California 2011-2012 Regular Session Status: In Committee 1 D cosponsors

AB 218 — Taxation: estate taxes and sales and use taxes.

Last action — From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Assembly
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2011-2012 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

(1) Existing law, added by Proposition 6, an initiative measure enacted by voters at the June 8, 1982, statewide primary election (hereafter the initiative measure) , prohibits the imposition of any tax on or by reason of any transfer occurring by reason of death, but imposes a California estate tax, commonly referred to as the "pick up tax" equal to a certain portion of the maximum allowable amount of credit for state death taxes allowable under the applicable federal estate tax law. Due to changes in federal law, the pick up tax became inoperative as of January 1, 2005. Existing law, for the 2010–11 fiscal year, reduces an appropriation from the General Fund to the Controller for subvention payments to counties under the Williamson Act from $10,000,000 to zero. This bill would declare the Legislature's intent to propose an amendment to the initiative measure to provide a state sales and use tax exemption for purchases of manufacturing equipment used in the manufacturing process and to use the revenue generated from imposing a California estate tax to fully fund the Williamson Act subventions and to supplant the reduction of General Fund revenue resulting from the exemption for purchases of manufacturing equipment. The bill would propose to the voters of the state a repeal of the provision of the initiative measure prohibiting the imposition of a tax on or by reason of any transfer occurring by reason of death. The proposed amendment to the initiative measure would impose an estate tax upon the transfer of property of every decedent with an estate valued at more than $1,000,000, in accordance with specified criteria and procedures, during the timeframe for which the California pick up tax provisions are inoperative. The proposed amendment would also require the Controller to administer and collect the tax imposed, and would require the personal representative of every estate subject to the tax to file with the Controller a return and to pay the tax in the form prescribed by the Controller. The proposed amendment would make the personal representative of a decedent's estate personally liable for payment of the estate tax, and would provide that any personal representative failing to perform these duties shall forfeit any right to payment for settling the estate. The tax imposed by the proposed amendment would be a special lien upon the gross estate of a decedent, extinguishable as specified. Pursuant to those provisions, no tax would be imposed for any period for which a federal estate tax is payable to the United States and federal tax laws allow a credit for state death taxes in an amount that would otherwise be imposed. (2) Existing law establishes the Estate Tax Fund and continuously appropriates the moneys in the fund to pay refunds for estate taxes and generation skipping transfer taxes, as specified, with the balance of the money in that fund being transferred to the unappropriated surplus in the General Fund, upon order of the Controller. This bill would propose to the voters an amendment of the initiative measure to reallocate the moneys in the Estate Tax Fund, whereby those moneys would be continuously appropriated to pay refunds for estate taxes, including those imposed upon estates valued at $1,000,000 or more, and generation skipping transfer taxes. The amendment to the initiative measure would further provide that after payment of refunds, those moneys shall be continuously appropriated, without regard to fiscal year, to make subvention payments to counties under the Williamson Act, and the remaining balance of the moneys in the fund shall be transferred to the unappropriated surplus in the General Fund. The amendment to the initiative measure would additionally propose to exempt from the estate tax the value of specified agricultural real property and agricultural personal property, if certain conditions are met. (3) 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, and provides various exemptions from the taxes imposed by that law. The bill would propose an amendment to the initiative measure to exempt from those sales and use taxes the gross receipts from the sale of, and the storage, use, or other consumption of, tangible personal property, as defined, purchased for use by a qualified person, as defined, to be used in manufacturing, processing, refining, fabricating, recycling of property, or other specified processes, and tangible personal property purchased for use by a contractor for specified purposes, as provided. This amendment would specify that this exemption does not apply to local sales and use taxes, transactions and use taxes, and specified state sales and use taxes. The amendment would permit its provisions to be amended by a bill passed by a 23 vote of the membership of both houses of the Legislature and signed by the Governor. (4) Existing law prohibits amendment of the initiative measure by the Legislature unless the amendment is approved by the voters. This bill would call a special election to be consolidated with the next statewide general election. It would condition the amendment of the initiative measure upon voter approval, and would require the Secretary of State to submit the provisions of the bill that amend the initiative statute to the voters for their approval at the next consolidated statewide election. This bill would declare that it is to take effect immediately as an act calling an election.

