This article is from Cal-Tax Digest, published
by the California Taxpayers' Association.
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Gathering strong support from all quarters, legislation to boost fees to fund enforcement activities by the state Department of Alcoholic Beverage Control sailed through the Assembly. After zipping through policy and fiscal committees without a negative vote, AB 1298 (Wesson and Oropeza) was approved 72-3 by the Assembly on June 6 and sent to the Senate.

Co-author Herb Wesson told the Governmental Organization Committee, which he chairs, that the bill is a product of two years of discussions between the ABC and the alcoholic beverages industry, including breweries and wineries, and retailers. In a letter of support, Cal-Tax noted that the fees are necessary to fund regulation of the sale of the beverages, and thus should not be considered taxes.

A $7.5 million fee increase would be phased in over a three-year period for operations of existing department programs. Mr. Wesson said the ABC fees were last increased in 1978.

Coalition leader Dane Starling, vice president-corporate representative of Anheuser-Busch Companies, Inc., said the higher fees are necessary and in the best interest of the industry because ABC enforcement activities have "eroded a bit over the years."

Court: Taxpayers Can Challenge Non-Voted Taxes When They are Paid. In a sweeping taxpayer victory, the California Supreme Court ruled that taxpayers may challenge illegal taxes when they are collected. Cities have tried to protect non-voted taxes from court challenge by claiming that legal action must be filed within three years of the enactment of a tax.

The unanimous June 4 ruling in Howard Jarvis Taxpayers Association v. City of La Habra could pave the way for lawsuits against many millions of dollars in local taxes, mostly utility users taxes that were imposed without voter approval but unchallenged in the courts within three years.

Trial de Novo. The State Board of Equalization went on record May 30 in support of AB 934 (Hertzberg), the Assembly-approved measure extending trial de novo rights in court appeals of local property tax assessments.

Supporting the measure: Members Johan Klehs and Dean Andal, and Controller Kathleen Connell, who was represented by Deputy Controller Marcy Jo Mandel. Chair Claude Parrish and Member John Chiang said they were neutral.

Power Plants Assessments. Assembly Member Carole Migden gutted her controversial Internet taxation bill (AB 81) and converted it into a state-assessment measure for power plants. The May 30 amendments require that the State Board of Equalization assess every electric generation facility with generating capacity of 50 megawatts or more that is owned or operated by an electrical corporation as defined in the Public Utilities Code.

Setting it Straight. The June issue of Cal-Tax Digest erroneously listed Virginia Gates of PricewaterhouseCoopers LLP among the authors of the article on the need for legislative action to allow state tax credits against unitary group liability.

(Editor's Note: Items in 
FOR THE RECORD include news previously reported in Caltaxletter,
Cal-Tax's newsletter that is published 40 times
a year.)