BILL NUMBER: SB 256 AMENDED 08/28/95 BILL TEXT AMENDED IN ASSEMBLY AUGUST 28, 1995 AMENDED IN ASSEMBLY AUGUST 21, 1995 AMENDED IN ASSEMBLY JUNE 19, 1995 AMENDED IN SENATE MAY 30, 1995 AMENDED IN SENATE MARCH 23, 1995 INTRODUCED BY Senator Johnston (Principal coauthor: Senator Leslie) (Principal coauthors: Assembly Members Alpert and Kevin Murray) (Coauthors: Senators Beverly, Dills, Hughes, Mello, Monteith, Thompson, and Watson) (Coauthor: Assembly Member Willard Murray) FEBRUARY 8, 1995 An act to amend Sections 15364.51, 15364.52, 15364.53, and 15364.54 of, to add Chapter 2.2 (commencing with Section 15372.60) to Part 6.7 of Division 3 of Title 2 of, the Government Code, {+ and to add Section 19559 to the Revenue and Taxation Code, +} relating to state tourism. LEGISLATIVE COUNSEL'S DIGEST SB 256, as amended, Johnston. California Tourism Marketing Act. {- Existing -} {+ (1) Existing +} law establishes a California Tourism Commission, located within the Department of Commerce, subsequently the Trade and Commerce Agency. The commission is required to adopt and annually update a tourism marketing plan for the State of California. Existing law requires the Director of the Office of Tourism, in its report to the Governor, the Legislature, and the California Tourism Commission, to among other things, detail the tourism marketing plan that has been adopted for the upcoming fiscal year. This bill would enact the California Tourism Marketing Act that would, among other things, provide procedures for the establishment of an industry-approved assessment and the creation of a nonprofit corporation named the California Tourism Marketing Commission utilizing a referenda process. This bill would provide that the existing California Tourism Commission shall be inoperative while the California Tourism Marketing Commission established by this act is operative, but shall resume operation upon the termination of the California Tourism Marketing Commission. This bill would provide that if the California Tourism Commission is inoperative, the Secretary of Trade and Commerce shall detail the marketing plan. This bill would provide that certain functions performed by the Office of Tourism are also to be performed by the California Tourism Marketing Commission. This bill would require the Governor to appoint a 25-member Tourism Selection Committee, as specified, to issue a report listing specified data related to the tourism industry. This bill would require the Office of Tourism to establish, upon approval of an initial tourism industry referendum, the California Tourism Marketing Commission which would be under the direction of a board of commissioners and administered by an executive director who would be an exempt state employee. This bill would authorize the Office of Tourism to contract with the commission to undertake marketing activities utilizing state funds. This bill would prescribe certain duties of the commission, including preparing or causing to be prepared an annual marketing plan and providing assessed business with certain information. This bill would declare the intent of the Legislature with respect to the funding of the commission. This bill would prescribe the duties of the Secretary of Trade and Commerce relative to tourism, including collecting and depositing assessments, exercising police powers, exercising veto power over the commission in specified circumstances, and calling referenda. This bill would prescribe a procedure for the collection of unpaid assessments and would prescribe specified penalties for the failure of businesses to pay assessments. This bill would make it a misdemeanor for a person to provide false information concerning an assessment. The creation of this new crime would impose a state-mandated local program. {+ (2) Existing law authorizes the Franchise Tax Board to provide specified types of tax information to certain public entities, subject to specified conditions regarding confidentiality, including misdemeanor penalties for disclosure, and review of the use of the information. This bill would, additionally, authorize the Franchise Tax Board to provide the Secretary of Trade and Commerce, acting within the capacity authorized in the California Tourism Marketing Act, with information relating to specified types of income or franchise tax returns or other records, subject to these conditions. By creating a new crime, this bill would impose a state-mandated local program. +} {- The -} {+ (3) 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: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 15364.51 of the Government Code is amended to read: 15364.51. It is the intention of the Legislature in enacting this part or amending this part to add Chapter 2.2 (commencing with Section 15372.60) to do all of the following: (a) Reaffirm a commitment to the fostering of the economic activity inherent in tourism promotion as delineated as a mandate to the agency and to the Office of Tourism. (b) To provide for an effective means of promoting and marketing the State of California as a destination for tourists on a worldwide basis, to provide the private sector with a more effective means of promoting tourism efforts and a forum for removing obstacles to overall tourism growth in order for California to remain competitive in the world tourism marketplace. (c) Optimize the contribution of the tourism-related industries to the state's economic prosperity and to expand employment opportunities. (d) Make the opportunity for, and benefits of, tourism in the state accessible to its residents and visitors and ensure that present and future generations are afforded adequate tourism resources and attractions. (e) Encourage the preservation and use of California historic and scenic environments to enhance the state's appeal as a destination for domestic and international tourism. (f) Encourage California residents to take maximum advantage of travel and tourism opportunities within the State of California by enabling them to obtain accurate, timely, up-to-date travel and tourism information benefiting both urban and rural travelers in various regions of the state. (g) Contribute to personal growth, health, education, and intercultural appreciation of the geography, history, arts, and ethnicity of the State of California. (h) Encourage the free and welcome entry of individuals traveling to the state in order to enhance international understanding and goodwill, consistent with immigration laws, the laws protecting the public health, and laws governing the importation of goods into the United States and state law. (i) Encourage investment in new tourism facilities and renovation of older facilities. (j) Assist in the collection, analysis, and timely dissemination of data that accurately measure the economic and social impact of tourism to, and within, the state in order to facilitate planning in the public and private sectors. (k) Harmonize, to the maximum extent possible, all state activities in support of tourism and recreation with the needs of the general public, local governments, and the private sector, and to give leadership to all concerned with tourism in California. SEC. 2. Section 15364.52 of the Government Code is amended to read: 15364.52. (a) There is hereby created in state government a California Tourism Commission, located within the Trade and Commerce Agency, which shall consist of the Secretary of Trade and Commerce who shall serve as the chairperson of the commission; the Director of the Office of Tourism, who shall serve as vice chairperson of the commission and nine other members appointed as follows: (1) Five members shall be appointed by the Governor who are able persons, professionally active in the tourism industry representing diverse segments of that industry. (2) One Member of the Senate shall be appointed by the Senate Committee on Rules and one Member of the Assembly shall be appointed by the Speaker of the Assembly. These members shall be ex officio, nonvoting members of the commission. (3) Two members, who are able persons professionally active in the tourism industry