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Energy Resources Surcharge Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 19. Energy Resources Surcharge Law

Chapter 5. Overpayments and Refunds

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Chapter 5. Overpayments and Refunds

Article 1. Claim for Refund

40111. Credits and refunds. (a) If the department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the department shall set forth that fact in the records of the department, certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid, and shall credit the excess amount collected or paid on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or the person’s successors, administrators, or executors. Any determination by the department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days after the effective date of that determination.

(b) Any overpayment of the surcharge by a consumer to the state shall be credited or refunded by the state to the consumer.

(c) (1) Except as provided in paragraph (2), any overpayment of the surcharge by the consumer to an electric utility that is required to collect the surcharge shall be refunded by the state to the consumer.

(2) If the electric utility has paid the amount to the department and establishes to the satisfaction of the department that it has not collected the amount from the consumer or has refunded the amount to the consumer, the overpayment may be credited or refunded by the state to the electric utility.

History—Stats. 1977, Ch. 921, effective January 1, 1978, substituted "five thousand dollars ($5,000)" for "one thousand dollars ($1,000)" in the second paragraph. Stats. 1985, Ch. 591, effective January 1, 1986, substitutes "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" in paragraph 2. Stats. 1988, Ch. 1029, in effect January 1, 1989, added "or her" before "successors" in the first and second paragraphs, and substituted "fifty thousand dollars ($50,000)" for "fifteen thousand dollars ($15,000)" in paragraph 2. Stats. 1994, Ch. 726, in effect September 22, 1994, substituted ", certify" for "and shall certify to the State Board of Control" after "records of the board"; substituted ", and shall credit the excess amount collected or paid" for ". If approved by the State Board of Control the excess amount collected or paid shall be credited by the board" after "by whom paid"; added "Any proposed determination … of that determination." in the first paragraph; and deleted the second paragraph which read: "In the case, however, of a determination by the board that an amount not exceeding fifty thousand dollars ($50,000) was not required to be paid under this part, the board without obtaining the approval of the State Board of Control may credit the amount on any amounts then due and payable under this part from the person by whom the amount was paid and may refund the balance to the person or his or her successors, administrators, or executors." Stats. 1995, Ch. 555, in effect January 1, 1996, added subdivision letters (a) and (b) and added subdivision (c). Stats. 2022, Ch. 474 (SB 1496), in effect January 1, 2023, substituted "department" for "board" throughout the section; substituted "the person’s" for "his or her" before "successors" in first sentence of subdivision (a); deleted "proposed" before "determination" and substituted "after" for "prior to" in the second sentence of subdivision (a).

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40112. Refund and credit limitations. (a) Except as provided in subdivision (b), no refund shall be approved by the board after three years from the last day of the month following the close of the quarterly period for which the overpayment was made, or, with respect to determinations made under Article 3 (commencing with Section 40071) or 4 (commencing with Section 40081) of Chapter 4 of this part, after six months from the date the determinations become final, or after six months from the date of overpayment, whichever period expires the later, unless a claim therefor is filed with the board within such period. No credit shall be approved by the board after the expiration of such period unless a claim for credit is filed with the board within such period.

(b) A refund may be approved by the board for any period for which a waiver is given under Section 40079 if a claim therefor is filed with the board before the expiration of the period agreed upon.

History—Stats. 1977, Ch. 624, effective January 1, 1978, added "(a) Except as provided in subdivision (b)," at the beginning of the first line, and added new paragraph (b).

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40112.1. Claim limitation period; financially disabled. (a) The limitation period specified in Section 40112 shall be suspended during any period of a person's life that the person is financially disabled.

(b) (1) For purposes of subdivision (a), a person is financially disabled if the person is unable to manage his or her financial affairs by reason of medically determinable physical or mental impairment of the person which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A person shall not be considered to have an impairment unless proof of the existence thereof is furnished in the form and manner as the board may require.

(2) A person shall not be treated as financially disabled during any period that the person's spouse or any other person is authorized to act on behalf of the person in financial matters.

(c) This section applies to periods of disability commencing before, on, or after the effective date of the act adding this section, but does not apply to any claim for refund that (without regard to this section) is barred by the operation or rule of law, including res judicata, as of the effective date of the act adding this section.

History—Added by Stats. 2000, Ch. 1052 (AB 2898), in effect January 1, 2001.

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40112.2. Claim limitation period; overpayments from levies or liens. Notwithstanding Section 40112, a refund of an overpayment of any surcharge, penalty, or interest collected by the board by means of levy, through the use of liens, or by other enforcement procedures, shall be approved if a claim for a refund is filed within three years of the date of an overpayment.

