Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 61050]

  ( Heading of Division 2 amended by Stats. 1968, Ch. 279. )


  ( Part 19 added by Stats. 1974, Ch. 991. )

CHAPTER 7. Administration [40171 - 40216]

  ( Chapter 7 added by Stats. 1974, Ch. 991. )

ARTICLE 1. Regulations, Records and Reports [40171 - 40177.4]
  ( Article 1 added by Stats. 1974, Ch. 991. )


The board shall enforce the provisions of this part and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this part. The board may prescribe the extent to which any ruling or regulation shall be applied without retroactive effect.

(Added by Stats. 1974, Ch. 991.)


Every electric utility engaged in generating, purchasing, transmitting, distributing, consuming or selling electrical energy in this state shall keep such records pertaining thereto in such form as the board may prescribe by rule or regulation.

(Added by Stats. 1974, Ch. 991.)


Every electric utility shall keep and maintain such records of meter readings and other records as may be necessary for the accurate determination of the kilowatt-hours of electrical energy generated, purchased, consumed or sold by it in this state.

(Added by Stats. 1974, Ch. 991.)


The board or its authorized representative may make such examination of the records, meters and equipment of any person generating, transmitting, distributing, consuming, purchasing or selling electrical energy and such other investigations as it may deem necessary in carrying out the provisions of this part.

(Added by Stats. 1974, Ch. 991.)


In addition to any other reports or returns required under this part, the board may by rule or otherwise require additional, supplemental or other reports from electric utilities, consumers, and any other person generating, purchasing, transmitting, distributing or consuming electrical energy, including verification of the information to be given on and the times for filing of such reports. For the purpose of carrying out its duties under Article 2 (commencing with Section 40031) of Chapter 2 of this part, the board may require such reports of estimates of future availability, generation, sales and consumption of electrical energy from such electric utilities and other persons as it may deem necessary. The board shall have full access to records of the Public Utilities Commission, and any political subdivision or public agency of this state that regulates, operates or owns an electric utility, which pertain to the generation, transmission, distribution, sale, purchase or consumption of electrical energy in this state.

(Added by Stats. 1974, Ch. 991.)


(a) Except as otherwise provided by law, any person who is engaged in the business of preparing, or providing services in connection with the preparation of, returns under Chapter 4 (commencing with Section 40051), or any person who for compensation prepares any such return for any other person, and who knowingly or recklessly does either of the following, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than one thousand dollars ($1,000) or imprisoned no more than one year, or both, together with the costs of prosecution:

(1) Discloses any information furnished to him or her for, or in connection with, the preparation of the return.

(2) Uses that information for any purpose other than to prepare, or assist in preparing, the return.

(b) Subdivision (a) shall not apply to disclosure of information if that disclosure is made pursuant to the person’s consent or pursuant to a subpoena, court order, or other compulsory legal process.

(Added by Stats. 2000, Ch. 1052, Sec. 46. Effective January 1, 2001.)


(a) The board shall determine which electric utility’s accounts are eligible for the managed audit program in a manner that is consistent with the efficient use of its auditing resources and the maximum effectiveness of the program.

(b) An electric utility is not required to participate in the managed audit program.

(Added by Stats. 2014, Ch. 105, Sec. 21. (AB 2009) Effective January 1, 2015.)


An electric utility’s account is eligible for the managed audit program only if the electric utility meets all of the following criteria:

(a) The electric utility’s business involves few or no statutory exemptions.

(b) The electric utility’s business involves a single or small number of clearly defined taxability issues.

(c) The electric utility is subject to this part and agrees to participate in the managed audit program.

(d) The electric utility has the resources to comply with the managed audit instructions provided by the board.

(Added by Stats. 2014, Ch. 105, Sec. 22. (AB 2009) Effective January 1, 2015.)


(a) If the board selects an electric utility’s account for a managed audit, all of the following apply:

(1) The board shall identify all of the following:

(A) The audit period covered by the managed audit.

(B) The types of transactions covered by the managed audit.

(C) The specific procedures that the electric utility is to follow in determining any liability.

(D) The records to be reviewed by the electric utility.

(E) The manner in which the types of transactions are to be scheduled for review.

(F) The time period for completion of the managed audit.

(G) The time period for the payment of the liability and interest.

(H) Any other criteria that the board may require for completion of the managed audit.

(2) The electric utility shall:

(A) Examine its records, meters, and equipment to determine if it has any unreported tax liability for the audit period.

(B) Make available to the board for verification all computations and records, meters, and equipment examined pursuant to subparagraph (A).

(b) The information provided by the electric utility pursuant to paragraph (2) of subdivision (a) is the same information that is required for the completion of any other audit that the board may conduct.

(Added by Stats. 2014, Ch. 105, Sec. 23. (AB 2009) Effective January 1, 2015.)


Nothing in the article limits the board’s authority to examine the records, meters, and equipment of an electric utility under Section 40174.

(Added by Stats. 2014, Ch. 105, Sec. 24. (AB 2009) Effective January 1, 2015.)


Upon completion of the managed audit and verification by the board, interest on any unpaid liability shall be computed at one-half the rate that would otherwise be imposed for liabilities covered by the audit period. Payment of the liabilities and interest shall be made within the time period specified by the board. If the requirements for the managed audit are not satisfied, the board may proceed to examine the records of the electric utility in a manner to be determined by the board under law.

(Added by Stats. 2014, Ch. 105, Sec. 25. (AB 2009) Effective January 1, 2015.)

RTCRevenue and Taxation Code - RTC1.