representing diverse segments of that industry, shall be appointed one each by the Senate Committee on Rules and the Speaker of the Assembly. (b) The Assistant Director of the Office of Tourism shall serve as secretary to the commission, a nonvoting position, and shall keep the minutes and records of all commission meetings and provide staff and whatever supportive services necessary to the activities of the commission. (c) The commission shall meet quarterly and at other times and places as the chairperson may designate for the purpose of transacting the commission's business. Each commission member shall serve without compensation but shall be reimbursed for traveling and other expenses necessarily incurred in the performance of duties. (d) The commission shall, in cooperation with the Office of Tourism and the agency, adopt, and annually update, a tourism marketing plan for the State of California that includes both domestic and international tourism promotion. The plan shall, to the extent practical and feasible, do all of the following: (1) Serve as a guide for effectuating the California Tourism Policy Act, within available resources. (2) Include an assessment of the activities and accomplishments of the Office of Tourism. (3) Outline the intended program of tourism promotion and visitor service activities for the oncoming year. (4) Delineate the ways, means, and programs by which tourism shall be promoted, including any cost-effective marketing methods and techniques to be employed. (5) Identify resources as are reasonably necessary, from all sources both public and private, to accomplish these promotion and marketing activities. (6) Identify and articulate cooperative or shared cost programs, or opportunities for these ventures, with private entities. (7) Identify licensing opportunities, including licensing agents. (8) Contain other information, data, or recommendations that may be germane to the marketing efforts of California pursuant to the intent of this chapter. (e) The commission, in cooperation with the Office of Tourism, may convene committees consisting of qualified professionals and experts in various segments of the tourism industry that may be required to aid in the preparation of, or revision of, the marketing plan, or parts thereof, and as may from time to time be appropriate to further the purposes of this chapter. (f) The commission shall work to the maximum extent practicable with those private associations, nonprofit corporations, organizations, or other private entities whose purpose includes the promotion of California tourism. (g) Members of the California Tourism Commission and the staff of the Office of Tourism, when traveling to foreign countries or attending international travel trade shows, shall do so in cooperation with the California State World Trade Commission to preserve its ambassadorial function. (h) The commission established by this chapter shall be inoperative while the California Tourism Marketing Commission established pursuant to Chapter 2.2 (commencing with Section 15372.60) is in existence. The commission established by this chapter shall resume operation on the date the California Tourism Marketing Commission established by Chapter 2.2 (commencing with Section 15372.60) terminates. SEC. 3. Section 15364.53 of the Government Code is amended to read: 15364.53. In addition to those functions of the Office of Tourism specified in Section 15334, the Office of Tourism and the California Tourism Marketing Commission established pursuant to Chapter 2.2 (commencing with Section 15372.60): (a) Shall take advantage of particular promotional opportunities as may be presented. (b) Shall facilitate travel and visitorship to, and within, California to the maximum extent feasible. (c) May identify and assist in the development of a user-directed, computer-based, public-access information system serving the needs of the traveling and tourist public in urban and rural areas in California. (d) Shall develop and publish research to determine sources and characteristics of present and future visitors to California and measure the effectiveness of marketing and service programs. (e) Shall represent the state at domestic and international travel trade shows that provide an opportunity to promote a significant amount of travel to, and within, California. (f) Shall cooperate with the federal government in the development and the promotion of the United States as a destination for international tourism. (g) Shall implement the Tourism Marketing Plan. SEC. 4. Section 15364.54 of the Government Code is amended to read: 15364.54. The director shall report on or before March 1 of each year to the Governor, the Legislature, and the California Tourism Commission. Each report shall do all of the following: (a) Detail the tourism marketing plan which has been adopted for the upcoming fiscal year. If the California Tourism Commission established pursuant to Section 15364.52 is inoperative, the secretary shall detail the marketing plan described in Section 15372.75. (b) Assess the overall benefits and effectiveness of the tourism marketing and advertising program. (c) Include documentation of the directly attributable benefits of the marketing program to all of the following: (1) California's tourism industry. (2) Employment in California. (3) State and local tax revenues. (4) The state's lesser known and underutilized destinations. (d) Identify additional data that needs to be collected to assess further and adequately the benefits of the program. (e) Establish standardized and accurate methods to measure annually California's share of the domestic and international tourism markets and assess the impact of the marketing program in terms of California's changing market share. SEC. 5. Chapter 2.2 (commencing with Section 15372.60) is added to Part 6.7 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 2.2. CALIFORNIA TOURISM MARKETING ACT Article 1. Legislative Intent 15372.60. This chapter shall be known and may be cited as the California Tourism Marketing Act. 15372.61. The Legislature hereby finds and declares all of the following: (a) Tourism is among California's biggest industries, annually contributing over fifty-four billion dollars ($54,000,000,000) to the state economy, and employing about 700,000 Californians in 1995. (b) In order to retain and expand the tourism industry in California, it is necessary to market travel to and within California. (c) State funding, while an important component of marketing, has been unable to generate sufficient funds to meet the threshold levels of funding necessary to reverse recent losses of California's tourism market share. (d) An industry-approved assessment provides a private-sector financing mechanism that, in partnership with state funding, will provide the amount of marketing necessary to increase tourism expenditures within California. (e) The goal of the assessments is to assess the least amount per business, in the least intrusive manner, spread across the greatest practical number of tourism industry segments. (f) The commission shall target an amount determined to be sufficient to market effectively California's tourism to and within the state. (g) In the course of developing its written marketing plan pursuant to Section 15372.5, the commission shall, to the maximum extent feasible, do both of the following: (1) Seek advice and recommendations from all segments of California's travel and tourism industry and from all geographic regions of the state. (2) Harmonize, as appropriate, its marketing plan with the travel and tourism marketing activities and objectives of the various industry segments and geographic regions. (h) The commission's marketing budget shall be spent predominantly to bring travelers and tourists into the state, and no more than 15 percent of the commission's {- marketing budget -} {+ assessed funds +} in any year shall be spent to promote travel within California, unless approved by at least two-thirds of the commissioners. Article 2. Definitions 15372.65. Unless the context otherwise requires, the definitions