History—Added by Stats. 2006, Ch. 364 (AB 3076), in effect January 1, 2007.

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40112.3. Refund claim where tax has not been paid in full; timely filing. (a) A claim for refund that is otherwise valid under Sections 40112 and 40113 that is made in the case in which the amount of surcharge determined has not been paid in full shall be deemed to be a timely filed claim for refund with respect to all subsequent payments applied to that determination.

(b) For purposes of this section, "amount of surcharge determined" means an amount of surcharge, interest, or penalty, with respect to a single determination made under Article 3 (commencing with Section 40071) or Article 4 (commencing with Section 40081) of Chapter 4.

(c) This section shall apply to all claims for refund on or after the effective date of the act adding this section.

History—Added by Stats. 2016, Ch. 98 (AB 1856), in effect January 1, 2017.

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40113. Form and content of claim. Every claim shall be in writing and shall state the specific grounds upon which the claim is founded.

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40114. Effect of failure to file claim. Failure to file a claim within the time prescribed in this article constitutes a waiver of any demand against the state on account of overpayment.

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40115. Notice of action on claim. Within 30 days after disallowing any claim in whole or in part the board shall give notice of its action to the claimant in the manner prescribed for service of notice of a deficiency determination.

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40116. Interest on overpayment. Interest at the modified adjusted rate per month established pursuant to Section 6591.5, shall be paid upon any overpayment of any amount of surcharge from the first day of the calendar month following the month during which the overpayment was made. In addition, a refund or credit shall be made of any interest imposed upon the person making the overpayment with respect to the amount being refunded or credited.

The interest shall be paid as follows:

(a) In the case of a refund, to the last day of the calendar month following the date upon which the person making the overpayment, if he or she has not already filed a claim, is notified by the board that a claim may be filed or the date upon which the claim is approved by the board, whichever date is the earlier.

(b) In the case of a credit, to the same date as that to which interest is computed on the surcharge or amount against which the credit is applied.

History—Stats. 1977, Ch. 624, effective January 1, 1978, deleted "at the rate of one-half of 1 percent per month" from the first sentence, and added new paragraph (c). Stats. 1982, Ch. 5, First Extra Session, in effect May 27, 1982, substituted "adjusted … 19269" for "rate … thereafter" after "at the" in subdivision (c). Stats. 1984, Ch. 1020, operative July 1, 1985, added "at … Section 6591.5" after "interest", added "or she" after "he", and deleted paragraph (c). Stats 1992, Ch. 1336, in effect January 1, 1993, substituted "first" for "last" after "from the", and substituted "month during … addition, a" for "quarterly period for which the overpayment was made; but no" after "month following" in the first paragraph. Stats. 1997, Ch. 620 (SB 1102), in effect January 1, 1998, deleted ", or fraction thereof," after "rate per month" in the first sentence of the first paragraph and added "calendar" after "day of the" in subdivision (a).

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40117. Disallowance of interest. (a) If the board determines that any overpayment has been made intentionally or by reason of carelessness, it shall not allow any interest thereon.

(b) If any person who has filed a claim for refund requests the board to defer action on the claim, the board, as a condition to deferring action, may require the claimant to waive interest for the period during which the person requests the board to defer action on the claim.

History—Stats. 1998, Ch. 420 (SB 2230), in effect January 1, 1999, added subdivision designation "(a)" and added subdivision (b).

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Article 2. Cancellations

40121. Cancellation of illegal determinations. If any amount has been illegally determined either by the person filing the return or by the board, the board shall set forth that fact in its records, certify the amount determined to be in excess of the amount legally due and the person against whom the determination was made, and authorize the cancellation of the amount upon the records of the board. Any proposed determination by the board pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days prior to the effective date of that determination.

History—Stats. 1977, Ch. 921, effective January 1, 1978, substituted "five thousand dollars ($5,000)" for "one thousand dollars ($1,000)" in the first and last sentences. Stats. 1985, Ch. 591, effective January 1, 1986, substitutes "fifteen thousand dollars ($15,000)" for "five thousand dollars ($5,000)" in first and third sentences. Stats. 1988, Ch. 1029, in effect January 1, 1989, substituted "fifty thousand dollars ($50,000)" for "fifteen thousand dollars ($15,000)" in the first and last sentences. Stats. 1994, Ch. 726, in effect September 22, 1994, deleted "in excess of fifty thousand dollars ($50,000)" after "If any amount"; substituted a comma for "and" after "in its records"; deleted "to the State Board of Control" after "certify"; substituted ", and" for ". If the State Board of Control approves, it shall" after "determination was made"; and substituted "Any proposed determination … of that determination" for "If an amount not exceeding fifty thousand dollars ($50,000) has been illegally determined either by the person filing a return or by the board, the board without certifying this fact to the State Board of Control shall authorize the cancellation of the amount upon the records of the board".