Bill Text

Action History

  1. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

  2. Died pursuant to Art. IV, Sec. 10(c) of the Constitution.

  3. Held under submission.

  4. In committee: Set, first hearing. Referred to APPR. suspense file.

  5. From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 3.) (May 16). Re-referred to Com. on APPR.

  6. Re-referred to Com. on REV. & TAX.

  7. From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

  8. In committee: Set, first hearing. Referred to REV. & TAX. suspense file.

  9. Re-referred to Com. on REV. & TAX.

  10. From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

  11. Referred to Com. on REV. & TAX.

  12. From printer. May be heard in committee March 4.

  13. Read first time. To print.

Sponsors

  • Gatto · Cosponsor
  • Wieckowski · Primary
  • Josh Lowenthal · Cosponsor

Sponsorship breakdown

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1 sponsors · 2 co-sponsors · 119 not signed on

Sponsors (1)

  • Wieckowski

Co-sponsors (2)

Not signed on (119)

119 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Frequently asked questions

What does AB 218 do?
(1) Existing law, added by Proposition 6, an initiative measure enacted by voters at the June 8, 1982, statewide primary election (hereafter the initiative measure) , prohibits the imposition of any tax on or by reason of any transfer occurring by reason of death, but imposes a California estate tax, commonly referred to as the "pick up tax" equal to a certain portion of the maximum allowable amount of credit for state death taxes allowable under the applicable federal estate tax law. Due to changes in federal law, the pick up tax became inoperative as of January 1, 2005. Existing law, for the 2010–11 fiscal year, reduces an appropriation from the General Fund to the Controller for subvention payments to counties under the Williamson Act from $10,000,000 to zero. This bill would declare the Legislature's intent to propose an amendment to the initiative measure to provide a state sales and use tax exemption for purchases of manufacturing equipment used in the manufacturing process and to use the revenue generated from imposing a California estate tax to fully fund the Williamson Act subventions and to supplant the reduction of General Fund revenue resulting from the exemption for purchases of manufacturing equipment. The bill would propose to the voters of the state a repeal of the provision of the initiative measure prohibiting the imposition of a tax on or by reason of any transfer occurring by reason of death. The proposed amendment to the initiative measure would impose an estate tax upon the transfer of property of every decedent with an estate valued at more than $1,000,000, in accordance with specified criteria and procedures, during the timeframe for which the California pick up tax provisions are inoperative. The proposed amendment would also require the Controller to administer and collect the tax imposed, and would require the personal representative of every estate subject to the tax to file with the Controller a return and to pay the tax in the form prescribed by the Controller. The proposed amendment would make the personal representative of a decedent's estate personally liable for payment of the estate tax, and would provide that any personal representative failing to perform these duties shall forfeit any right to payment for settling the estate. The tax imposed by the proposed amendment would be a special lien upon the gross estate of a decedent, extinguishable as specified. Pursuant to those provisions, no tax would be imposed for any period for which a federal estate tax is payable to the United States and federal tax laws allow a credit for state death taxes in an amount that would otherwise be imposed. (2) Existing law establishes the Estate Tax Fund and continuously appropriates the moneys in the fund to pay refunds for estate taxes and generation skipping transfer taxes, as specified, with the balance of the money in that fund being transferred to the unappropriated surplus in the General Fund, upon order of the Controller. This bill would propose to the voters an amendment of the initiative measure to reallocate the moneys in the Estate Tax Fund, whereby those moneys would be continuously appropriated to pay refunds for estate taxes, including those imposed upon estates valued at $1,000,000 or more, and generation skipping transfer taxes. The amendment to the initiative measure would further provide that after payment of refunds, those moneys shall be continuously appropriated, without regard to fiscal year, to make subvention payments to counties under the Williamson Act, and the remaining balance of the moneys in the fund shall be transferred to the unappropriated surplus in the General Fund. The amendment to the initiative measure would additionally propose to exempt from the estate tax the value of specified agricultural real property and agricultural personal property, if certain conditions are met. (3) 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, and provides various exemptions from the taxes imposed by that law. The bill would propose an amendment to the initiative measure to exempt from those sales and use taxes the gross receipts from the sale of, and the storage, use, or other consumption of, tangible personal property, as defined, purchased for use by a qualified person, as defined, to be used in manufacturing, processing, refining, fabricating, recycling of property, or other specified processes, and tangible personal property purchased for use by a contractor for specified purposes, as provided. This amendment would specify that this exemption does not apply to local sales and use taxes, transactions and use taxes, and specified state sales and use taxes. The amendment would permit its provisions to be amended by a bill passed by a 23 vote of the membership of both houses of the Legislature and signed by the Governor. (4) Existing law prohibits amendment of the initiative measure by the Legislature unless the amendment is approved by the voters. This bill would call a special election to be consolidated with the next statewide general election. It would condition the amendment of the initiative measure upon voter approval, and would require the Secretary of State to submit the provisions of the bill that amend the initiative statute to the voters for their approval at the next consolidated statewide election. This bill would declare that it is to take effect immediately as an act calling an election.
Who sponsors AB 218?
AB 218 is sponsored by Gatto, Wieckowski, and Lowenthal, Josh (Democratic).
What is the current status of AB 218?
This bill died with 2011-2012 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track AB 218?
Track AB 218 free on One Click Politics — get push/email alerts when it moves.

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