in this section govern the construction of this chapter. (a) "Appointed Commissioner" means a commissioner appointed by the Governor. (b) "Assessed business" means a person required to pay an assessment pursuant to this chapter, and until the first assessment is levied, any person authorized to vote for the initial referendum. (c) "Commission" means the California Tourism Marketing Commission. (d) "Elected Commissioner" means a commissioner elected pursuant to subdivision (d) of Section 15372.70. (e) "Industry category" means the following classifications within the tourism industry: (1) Accommodations. (2) Restaurants and retail. (3) Attractions and recreation. (4) Transportation and travel services. (f) "Industry segment" means a portion of an industry category. For example, rental cars are an industry segment of the transportation and travel services industry category. (g) "Office" means the Office of Tourism within the Trade and Commerce Agency. (h) "Person" means an individual, public entity, firm, corporation, association, or any other business unit. (i) "Referendum" means any vote by mailed ballot of measures recommended by the commission and approved by the secretary pursuant to Section 15372.100, except for the initial referendum, which shall consist of measures contained in the selection committee report, discussed in Section 15372.66. (j) "Secretary" means the Secretary of Trade and Commerce. (k) "Selection Committee" means the Tourism Selection Committee described in Article 3 (commencing with Section 15372.66). Article 3. Tourism Selection Committee 15372.66. (a) The Governor shall appoint a Tourism Selection Committee based upon recommendations from established industry associations. The committee shall consist of 25 representatives, with no fewer than six from each industry category. In selecting the representatives, the {- committee -} {+ Governor +} shall, to the extent possible, give recognition to the diversity within each industry category. The committee shall select a chairperson from among its members. The office shall provide staffing for the committee. (b) The selection committee shall convene on or before March 1, 1996. Not later than 150 days following the initial convening of the committee, the committee shall issue a report listing the following: (1) Industry segments that will be included in the initial referendum. (2) Percentage of funds to be levied against each industry category and segment. To the extent possible, the percentages shall be based upon quantifiable industry data. Funds to be levied against businesses shall bear an appropriate relationship to the benefit derived from travel and tourism by those businesses. (3) Assessment methodology and rate of assessment within each industry segment, that may include, but is not limited to, a percentage of gross revenue or a per transaction charge. (4) Businesses, if any, within a segment to be assessed at a reduced rate, which may be set at zero, whether temporarily or permanently, because they do not sufficiently benefit from travel and tourism. {- For purposes of this chapter, a business shall be deemed not to benefit sufficiently from travel and tourism if less than 20 percent of its gross annual revenue is derived from travel and tourism occurring within the state. -} (5) Initial slate of proposed elected commissioners. The number of commissioners elected from each industry category shall be determined by the weighted percentage of assessments from that category. (c) Nothing in this section shall preclude the selection committee from setting the assessment rate for a business within a segment at a lower rate, which may be set at zero, than a rate applicable to other businesses within that segment if the selection committee makes specific findings that the lower rate should apply due to unique geographical, financial, or other circumstances affecting the business. No business for which a zero assessment rate is set pursuant to this subdivision shall be sent a ballot or entitled to participate in the initial referendum, or in any subsequent referendum in which its rate of assessment is set at zero. (d) The committee members for each industry category, also referred to as a subcommittee, shall prepare a recommendation for the entire committee on how the items specified in subdivision (b) should be determined for the industry segments within their industry category. The recommendations shall not include a discussion of industry category levies, which shall be determined solely by the committee. In the event that the subcommittee cannot agree on one or more of the items specified in subdivision (b), no recommendation shall be given in that category. The recommendations shall be presented to the full committee, which shall address each of the items contained in subdivision (b). (e) In order to be assessed, an industry segment must be defined with sufficient clarity to allow for the cost effective identification of assessed businesses within that segment. (f) It shall be the responsibility of the office to advertise widely the selection committee process and to schedule public meetings for potential assessed businesses to provide input to the selection committee. (g) The selection committee process and report are exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1). Article 4. Commission 15372.70. (a) Upon approval of the initial referendum, the office shall establish a nonprofit corporation named the California Tourism Marketing Commission. The commission shall be under the direction of a board of commissioners, which shall function as the board of directors for purposes of the Nonprofit Corporation Law. (b) The board of commissioners shall consist of 37 commissioners comprising the following: (1) The secretary, who shall serve as chairperson. (2) Twelve members, who are professionally active in the tourism industry, representing each of the 12 officially designated tourism regions and diverse elements of the industry, shall be appointed by the Governor. Appointed commissioners are not limited to assessed businesses. (3) Twenty-four elected commissioners, including at least one representative of a travel agency or tour operator that is an assessed business. (c) The commission established pursuant to Section 15364.52 shall be inoperative so long as the commission established pursuant to this section is in existence. (d) Elected commissioners shall be elected by industry category in a referendum. Regardless of the number of ballots received for a referendum, the nominee for each commissioner slot with the most weighted votes from assessed businesses within that industry category shall be elected commissioner. In the event that an elected commissioner resigns, dies, or is removed from office during his or her term, the commission shall appoint a replacement from the same industry category that the commissioner in question represented, and that commissioner shall fill the remaining term of the commissioner in question. The number of commissioners elected from each industry category shall be determined by the weighted percentage of assessments from that category. (e) The secretary may remove any elected commissioner following a hearing at which the commissioner is found guilty of abuse of office or moral turpitude. (f) With the exception of the secretary, no commissioner shall serve for more than two consecutive terms. (g) Except for the original commissioners, all commissioners shall serve four-year terms. One-half of the commissioners originally appointed or elected shall serve a two-year term, while the remainder shall serve a four-year term. Every two years thereafter, one-half of the commissioners shall be appointed or elected by referendum. (h) The selection committee shall determine the initial slate of candidates for elected commissioners. Thereafter the commissioners, by adopted resolution, shall nominate a slate of candidates, and shall include any additional candidates complying with the procedure described in Section 15372.102. (i) The commissioners shall elect a vice chairperson from the elected commissioners. (j) The commission may lease space from the office. (k) The commission and the office shall be the official state representatives of California tourism. (l) All commission meetings shall be held in California. (m) No person shall receive compensation for serving as a commissioner, but each commissioner shall receive reimbursement for reasonable expenses incurred while on authorized commission business. (n) Assessed businesses shall vote only for commissioners representing their industry category. (o) Commissioners shall comply with the reporting requirements of the Fair Political Practices Commission. (p) Commission meetings shall be subject to the requirements of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1). 