Corporation taxes: exempt organizations: mutual ditch or irrigation companies: public water system: mutual water companies.

The Corporation Tax Law, in modified conformity with federal income tax laws, exempts various types of organizations from taxes imposed by that law, including an exemption for transfers of assets by specified mutual water companies that are tax exempt under federal income tax laws, but are a taxable entity under state law when certain conditions are met. Existing law requires mutual water companies that operate a public water system to comply with various open meeting and record accessibility requirements for eligible persons, defined to include shareholders, specified persons receiving drinking water from that public water system, and elected officials of a city or county who represent those persons receiving drinking water from the public water system. This bill, for taxable years beginning on or after January 1, 2019, and before January 1, 2024, would exempt from the taxes imposed by the Corporation Tax Law a mutual ditch or irrigation company that operates a public water system if the company complies with specified requirements, including those open meeting and record accessibility requirements for eligible persons. The bill would provide that gross income does not include specified funding provided by the State Water Resources Control Board to a mutual ditch or irrigation company that operates a public water system or to specified mutual water companies. This bill would require a mutual water company to adopt policies to comply with the open meeting and record accessibility requirements described above and to submit the policies and a certification of compliance to the State Water Resources Control Board by June 30th of each year. The bill would require the State Water Resources Control Board to charge a specified compliance fee to any company that does not comply with these provisions by June 30th of each year but subsequently submits its policies and certification. By requiring the board to charge a specified fee for use by the board to administer these provisions, this bill would make an appropriation. The bill would require the State Water Resources Control Board to submit to the Franchise Tax Board by September 30th of each year a list of mutual water companies that have complied with these provisions for purposes of obtaining the exemption.