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SB-655 Sales and use taxes: exemption: diabetic supplies.(2009-2010)

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SB655:v96#DOCUMENT

Amended  IN  Assembly  September 04, 2009
Amended  IN  Senate  May 20, 2009
Amended  IN  Senate  April 29, 2009

CALIFORNIA LEGISLATURE— 2009–2010 REGULAR SESSION

Senate Bill
No. 655

Introduced  by  Senator Padilla

February 27, 2009

An act to amend Section 345.5 of the Public Utilities Code, relating to energy. An act to amend Section 6369 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 655, as amended, Padilla. Independent System Operator: transmission facilities. Sales and use taxes: exemption: diabetic supplies.
The Sales and Use Tax Law imposes 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. That law provides various exemptions from that tax, including an exemption for insulin and insulin syringes furnished by a registered pharmacist to a person for treatment of diabetes as directed by a physician.
This bill would expand this exemption to be applicable to insulin, insulin syringes, skin puncture lancets, and glucose test strips furnished by a registered pharmacist or any retailer, as provided.
Counties and cities are authorized to impose local sales and use taxes, and districts, as defined, are authorized to impose transactions and use taxes, in conformity with state sales and use taxes. Exemptions from state sales and use taxes enacted by the Legislature are incorporated into these taxes.
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 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, but its operative date would depend on its effective date.

The Public Utilities Act requires the Independent System Operator, a nonprofit public benefit corporation created pursuant to law, to ensure efficient use and reliable operation of the state’s electricity transmission grid. The operator is required to manage the transmission grid and related energy markets in a manner consistent with applicable state laws intended to protect the public’s health and the environment. The operator is also required to consult and coordinate with state and local agencies to ensure that the operator operates in furtherance of state laws regarding consumer and environmental protection.

This bill would specify that those state laws regarding consumer and environmental protection include, but are not limited to, the California Renewables Portfolio Standard Program and the California Global Warming Solutions Act of 2006.

The bill would require the operator to appear annually before appropriate policy committees of the Legislature to report on the operator’s activities. The bill also would declare legislative intent that the operator ensure that the transmission grid is secure from unauthorized intrusion.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NOYES  

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


SECTION 2.

 Section 6369 of the Revenue and Taxation Code is amended to read:

6369.
 (a) There are exempted from the taxes imposed by this part the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, medicines:
(1) Prescribed for the treatment of a human being by a person authorized to prescribe the medicines, and dispensed on prescription filled by a registered pharmacist in accordance with law.
(2) Furnished by a licensed physician and surgeon, dentist, or podiatrist to his or her own patient for treatment of the patient.
(3) Furnished by a health facility for treatment of any person pursuant to the order of a licensed physician and surgeon, dentist, or podiatrist.
(4) Sold to a licensed physician and surgeon, podiatrist, dentist, or health facility for the treatment of a human being.
(5) Sold to this state or any political subdivision or municipal corporation thereof, for use in the treatment of a human being; or furnished for the treatment of a human being by a medical facility or clinic maintained by this state or any political subdivision or municipal corporation thereof.
(6) Furnished without charge by a pharmaceutical manufacturer or distributor to a licensed physician, surgeon, dentist, podiatrist, or health facility for the treatment of a human being, or furnished by a pharmaceutical manufacturer or distributor without charge to an institution of higher education for instruction or research, provided that the exemption provided in this paragraph is limited to medicines of a type that can be dispensed only (A) for the treatment of a human being and (B) pursuant to prescriptions issued by persons authorized to prescribe medicines. The exemption provided in this paragraph shall include the materials used to package, and the constituent elements and ingredients used to produce, the medicines described in this paragraph and is intended to preclude any imposition of tax pursuant to Section 6094 or 6095 with respect to those materials, elements, and ingredients.
(b) “Medicines” as used in this section, means any substance or preparation intended for use by external or internal application to the human body in the diagnosis, cure, mitigation, treatment, or prevention of disease and commonly recognized as a substance or preparation intended for that use. However, “medicines” does not include any of the following:
(1) Any auditory, prosthetic, ophthalmic, or ocular device or appliance.
(2) Articles that are in the nature of splints, bandages, pads, compresses, supports, dressings, instruments, apparatus, contrivances, appliances, devices, or other mechanical, electronic, optical, or physical equipment or article or the component parts and accessories thereof.
(3) Any alcoholic beverage the manufacture, sale, purchase, possession, or transportation of which is licensed and regulated by the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code).
(c) Notwithstanding subdivision (b), “medicines” as used in this section means and includes any of the following:
(1) Sutures, whether or not permanently implanted.
(2) Bone screws, bone pins, pacemakers, and other articles, other than dentures, permanently implanted in the human body to assist the functioning of any natural organ, artery, vein, or limb and which remain or dissolve in the body.
(3) (A) Orthotic devices, other than orthodontic devices, designed to be worn on the person of the user as a brace, support, or correction for the body structure, and replacement parts for these devices. However, orthopedic shoes and supportive devices for the foot are not exempt unless they are custom-made biomechanical foot orthoses or are an integral part of a leg brace or artificial leg.
(B) For purposes of this paragraph, “custom-made biomechanical foot orthoses” means an individually prescribed foot orthosis which is custom fabricated over a neutral or near neutral subtalar joint with a pronated midtarsal joint position positive plaster model of the patient’s foot, which model, when the cast is modified to support the osseous position of the forefoot in relationship to the rearfoot, embodies the angular osseous relationships of the anterior and posterior portions of the foot.
(4) Prosthetic devices, and replacement parts for those devices, designed to be worn on or in the person of the user to replace or assist the functioning of a natural part of the human body, other than auditory, ophthalmic, and ocular devices or appliances, and other than dentures, removable or fixed bridges, crowns, caps, inlays, artificial teeth, and other dental prosthetic materials and devices.
(5) Artificial limbs and eyes, or their replacement parts, for human beings.
(6) Programmable drug infusion devices to be worn on or implanted in the human body.
(d) “Health facility” as used in this section has the meaning ascribed to it in Section 1250 of the Health and Safety Code, and also includes any “clinic” as defined in Section 1200 of the Health and Safety Code.
(e) Insulin and, insulin syringes, skin puncture lancets, and glucose strips furnished by a registered pharmacist or any retailer to a person for treatment of diabetes as directed by a physician shall be deemed to be dispensed on prescription within the meaning of this section.
(f) Orthotic and prosthetic devices, and replacement parts for these devices, furnished pursuant to the written order of a physician or podiatrist, shall be deemed to be dispensed on prescription within the meaning of paragraph (1) of subdivision (a), whether or not the devices are furnished by a registered pharmacist.
(g) Mammary prostheses, and any appliances and related supplies necessary as the result of any surgical procedure by which an artificial opening is created in the human body for the elimination of natural waste, shall be deemed to be dispensed on prescription within the meaning of this section.

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. However, the provisions of this act shall become operative on the first day of the first calendar quarter commencing more than 90 days after the effective date of this act.
SECTION 1.

The Legislature finds and declares the following:

(a)The deployment of smart grid technology creates additional opportunities for unauthorized persons or entities to impact the transmission grid.

(b)Because uninterrupted and reliable electric service is a matter of public health and safety, and is necessary for the conduct of commerce, it is the intent of the Legislature that the Independent System Operator take all necessary steps to ensure that the transmission grid is secure from intrusion by unauthorized persons or entities.

SEC. 2.Section 345.5 of the Public Utilities Code is amended to read:
345.5.

(a)The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.

(b)To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:

(1)Making the most efficient use of available energy resources. For purposes of this section, “available energy resources” include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. “Available energy resources” do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.

(2)Reducing, to the extent possible, overall economic cost to the state’s consumers.

(3)Maximizing availability of existing electric generation resources necessary to meet the needs of the state’s electricity consumers.

(c)The Independent System Operator shall do all of the following:

(1)Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection, including, but not limited to, the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)) and the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code).

(2)Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.

(3)Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meetings Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operator’s Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meetings Act than its policy in effect as of May 1, 2002.

(4)Provide public access to corporate records consistent with the general policies of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operator’s Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.

(5)Appear annually before the appropriate policy committees of the Senate and the Assembly to report on the Independent System Operator’s activities.