15372.71. The purpose of the commission is to increase the number of persons traveling to and within California. 15372.72. (a) The commission is a private nonprofit corporation, and not part of state government. Except as provided in Section 15372.73, the staff of the commission shall not be state employees, and the procedures adopted by the commission shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1), nor shall the commission in any other manner be construed to be a public entity. (b) Not later than six months following the initial referendum, the commission shall adopt procedures concerning the operation of the commission in order to provide due process rights for assessed businesses. (c) In the event that the commission fails to adopt the procedures described in subdivision (b) within the specified timeframe, the secretary shall adopt procedures for use by the commission until the commission adopts its own procedures. These procedures shall be exempt from the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1), whether adopted by the commission or secretary. 15372.73. (a) The commission shall be administered by an executive director. That individual shall be a tourism industry marketing professional, recommended by a vote of the commissioners and approved by the Governor. The executive director shall serve at the pleasure of both the commissioners and the Governor. (b) The executive director shall report to and receive overall guidance from the commission, and shall implement the commission's tourism marketing plan. The executive director shall report to the secretary for day-to-day managerial and financial responsibilities. (c) The executive director shall simultaneously serve as the director of the office, and that individual shall be an exempt employee, employed by the state. So long as the commission is in existence, the only director of the office shall be the executive director of the commission. Notwithstanding any other provision of law, the executive director may supervise both employees of the commission and employees of the office, notwithstanding the fact that the commission employees are not employed by the state. (d) The salary and benefits of the executive director shall be determined by the commission, and approved by the secretary, based upon industry standards for a director of a marketing budget of similar size. The entire salary and all benefits of the executive director shall be paid from assessments. 15372.74. (a) The commission shall annually provide to all assessed businesses a report on the activities and budget of the commission including, but not limited to, income and expenses, the fund balance, a summary of the tourism marketing plan, and a report of progress in achieving the goals set forth in the plan. (b) The commission shall maintain a report on the percentage assessment allocation between industry categories and industry segments. The report shall also specify the reasons and methodology used for the allocations. This report shall be updated every time the assessment allocations are amended. The report shall be made available to any assessed business. 15372.75. (a) The commission shall annually prepare, or cause to be prepared, a written marketing plan. In developing the plan, the commission shall utilize, as appropriate, the advice and recommendations of the industry marketing advisory committee or committees established pursuant to subdivision (a) of Section 15372.77. The commission may amend the plan at any commission meeting. All expenditures by the commission shall be consistent with the marketing plan. (b) The plan shall promote travel to and within California, and shall include, but not be limited to, the following: (1) An evaluation of the previous year's budget and activities. (2) Review of California tourism trends, conditions, and opportunities. (3) Target audiences for tourism marketing expenditures. (4) Marketing strategies, objectives, and targets. (5) Budget for the current year. (c) Before final adoption of the plan, the commission shall provide each known destination marketing organization in California notice of the availability of the proposed marketing plan and suitable opportunity, which may include public meetings, to review the plan and to comment upon it. The commission shall take into consideration any recommendations submitted by the destination marketing organizations, except that the final determination as to the nature, extent, and substance of the plan shall in all respects rest solely within the ultimate discretion of the commission. 15372.76. Commissioners and employees of the commission are not responsible individually in any way whatsoever to any person for liability for any good faith activity of the commission. 15372.77. (a) The commission shall establish one or more industry marketing advisory committees, which may include noncommissioners as members. The industry marketing advisory committees shall be structured so that, in the aggregate, they include, to the maximum extent feasible and reasonable, representation from every geographic region of the state and every segment of the state's travel and tourism industry. The commission shall establish procedures for the operation of the industry marketing advisory committees that will provide appropriate opportunity for every geographic region of the state and every segment of the travel and tourism industry to offer advice and recommendations to the commission relative to the development of its written marketing plan pursuant to Section 15372.75. (b) The commission may also establish from time to time any other committees it deems appropriate, and may appoint noncommissioners to the committees. 15372.78. If the commission believes that the administration of the marketing plan will be promoted thereby, the commission may borrow money, with or without interest, to carry out the provisions of the marketing plan, and may hypothecate anticipated assessment collections. Article 5. Secretary 15372.85. (a) The marketing of California tourism is hereby declared to be affected with the public interest. This chapter is enacted in the exercise of the police powers of this state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state. (b) The police powers shall be used to collect assessments not paid by the deadlines established by the secretary. 15372.86. (a) The following powers shall be the responsibility of the secretary: (1) Call referenda in accordance with the procedures set forth in Article 6 (commencing with Section 15372.100) and certify the results. (2) Collect and deposit assessments. (3) Exercise police powers. (4) Pursue actions and penalties connected with assessments. (b) Except as otherwise specified in this chapter, the secretary shall have veto power over the actions of the commission, following consultation with the commission, only under the following circumstances: (1) Travel and expense costs. (2) Situations where the secretary determines a conflict of interest exists, as defined by the Fair Political Practices Commission. (3) The use of any state funds. (4) Any contracts entered into between the commission and a commissioner. 