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Business Taxes Law Guide—Revision 2024
Energy Resources Surcharge Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 19. Energy Resources Surcharge Law
Chapter 2. The Surcharge
Article 1. Imposition of Surcharge
Article 3. Registration
Chapter 2. The Surcharge
Article 1. Imposition of Surcharge
40016. Imposition and rate of surcharge. (a) A surcharge is imposed on the consumption in this state of electrical energy purchased from an electric utility on and after January 1, 2003, at the rate of three-tenths mill ($0.0003) per kilowatthour, or at the rate determined pursuant to subdivision (b).
(b) The Energy Commission shall fix the rate at a public meeting in each November for each calendar year starting the following January. Under no circumstances may the rate fixed exceed three-tenths mill ($0.0003) per kilowatthour. If the commission fails to fix the rate in any November, the surcharge shall continue at the rate in effect during that November.
History—Stats. 1982, Ch. 1067, in effect January 1, 1983, operative July 1, 1983, added "(a)" before "A surcharge," substituted "the rate" for "such other rate as may be" after "or at" and "subdivision (b)" for "Article 2 … part" after "pursuant to" in new subdivision (a), and added subdivision "(b)." Stats. 2002, Ch. 1033 (AB 3009), in effect September 28, 2002, substituted "2003" for "1975" after "January 1,", substituted "three-tenths mill ($0.0003)" for "one-tenth mill ($0.0001)" after "the rate of", substituted "kilowatthour" for "kilowatt-hour" after "per", and substituted "determined" for "fixed" after "or at the rate" in subdivision (a); completely revised subdivision (b).
40018. Liability for surcharge. Every person consuming electrical energy in this state purchased from an electric utility, or the United States or an agency thereof, is liable for the surcharge. His liability is not extinguished until the surcharge has been paid to this state, except that payment to an electric utility registered under this part is sufficient to relieve the consumer from further liability for the surcharge.
History—Stats. 1977, Ch. 624, effective January 1, 1978, added ", or the United States or an agency thereof," in the first sentence.
40019. Collection by electric utility. Every electric utility making sales of electrical energy to consumers in this state shall collect the surcharge from each consumer, other than a consumer that is an electric utility, at the time it collects its billings from the consumer for the electrical energy sold; provided, the duty to collect the surcharge from a consumer shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the operative date of this part.
40019.1. Collection from another electric utility. Notwithstanding the provisions of Section 40019, an electric utility may collect the surcharge from another electric utility under such terms and conditions as are agreed upon by the electric utilities involved and the board.
History—Added by Stats. 1977, Ch. 624, effective January 1, 1978.
40020. Surcharge to be added; surcharge statement. The surcharge required to be collected by the electric utility from the consumer shall be added to the charges to the consumer for the electrical energy sold. The amount of the surcharge may be stated separately. If the electric utility does not separately state the amount of the surcharge, the electric utility shall print on the billing a notice to the effect that the charges include energy resources surcharge computed at (applicable rate) mill per kilowatt-hour. Until January 1, 1976, such notice need not appear on the billing itself provided that the electric utility notifies each of its customers, no later than at the time it renders a bill for the first regular billing period applicable to that person which starts on or after the operative date of this part, that electrical energy charges shall include energy resources surcharge computed at (applicable rate) mill per kilowatt-hour. If the Board of Equalization fixes a new rate in 1975, the electric utility shall notify its customers of the new rate at or prior to the time a billing is rendered to the customer subject to the new rate if the electric utility does not separately state the amount of the surcharge or print on the billing notice that the surcharge is included in the charges.
40021. Surcharge collections are debts. The surcharge required to be collected by the electric utility, and any amount unreturned to the consumer which is not a surcharge but was collected from the consumer as representing a surcharge, constitutes debts owed by the electric utility to this state.
40022. Application of collections. Any amounts collected by an electric utility from a consumer on account of the purchase of electrical energy the consumption of which is subject to the surcharge shall be applied proportionately between the liability of the consumer on account of the purchase of the electrical energy and the liability of the consumer for the surcharge.
40023. Worthless accounts. An electric utility is relieved from liability to collect the surcharge insofar as the base upon which the surcharge is imposed is represented by accounts which have been found to be worthless and charged off in accordance with generally accepted accounting principles. If the electric utility has previously paid the amount of the surcharge it may, under regulations prescribed by the board, take as a deduction on its return the amount found to be worthless and charged off. If any such accounts are thereafter collected in whole or in part the surcharge so collected shall be paid with the first return filed after such collection.
The board may by regulation promulgate such other rules with respect to uncollected or worthless accounts as it shall deem necessary to the fair and efficient administration of this part.
40024. Compliance. Notwithstanding any other provision of law to the contrary, persons subject to the jurisdiction of the Public Utilities Commission need not obtain any authorization from the commission to comply with the provisions of this part.
History—Stats. 1977, Ch. 579, changed "Utility" to "Utilities" following "Public".
40025. Rate; date of application. The rate fixed by the board pursuant to subdivision (b) of Section 40016 shall apply with respect to billing periods beginning on or after July 1, 1983.
History—Added by Stats. 1982, Ch. 1067, in effect January 1, 1983, operative July 1, 1983.
Article 2. Adjustment of Surcharge Rate*
* Article 2 was repealed by Stats. 1982, Ch. 1067, in effect January 1, 1983, operative July 1, 1983.
40031. Determination of rate. [Repealed.]
40032. Determination time. [Repealed.]
40033. Publication of rate. [Repealed.]
40034. Application of rate. [Repealed.]
40034.5. Adjustment of rate. [Repealed.]
Article 3. Registration
40035. Registration. Every electric utility selling electrical energy for consumption in this state shall register with the board upon a form prescribed by the board and shall set forth the name under which the utility transacts or intends to transact business and such other information as the board may require.
40036. Security requirement. (a) When necessary to ensure compliance with this part, the board may require any person subject to this part to place with it the security that the board determines. Security in the form of cash, insured deposits in banks or savings and loan institutions, or a bond or bonds duly executed by an admitted surety insurer, payable to the state, conditioned upon faithful performance of all of the requirements of this part and expressly providing for the payment of all taxes, penalties, and other obligations of the person arising out of this part, shall be held in trust to be used solely in the manner provided by this section. The amount of security shall be fixed by the board, not to exceed twice the estimated average quarterly liability of persons filing for quarterly periods, determined in the manner that the board deems proper. Security held by the board shall be released after a three-year period in which the person has filed all returns and paid all tax due to the state under this part or any amount of tax required to be collected and paid to the state within the time required.
(b) If, when a person discontinues business, the board holds security pursuant to this section in the form of cash or insured deposits in banks or savings and loan institutions, the security when applied to the account of the taxpayer shall be deemed a payment on any liability of the person to the board on the date the business is discontinued.
(c) This section shall not apply to a taxpayer who either has timely filed all returns and paid all tax due to the state under this part for the three consecutive years prior to the effective date of this section, or has, on or before July 31, 1998, timely filed all returns and paid all tax due to the state under this part since the taxpayer registered with the board pursuant to Section 40035. However, the board may require security from any such taxpayer who fails to remain in compliance with the reporting and payment requirements of this part subsequent to the effective date of this section.
History—Added by Stats. 1998, Ch. 649 (AB 911) in effect January 1, 1999.