. This exemption includes chemicals and other agents used by a city, county, public utility, and sanitation district to treat water, recycled water, or wastewater, regardless of whether the chemicals and other agents become a component part thereof, and regardless of whether the treatment takes place before or after the delivery to consumers. 
(b) (1) Liquefied petroleum gas, delivered to a qualified residence by the seller, that is sold for household use in the qualified residence, or liquefied petroleum gas that is purchased for use by a qualified person to be used in producing and harvesting agricultural products; provided, in either case, the liquefied petroleum gas is delivered into a tank with a storage capacity for liquefied petroleum gas that is equal to or greater than 30 gallons. This subdivision may not be construed to provide any exemption from any tax levied by a city, county, or city and county pursuant to Section 7284.3, or any successor to that section.
(2) For purposes of this subdivision:
(A) “Qualified residence” means a primary residence, not serviced by gas mains and pipes.
(B) “Qualified person” means any person engaged in a line of business described in Codes 0111 to 0291, inclusive, of the Standard Industrial Classification Manual published by the United States Office of Management and Budget, 1987 Edition, and any other person that assists that person in the lines of business described in this paragraph in producing and harvesting agricultural products.
(c) Water, when sold to an individual in bulk quantities of 50 gallons or more, for general household use in his or her  the individual’s  residence if the residence is located in an area not serviced by mains, lines, or pipes.
(d) Exhaust steam, waste steam, heat, or resultant energy, produced in connection with cogeneration technology, as defined in Section 25134 of the Public Resources Code.
(e) The exemptions provided by subdivision (b) shall be effective starting September 1, 2001.
(f) The amendments made by the act adding this subdivision shall be operative on and after January 1, 2020, and before January 1, 2025.
SEC. 2.
 (a) It is the intent of the Legislature to apply the requirements of Section 41 of the Revenue and Taxation Code to this act. In this connection, the Legislature finds and declares all of the following:
(1) The goal of this act in amending Section 6353 to the Revenue and Taxation Code is to encourage water reuse and to promote water recycling and related technologies by lowering the economic costs of water reuse through a modest sales tax exemption for the sale of chemicals and other agents used by a city, county, public utility, of sanitation district to treat water, recycled water, or wastewater.
(2) The Legislature will measure the success of this act in meeting that goal by evaluating the overall increase in recycled water recovery in future years by cities, counties, public utilities, and sanitation districts, especially by those entities that have significant amounts of recycled water. In its evaluation, the Legislature should assign an inflationary or population factor and then look at recycled water recovery beyond that baseline and attribute that increase in recycled water recovery to the lower costs of recycled water due to the sales and use tax exemption provided by Section 6353 of the Revenue and Taxation Code, as amended by this act.
(3) The Legislature may also look into any increases in the cost of water as reported by the Public Utilities Commission or in available information from cities, counties, public utilities, and sanitation districts.
(b) To assist the Legislature in determining whether the sales and use tax exemption provided by Section 6353 of the Revenue and Taxation Code, as amended by this act, is meeting the goals specified in subdivision (a), beginning on or before March 1, 2021, and on or before March 1 every year thereafter until March 1, 2025, the California Department of Tax and Fee Administration shall calculate and report to the Legislature the aggregate amount of exemptions provided by Section 6353 of the Revenue and Taxation Code, as amended by this act, in the previous calendar year. Any report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 3.
 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. 4.
 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.