15372.87. (a) Except as otherwise specified in Section 15372.111, the commission may be terminated at any time after the initial four years of operation by referendum of the assessed businesses. (b) Notice of the termination shall be mailed to all assessed businesses. (c) Upon termination, the commission shall continue its existence as a nonprofit corporation for purposes of winding up its affairs and dissolution. (d) Upon termination of the commission established pursuant to this chapter, the California Tourism Commission authorized pursuant to Section 15364.52 shall advise the office, and conduct all other tasks authorized by the California Tourism Policy Act. 15372.88. The secretary may require any and all assessed businesses to maintain books and records that reflect their income or sales as reflected in the assessment, and to furnish the secretary with any information that may, from time-to-time, be requested by the secretary, and to permit the inspection by the secretary of portions of books and records that relate to the amount of assessment. 15372.89. Information pertaining to assessed businesses obtained by the secretary pursuant to this chapter is confidential and shall not be disclosed except to a person with the right to obtain the information, any attorney hired by the secretary who is employed to give legal advice upon it, or by court order. Information obtained by the secretary in order to determine the assessment level for an assessed business is exempt from the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1). 15372.90. For the purpose of carrying out Section 15372.86, the secretary may hold hearings, take testimony, administer oaths, subpoena witnesses, and issue subpoenas for the production of books, records, or documents of any kind. 15372.91. A person shall not be excused from attending and testifying, or from producing documentary evidence, before the secretary in obedience to the subpoena of the secretary pursuant to the authority granted in Section 15372.90 on the ground, or for the reason, that the testimony or evidence, documentary or otherwise, which is required of him or her may tend to incriminate the person or subject that person to a penalty. A natural person shall not, however, be prosecuted or subjected to any penalty on account of any transaction, matter, or thing concerning which he or she may be required to testify, or produce evidence, documentary or otherwise, before the secretary in obedience to a subpoena. A natural person testifying shall not, however, be exempt from prosecution and punishment for perjury committed in so testifying. 15372.92. Any funds appropriated to the office may be used to implement the tourism marketing plan specified in Section 15372.75 or, if the commission is not in existence, Section 15364.52. In addition to any other authority for the office to spend funds, state funds may be used for the following: research, conducting and advertising referenda, administration of state funds, policing, collection of assessments, and contracting for assistance in obtaining information on businesses to be assessed. 15372.93. The office may contract with the commission in order for the commission to undertake marketing activities utilizing state funds, and Section 10295, and Article 4 (commencing with Section 10335) and Article 5 (commencing with Section 10355) of Chapter 2 of Part 2 of Division 2 of the Public Contract Code shall not apply to those agreements. Article 6. Referendum 15372.100. (a) A referendum shall be called every two years, commencing on the second anniversary of the initial referendum. (b) The first referendum following the initial referendum shall solely determine the new set of commissioners by adopted resolution. At that referendum, the assessment target shall be twenty-five million dollars ($25,000,000). The assessment formula shall remain the same and the commission shall continue its existence. As used in this article and Article 7 (commencing with Section 15372.105) "assessment level" means the estimated gross dollar amount received by assessment from all assessed businesses on an annual basis, and "assessment formula" means the allocation method used within each industry segment (for example, percentage of gross revenue). (c) Commencing with the third referendum, the commission shall, by adopted resolution, determine the slate of individuals who will run for commissioner. The resolution may also include: the proposed assessment levels, assessment formulae, and whether the commission shall continue in existence. The commission may specify in the resolution that a special, lower assessment rate that was set pursuant to subdivision (c) of Section 15372.66 for a particular business will no longer apply due to changes in the unique circumstance that originally justified the lower rate. The resolution may include up to three possible assessment levels, from which the assessed businesses will select one assessment level by plurality weighted vote. (d) The commission shall deliver to the secretary the resolution described in subdivision (b) or (c). The secretary shall call a referendum containing the information required by subdivision (b) or (c) plus any additional matters complying with the procedures of subdivision (b) of Section 15372.102. (e) When the secretary calls a referendum, all assessed businesses shall be sent a ballot for the referendum. Every ballot that the secretary receives by the ballot deadline shall be counted, utilizing the weighted formula adopted initially by the selection committee, and subsequently amended by referendum. (f) If the referendum includes more than one possible assessment rate, the rate with the plurality of weighted votes shall be adopted. (g) The initial referendum shall, if possible, be held within 180 days of receipt by the Governor of the selection committee report. The secretary shall call the referendum. (h) Referenda can cover one or more of the following subjects: (1) Assessment level, based upon specified assessment formulae. (2) Amended industry segment allocation formula. (3) Percentage allocation of assessments between industry categories and segments. (4) Election of commissioners. (5) Termination of the commission. (6) For the initial referendum, whether to have an assessment. {- 15372.101. (a) The costs of the initial referendum shall be paid by the office. The costs of marketing and promoting the initial referendum shall be provided by private donations deposited in the Commerce Marketing Fund. The office shall coordinate the marketing and promotion of the initial referendum with the advice of, and in consultation with, appropriate representatives of the tourism industry, and shall ensure that the referendum promotion is unbiased -} {+ 15372.101. (a) The costs of marketing and promoting the initial referendum shall be provided by private payments. The office shall coordinate the marketing and promotion. The costs of the initial referendum shall be paid by the office. The office shall coordinate the referendum to ensure that it is unbiased +} and factually correct. In the event that the initial referendum fails in the first attempt at passage, subsequent attempts at passage of the initial referendum shall be permitted, except that the costs of conducting the subsequent attempts at passage, along with the costs of marketing and promoting those attempts at passage, shall be provided by private {- donations deposited in the Commerce Marketing Fund -} {+ payments +} . Subsequent attempts at passage shall be conducted in the manner specified in this subdivision. In the event that the initial referendum passes, whether on the first attempt at passage or a subsequent attempt at passage, the private {- donors -} {+ payers +} and the office shall be reimbursed for all of their respective initial referendum costs from assessments first received. (b) The ongoing referendum costs shall be paid by the commission. 