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Article 3. Suit for Refund

40125. Enjoining collection forbidden. No injunction, or writ of mandate, judgment of declaratory relief, or other legal or equitable process shall issue in any suit, action, or proceeding in any court against the state or against any officer of the state to prevent or enjoin the collection under this part of any surcharge, or any amount of surcharge required to be collected.

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40126. Necessity of refund claim. No suit or proceeding shall be maintained in any court for the recovery of any amount alleged to have been erroneously or illegally determined or collected unless a claim for refund or credit has been duly filed pursuant to Article 1 of this chapter.

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40127. Refund action limitations. Within 90 days after the mailing of the notice of the board's action upon a claim filed pursuant to Article 1 (commencing with Section 40111) of this chapter, the claimant may bring an action against the board on the grounds set forth in the claim in a court of competent jurisdiction in any city or city and county of this state in which the Attorney General has an office for the recovery of the whole or any part of the amount with respect to which the claim has been disallowed.

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40128. When refund claim not acted upon. If the board fails to mail notice of action on a claim within six months after the claim is filed, the claimant may, prior to the mailing of notice by the board of its action on the claim, consider the claim disallowed and bring an action against the board on the grounds set forth in the claim for the recovery of the whole or any part of the amount claimed as an overpayment.

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40129. Disposition of judgment. If judgment is rendered for the plaintiff, the amount of the judgment shall first be credited on any surcharge due and payable from the plaintiff. The balance of the judgment shall be refunded to the plaintiff.

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40130. Interest. In any judgment, interest shall be allowed at the modified adjusted rate per annum established pursuant to Section 6591.5, upon the amount found to have been illegally collected from the date of payment of the amount to the date of allowance of credit on account of the judgment or to a date preceding the date of the refund warrant by not more than 30 days, the date to be determined by the board.

History—Stats. 1977, Ch. 624, added "to and including December 31, 1977, and at the rate of 12 percent per annum thereafter" following "6 percent per annum". Stats. 1982, Ch. 5, first Extra Session, in effect May 27, 1982, substituted "adjusted … 19269" for "rate … thereafter" before "upon." Stats. 1984, Ch. 1020, operative July 1, 1985, added "modified" before "adjusted," deleted "annual" before "rate," added "per annum" after "rate," and substituted "Section 6591.5" for "Section 19269".

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40131. Judgment for assignee forbidden. A judgment shall not be rendered in favor of the plaintiff in any action brought against the board to recover any amount paid when the action is brought by or in the name of an assignee of the person paying the amount or by any person other than the person who paid the amount.

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Article 4. Recovery of Erroneous Refunds*

* Added by Stats. 1998, Ch. 609 (SB 2232), in effect January 1, 1999.

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40135. Erroneous refunds; action. (a) The board may recover any refund or part thereof that is erroneously made, and any credit or part thereof that is erroneously allowed, in an action brought in a court of competent jurisdiction in the County of Sacramento in the name of the people of the State of California.

(b) As an alternative to subdivision (a), the board may recover any refund or part thereof that is erroneously made, and any credit or part thereof that is erroneously allowed. In recovering any erroneous refund or credit, the board may, in its discretion, issue a deficiency determination in accordance with Article 3 (commencing with Section 40071) of Chapter 4. Except in the case of fraud, the deficiency determination shall be made by the board within three years from the date of the Controller's warrant or date of credit.

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40136. Place of trial. In any action brought pursuant to subdivision (a) of Section 40135, the court may, with the consent of the Attorney General, order a change in the place of trial.

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40137. Rules of procedure, etc. The Attorney General shall prosecute any action brought pursuant to subdivision (a) of Section 40135, and the provisions of the Code of Civil Procedure relating to service of summons, pleadings, proof, trials, and appeals shall apply to the proceedings.

Note.—SEC. 61. of Stats. 1998, Ch. 609 (SB 2232), effective January 1, 1999, states: It is the intent of the Legislature in enacting those provisions of this act that allow the State Board of Equalization to recover refunds administratively that no increase in taxpayer costs result from taxpayer compliance with these provisions.