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AB-43 Taxation: prison contracts: goods and services.(2017-2018)

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Date Published: 12/05/2016 08:52 PM
AB43:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 43


Introduced by Assembly Member Thurmond

December 05, 2016


An act to add Part 28 (commencing with Section 53001) to Division 2 of the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 43, as introduced, Thurmond. Taxation: prison contracts: goods and services.
Existing law imposes various taxes, including taxes on the privilege of engaging in certain activities. The Fee Collection Procedures Law, the violation of which is a crime, provides procedures for the collection of certain fees and surcharges.
This bill would impose a tax on the privilege of contracting with a state prison, the Department of Corrections and Rehabilitation, or the Department of General Services to provide a state prison with goods and services in the amount of __ percent of the final contract price for contracts entered into on or after January 1, 2018. The bill would require all amounts paid, less refunds, to be deposited into the State Incarceration Prevention Fund, which this bill would establish in the State Treasury, and would continuously appropriate those moneys for the purposes of providing services to prevent people from being incarcerated and providing early intervention programs, less the amount needed to reimburse the State Board of Equalization and the Attorney General for costs incurred in administering these provisions. The bill would prohibit these taxes from being passed through to the state by way of higher prices for the goods or services in the contract, and would require the taxpayer to certify under penalty of perjury that they have not passed on this tax to the state. The bill would require the taxpayer to pay a penalty if it fails to comply with these provisions. The bill would authorize the Attorney General to monitor and investigate taxpayers to ensure that they are not passing this tax through to the state, and would require the State Board of Equalization to administer the tax imposed by this part pursuant to the Fee Collection Procedures Law.
By expanding the application of the Fee Collection Procedures Law, the violation of which is a crime, and by expanding the scope of the crime of perjury, this bill imposes a state-mandated local program.
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: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Part 28 (commencing with Section 53001) is added to Division 2 of the Revenue and Taxation Code, to read:

PART 28. State Incarceration Prevention Tax

53001.
 For contracts entered into on or after January 1, 2018, there is hereby imposed a tax on the privilege of contracting with a state prison, the Department of Corrections and Rehabilitation, or the Department of General Services to provide a state prison with goods and services in the amount of ____ percent of the final contract price.

53002.
 For the purposes of this part, “taxpayer” means a person subject to the tax imposed by this part.

53003.
 (a) The State Incarceration Prevention Fund is hereby created in the State Treasury.
(b) A state prison, the Department of Corrections and Rehabilitation, or the Department of General Services shall collect the taxes imposed pursuant to Section 53001 at the time a payment is made on a contract for goods and services for a state prison, shall remit the amounts collected to the board, and shall file a return with the board on or before the last day of the month following each quarterly calendar period. The board shall transmit the payments, less refunds, to the State Treasury to be deposited into the State Incarceration Prevention Fund.
(c) Notwithstanding Section 13340 of the Government Code, all amounts deposited into the State Incarceration Prevention Fund shall be continuously appropriated without regard to fiscal years to the following:
(1) The board and the Attorney General for reimbursement of their costs for administering this part.
(2) The remainder to ____ for the purposes of providing services to prevent people from being incarcerated and providing early intervention programs.

53004.
 (a) The board shall administer and collect the tax imposed by this part pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001)). For the purposes of this part, the references in the Fee Collection Procedures Law to “fee” shall include the tax imposed by this part, and references to “feepayer” shall include any taxpayer.
(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the board or the Attorney General to implement the purposes of this part.

53005.
 (a) The tax imposed by this part shall not be passed through to the state by way of higher prices for the goods or services in the contract.
(b) A taxpayer shall certify under penalty of perjury that the tax imposed by this part was not passed through to the state by way of higher prices for the goods and services in the contract.
(c) The Attorney General may monitor and, if necessary, investigate any instance where a taxpayer has passed or attempted to pass the tax through to the state by using the tax as a pretext to materially raise prices.
(d) Any taxpayer that fails to comply with this section shall pay a penalty in an amount not to exceed ____ dollars ($____) for each instance the taxpayer fails to comply with this section.

SEC. 2.

 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.