15372.102. (a) Commencing with the third referendum, assessed businesses may place on a referendum additional candidates for commissioner, a different assessment level, or both. (b) Except for the referendum that occurs four years from the initial referendum, a minimum of 20 percent of the assessed businesses (calculated by weighted percentages) must signify their agreement to add different assessment levels to the items included in the referendum. For the referendum occurring four years from the initial referendum, a minimum of 10 percent of the assessed businesses (calculated by weighted percentages) must signify agreement. (c) A minimum of 10 percent of the assessed businesses (calculated by weighted percentages) must signify their agreement to add candidates for commissioner to the items included in the referendum. 15372.103. (a) Upon receipt of the resolution required by Section 15372.100, including any assessed business referendum request pursuant to Section 15372.102, the secretary shall establish a referendum period not to exceed 60 days. If the secretary determines that the referendum period so established does not provide sufficient time for the balloting, the secretary may extend the referendum period not more than 15 additional days. At the close of the referendum period, the secretary shall count and tabulate the ballots filed during the referendum period. (b) The secretary shall establish a deadline for adoption of the resolution described in subdivision (a). If the commission fails to meet this deadline, or if the adopted resolution fails to meet the requirements of this chapter, then assessed businesses may present a slate of candidates to the secretary not later than 60 days following the deadline established for the commission resolution. A minimum of 10 percent of weighted voters must sign the document presenting the slate. (c) In the event that the secretary does not receive a resolution required by Section 15372.100 from the commission by the deadline established pursuant to subdivision (b) or the resolution does not comply with the requirements of this chapter and the assessed businesses fail to present a slate pursuant to subdivision (b), then the secretary shall select a slate of commissioners and this slate, added to any assessed business referendum requests pursuant to Section 15372.102, shall constitute the items included in the referendum. 15372.104. (a) Each assessed business is entitled to a weighted vote in each referendum. In calculating weighted votes, each assessed business receives a vote equal to the relative assessment paid by that business. An assessed business paying nine hundred dollars ($900) in annual assessments has three times the weighted vote of a business paying three hundred dollars ($300). Weighted votes are used to determine all issues on the referendum. The initial referendum, and any referendum item to terminate the commission, must be approved by a majority of the weighted votes cast at the referendum. The amount of assessment and selection of commissioners is determined by the most weighted votes, whether or not there is a majority. (b) Each assessed business is part of one industry category and one industry segment. A business with revenue in more than one industry category or industry segment shall be included in the category and segment in which it earns the most gross revenue. (c) Each assessed business is eligible to vote for each item on the referendum, except that an assessed business can only vote for commissioners representing its industry category, and industry segment formulae for its industry segment. (d) A business is not eligible to vote unless it has paid all assessments and fines outstanding as of a date established by the secretary. Article 7. Assessments 15372.105. (a) Each industry category shall establish a committee to determine the following within its industry category: industry segments, assessment formula for each industry segment, and any types of business exempt from assessment. The initial segment committees shall consist of the subcommittee for that category as described in subdivision (c) of Section 15372.66. Following approval of the assessment by referendum, the committees shall be selected by the commission, based upon recommendations from the tourism industry. Committee members need not be commission members. (b) The committee recommendations shall be presented to the commission or selection committee, as applicable. The selection committee may adopt a resolution specifying some or all of the items listed in subdivision (a), plus an allocation of the overall assessment among industry categories. The commission may adopt a resolution specifying one or more of the items listed in subdivision (a), plus an allocation of the proposed assessment. The selection committee and commission are not required to adopt the findings of any committee. (c) The initial industry category and industry segment allocations shall be included in the selection committee report required by subdivision (b) of Section 15372.66. Changes to the industry segment allocation formula may be recommended to the commission by a segment committee at the biennial commission meeting scheduled to approve the referendum resolution pursuant to Section 15372.100. At the same meeting, the commission may amend the percentage allocations among industry categories. Any item discussed in this section that is approved by resolution of the commission, except amendments to the percentage allocations among industry categories, shall be placed on the next referendum, and adopted if approved by the weighted majority of votes cast. (d) Upon approval by referendum, the office shall calculate the assessments due by each assessed business, and mail an assessment bill to each assessed business. The secretary shall determine how often assessments are collected, based upon available staffing resources. The secretary may stagger the assessment collection throughout the year, and {- to -} charge businesses a prorated amount of assessment because of the staggered assessment period. The secretary and office shall not divulge the amount of assessment or weighted votes of any assessed businesses, except as part of an assessment action. (e) An assessed business may appeal an assessment to the secretary based upon the fact that the business does not meet the definition established for an assessed business within its industry segment or that the level of assessment is incorrect. If the error is based upon failure of the business to provide the required information in a timely manner, the secretary may fine the business as a condition of correcting the assessment. (f) Notwithstanding any other provision of law, an assessed business may pass on some or all of the assessment to customers. An assessed business that is passing on the assessment may, but shall not be required to, separately identify or itemize the assessment on any document provided to a customer. Assessments levied pursuant to this chapter are not part of gross receipts or gross revenue for any purpose, including the calculation of sales {+ or use +} tax and income pursuant to any lease {+ ; however, assessments that are passed on to customers shall be included in gross receipts for purposes of income and franchise taxes +} . 15372.106. If approved by referendum, the initial assessment level shall be approximately twenty-five million dollars ($25,000,000). This figure is a target, and shall serve as the basis for setting assessment formulae, but the actual amount of collected assessments may be more or less than the assessment level. 15372.107. Assessments may be used in furtherance of the purposes set forth in Section 15372.71, or to fund the costs pursuant to Section 15372.92. Assessments may be used to fund these costs regardless of whether the work was performed by the office or commission. 15372.108. Notwithstanding any other provision of law, the secretary may utilize any and all records held by the state in order to establish and maintain an accurate list of {- assessed businesses -} {+ businesses to be assessed +} , including information necessary to determine the amount of assessment owed by a business. 