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SB-624 Qualified medical supplies providers: sales taxes: repayment. (2019-2020)

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Date Published: 05/07/2019 09:00 PM
SB624:v97#DOCUMENT

Amended  IN  Senate  May 07, 2019
Amended  IN  Senate  April 25, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 624


Introduced by Senator Wilk

February 22, 2019


An act to add Section 6836 to the Revenue and Taxation Code, relating to medical supplies, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


SB 624, as amended, Wilk. Qualified medical supplies providers: sales taxes: repayment.
Existing state sales and use tax laws impose a tax on retailers measured by gross receipts on 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.
This bill would provide a procedure for a qualified medical supplies provider to submit a claim for qualified repayments, as defined, with the California Department of Tax and Fee Administration, as provided. The bill would define a qualified medical supplies provider to mean a pharmacy or durable medical equipment provider enrolled in Medi-Cal who, among other things, paid sales taxes imposed under the Sales and Use Tax Law and the California Constitution for sales of medical supplies or equipment furnished to Medi-Cal beneficiaries occurring during the period beginning June 1, 2011, and before November 1, 2013, for which a portion of payments from Medi-Cal for those sales, which included applicable sales tax reimbursement, was paid back to the State Department of Health Care Services by the pharmacy or durable medical equipment provider due to the reduction of Medi-Cal payment by specified law.
This bill would, on or before March 1, 2021, require the California Department of Tax and Fee Administration to pay the amount of qualified repayments to each qualified medical supplies provider, and would appropriate an amount necessary $1,000,000 from the General Fund to the department to make the payments of qualified repayments. The bill would provide that the total amount of money available to make qualified repayments shall not exceed the aggregate amount paid to the State Department of Health Care Services, as described above.
This bill would make findings regarding the public purpose served by the 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.

 Section 6836 is added to the Revenue and Taxation Code, to read:

6836.
 (a) A qualified medical supplies provider may receive from the state a qualified repayment if all of the provisions of this section are satisfied.
(b) For purposes of this section, all of the following definitions shall apply:
(1) “Department” means the California Department of Tax and Fee Administration.
(2) “Qualified medical supplies provider” means a pharmacy or durable medical equipment provider enrolled in Medi-Cal who meets all of the following requirements:
(A) The pharmacy or durable medical equipment provider furnished medical supplies or equipment to Medi-Cal beneficiaries as a Medi-Cal provider and had its reimbursement payments from Medi-Cal for those medical supplies or equipment reduced pursuant to Chapter 3 of the Statutes of 2011.
(B) The pharmacy or provider paid to the State Board of Equalization sales taxes imposed under the Sales and Use Tax Law (Part 1 (commencing with Section 6001)), and Sections 35 and 36 of Article XIII of the California Constitution on the gross receipts from the sales of medical supplies or equipment furnished to Medi-Cal beneficiaries occurring during the period beginning June 1, 2011, and before November 1, 2013, for which a portion of payments from Medi-Cal for those sales, which included applicable sales tax reimbursement, was paid back to the State Department of Health Care Services by the pharmacy or durable medical equipment provider due to the reduction of Medi-Cal payment by Chapter 3 of the Statutes of 2011.
(3) “Qualified repayment” means an amount equal to the amount of sales tax reimbursement paid back to the State Department of Health Care Services by the qualified medical supplies provider described in subparagraph (B) of paragraph (2), less any amounts previously refunded, credited, or paid to a qualified medical supplies provider through any means whatsoever.
(c) (1) Before January 1, 2021, March 1, 2020, a qualified medical supplies provider may file a claim for a qualified repayment with the California Department of Tax and Fee Administration.
(2) The claim shall be in writing, and shall be completed in accordance with any instructions or regulations as the department may prescribe, including, but not limited to, proof of payment of the tax described in subparagraph (B) of paragraph (2) of subdivision (b).
(3) The department shall work with representatives of a qualified medical supplies provider to establish the information and documentation necessary to process a claim for repayment using information available to the qualified medical supplies provider from the Medi-Cal program.
(4) On or before March 1, 2021, the department shall pay the amount of qualified repayments to each qualified medical supplies provider pursuant to this section. The total amount of money available to make qualified repayments shall not exceed an amount equal to the aggregate amount of qualified repayments paid to the State Department of Health and Care Services. If the total amount of claims filed exceeds the amount appropriated or the amount appropriated is less than the aggregate amount of qualified repayments received by the State Department of Health and Care Services, the department shall determine the pro rata share due to each qualified medical supplies provider based on the proportion each claim bears to the total amount of claims and shall report that amount to be provided.
(5) There is hereby appropriated from the General Fund to the department an amount necessary one million dollars ($1,000,000) to make the payments of qualified repayments to qualified medical supplies providers allowed pursuant to this section.
(6) No interest shall be paid on any qualified repayment made pursuant to this section.

SEC. 2.

 The Legislature finds and declares that the addition of Section 6836 to the Revenue and Taxation Code by this act serves a public purpose and does not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution by allowing Medi-Cal providers, who furnish medical supplies or equipment to vulnerable Californians and were denied a refund by the statute of limitations, to recoup a portion of sale tax amounts paid on the sales of those items for which Medi-Cal reimbursements were reduced retroactively after delays by court action.

SEC. 3.

  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:
To protect the financial solvency of affected qualified medical supplies providers who furnish medical supplies or equipment to vulnerable Californians as soon as possible, it is necessary that this act take effect immediately.