15372.109. (a) The secretary shall establish a list of {- assessed businesses -} {+ businesses to be assessed +} and the amount of assessment owed by each. The secretary shall collect the assessment from all assessed businesses, and in collecting the assessment the secretary may exercise the police powers and bring enforcement actions. (b) Funds collected by the secretary shall be deposited into the account of the commission. This account shall not be an account of the state government. {+ (c) Any costs relating to the collection of assessments incurred by the state shall be reimbursed by the commission. +} 15372.110. (a) The office shall develop a list of California businesses within each segment included within the report required by subdivision (b) of Section 15372.66, periodically updated. Other state agencies shall assist the office in obtaining the names and addresses of these businesses. (b) The office shall mail to each business identified pursuant to subdivision (a) a form requesting information necessary to determine the assessment for that business. Any business failing to provide this information in a timely manner shall be assessed an amount determined by the secretary to represent the upper assessment level for that segment. (c) Subject to approval by the commission, the office shall establish by regulation the procedure for assessment collection. 15372.111. (a) Funding for the commission is a cooperative venture. It is the intent of the Legislature that the state shall be responsible for appropriating a minimum of seven million {- five -} {+ three +} hundred thousand dollars {- ($7,500,000) -} {+ ($7,300,000) +} each fiscal year to tourism, and the industry shall be responsible for targeting the level of assessments for each fiscal year at twenty-five million dollars ($25,000,000) or more pursuant to Section 15372.106. The industry may terminate the commission by referendum at any time, including during the initial four years, if the state fails to appropriate seven million {- five -} {+ three +} hundred thousand dollars {- ($7,500,000) -} {+ ($7,300,000) +} in any fiscal year, and the state may decide not to appropriate funding in the event that the commission fails to target its annual assessment level at or above the level set for the initial referendum in any fiscal year. Termination of the commission by the industry shall require an adopted resolution of the commission to either include this issue in a regularly scheduled referendum, or to call a special referendum to decide the issue. (b) The assessed funds shall be audited annually. (c) The assessed funds shall be under the control of the commission, which shall spend the funds consistent with commission policies and the tourism marketing plan. The state shall have no interest in the fund except the general state interest that the state has in nonprofit corporations. 15372.112. Any assessment levied as provided in this chapter is a personal debt of every person so assessed and shall be due and payable to the secretary. If any assessed person fails to pay any assessment, the secretary may file a complaint against the person in a state court of competent jurisdiction for the collection of the assessment. 15372.113. If any assessed business that is duly assessed pursuant to this chapter fails to pay to the secretary the assessed amount by the due date, the secretary may add to the unpaid assessment an amount not to exceed 10 percent of the unpaid assessment to defray the cost of enforcing the collection of the unpaid assessment. In addition to payment for the cost of enforcing a collection, the assessed business shall pay to the secretary a penalty equivalent to the lesser of either the maximum amount authorized by Section 1 of Article XV of the California Constitution or 5 percent for each 30 days the assessment is unpaid, prorated over the days unpaid, commencing 30 days after the notice has been given to the assessed business of his or her failure to pay the assessment on the date required, unless the secretary determines, to his or her satisfaction, that the failure to pay is due to reasonable cause beyond the control of the assessed business. 15372.114. The secretary may require assessed businesses to deposit with him or her in advance the following amounts: (a) An amount for necessary expenses. (b) An amount that shall not exceed 25 percent of the assessment to cover costs that are incurred prior to the receipt of sufficient funds from the assessment. (c) The amount of any deposit that is required by the secretary shall be based upon the estimated assessment for the assessed business. 15372.115. In lieu of requiring advance deposits pursuant to Section 15372.114, or in order generally to provide funds for defraying administrative expenses or the expenses of implementing the tourism marketing plan until the time that sufficient moneys are collected for this purpose from the payment of the assessments that are established pursuant to this chapter, the secretary may receive and disburse for the express purposes contributions that are made by assessed businesses. If, however, collections from the payment of established assessments are sufficient to so warrant, the secretary shall authorize the repayment of contributions, or authorize the application of the contributions to the assessment obligations of persons that made the contributions. 15372.116. Upon termination of the commission, any remaining funds that are not required by the secretary to defray commission expenses shall be returned by the secretary upon a pro rata basis, to all persons from whom the assessments were collected unless the secretary finds that the amounts to be returned are so small as to make impractical the computation and remitting of the pro rata refund to the appropriate persons. If the secretary makes a finding that returning the remaining funds would be impractical, he or she may use the moneys in the fund to defray the costs of the office. 15372.117. Any check or warrant that is drawn against the funds of the commission that remains unclaimed or uncashed for a period of six months from the date of issuance shall be canceled and the money retained for disbursement to the original payee or claimant upon satisfactory identification for a period of one year from the time the check or warrant is canceled. The money so retained, if not claimed within the period of one year, shall be used for administration of the commission, and in furtherance of the tourism marketing plan. 15372.118. A business is exempt from the assessments provided for in this chapter if the business is a travel agency or tour operator that derives less than 20 percent of its gross revenue from travel and tourism occurring within the state. A travel agency or tour operator that qualifies for this exemption may pay the assessment by filing a written request with the secretary indicating its desire to be categorized as an assessed business. Article 8. Actions and Penalties 15372.120. Any action for any penalty or other remedy that is prescribed under any provision of this chapter shall be commenced within three years from the date of the alleged violation. 15372.121. Every person who provides false information concerning an assessment or pursuant to Section 15372.124 is guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000) or by imprisonment of not less than 10 days nor more than six months, or by both the fine and imprisonment. 15372.122. Any person who files false information concerning an assessment is civilly liable in an amount of not more than ten thousand dollars ($10,000), in addition to any amount owed as the assessment. 15372.123. (a) When the secretary makes a determination that an assessment is deficient as to the payment due, the secretary may determine the amount of the deficiency, including any applicable penalty, as provided in this chapter. After giving notice that a deficiency determination is proposed and an opportunity to file a report or provide supplemental information is provided, the secretary may make one or more deficiency determinations of the amount due for any reporting period based on information in the secretary's possession. When an assessed business is discontinued, a deficiency determination may be made at anytime thereafter as to the liability arising out of the operation of that business. (b) The secretary shall give notice of the proposed deficiency determination and the notice of deficiency determination by mailing a copy of the deficiency to the assessed business at the current address for that business on file with the secretary. The giving of notice is complete at the time of deposit in the United States mail. In lieu of mailing, a notice may be served personally by delivering it to the person to be served. (c) Except in the case of fraud or failure to file required information, a notice of a deficiency determination shall be given within four years of the accrual of the deficiency. (d) The person against whom a deficiency determination is made may petition the secretary for redetermination within 30 days after the serving of the notice of deficiency determination. If a petition is not filed within 30 days, the deficiency determination shall become final. (e) A petition for redetermination shall be in writing, state the specific grounds upon which it is based, and be supported by applicable records and declarations under penalty of perjury that the information supporting the petition is accurate and complete. If a petition for redetermination is duly filed, the secretary shall reconsider the deficiency determination and may grant a hearing thereon. The secretary shall, as soon as practicable, make an order on redetermination, which shall become final 30 days after service of notice of the order of redetermination upon the petitioner. The notice of the order shall be served in the same manner as the notice of the original deficiency determination. (f) If any amount required to be paid pursuant to a deficiency determination or redetermination is not paid within the time specified in the notice thereof, the secretary may, within four years thereafter, file in the Superior Court in the County of Sacramento, or the superior court in any other county, a certificate specifying the amount required to be paid, the name and address of the person liable as it appears on the records of the secretary, and a request that judgment be entered against the person in that amount 30 days after the filing. Notice of the filing shall be given in the same manner as for the notice of deficiency determination. The court shall enter a judgment in conformance with the secretary's certificate 30 days after its filing, unless a petition for judicial review has been filed within the 30-day period. (g) An abstract of the judgment, or a copy thereof, may be filed with the county recorder of any county. From the time of filing of the judgment, the amount of the judgment constitutes a lien upon all of the property in the county owned by the judgment debtor. The lien has the force, effect and priority of a judgment lien and shall continue for 10 years from the date of the judgment, unless sooner released or otherwise discharged. The lien imposed by this section is not valid insofar as personal property is concerned against a purchaser of value without actual knowledge of the lien. (h) Execution shall issue upon the judgment upon request of the secretary in the same manner as execution may issue upon other judgments, and sales shall be held under execution as prescribed in the Code of Civil Procedure. (i) The person named in a notice of deficiency determination or redetermination may, within 30 days of the notice of filing with the superior court, file an action for judicial review thereof, as provided herein, in the Superior Court in the County of Sacramento or, with the secretary's consent, the superior court in any other county. As a condition of staying entry of judgment or granting other relief, the court shall require the filing of a corporate surety bond with the secretary in the amount of the deficiency stated in the certificate. In any court proceeding, the certificate of the secretary determining the deficiency shall be prima facie evidence of the fee and the amount due and unpaid. (j) The provisions of this section are supplemental to any other procedures for collection and imposition of fees and penalties provided by this chapter. (k) In lieu of proceeding pursuant to this section, the secretary may file a complaint for collection of unpaid assessments as provided by law. 15372.124. It is a violation of this chapter for any person to willfully render or furnish a false or fraudulent report, statement, or record that is required by the secretary pursuant to any provision of this chapter. 15372.125. Any suit brought by the secretary to enforce any provision of this chapter, or any regulation, or rule and regulation, that is issued by the secretary shall provide that the defendant pay to the secretary the costs that were incurred by the secretary and by the commission in the prosecution of the action in the event the secretary prevails in the action. Any money that is recovered shall reimburse the account or accounts used to pay the costs. Article 9. Miscellaneous 15372.130. In any civil or criminal action or proceeding for violation of any of the following, proof that the act that is complained of was done in compliance with the provisions of this chapter is a complete defense to the action or proceeding: (a) The Cartwright Act, Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code. (b) The Unfair Practices Act, Chapter 4 (commencing with Section 17000) of Part 2 of Division 7 of the Business and Professions Code. (c) Any rule of statutory or common law against monopolies or combinations in restraint of trade. 15372.131. If any section, sentence, clause, or part of this chapter or the application thereof to any person or circumstance is for any reason held to be invalid, that invalidity shall not affect the remaining provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable. The Legislature hereby declares that it would have passed this chapter and each section, sentence, clause, and part of this chapter despite the fact that one or more sections, sentences, clauses, or parts of this chapter is declared invalid. SEC. 6. {+ Section 19559 is added to the Revenue and Taxation Code, to read: 19559. (a) Subject to the limitations of this section and federal law, the Franchise Tax Board may provide the Secretary of Trade and Commerce, when that person is acting in any capacity authorized by Chapter 2.2 (commencing with Section 15372.60) of Part 6.7 of Division 3 of Title 2 of the Government Code, with all of the following: (1) The names and addresses or other identification or location information from income or franchise tax returns or other records required under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part, solely for the purposes of establishing and maintaining an accurate list of businesses to be assessed pursuant to Chapter 2.2 (commencing with Section 15372.60) of Part 6.7 of Division 3 of Title 2 of the Government Code. (2) Sufficient financial data from income and franchise tax returns solely for purposes of verifying the base upon which the assessment is determined. (b) Neither the Trade and Commerce Agency, nor its agents, nor any of its current or former officers or employees, nor any current or former members, employees, or agents of the California Tourism Marketing Commission, shall disclose or use any information obtained pursuant to this section except as provided in this section. Any disclosure not authorized by this section is a misdemeanor. (c) The Franchise Tax Board may from time to time review the use of information provided to the Secretary of Trade and Commerce pursuant to this section and the Secretary of Trade and Commerce shall provide the Franchise Tax Board with access for that purpose. The reviews shall be limited to ensuring that the Secretary of Trade and Commerce uses the information provided by the Franchise Tax Board only in the manner specified in subdivision (a). The Franchise Tax Board shall report all findings to the Secretary of Trade and Commerce. SEC. 7. +} No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. Notwithstanding Section 17580 of the Government Code, unless otherwise specified, the provisions of this act shall become operative on the same date that the act takes effect pursuant to the California Constitution.