California Revenue and Taxation Code § 17276.7

(a) The term “qualified taxpayer” as used in Section 17276.1 includes a person or entity that conducts a farming business that is directly affected by Pierce’s disease and its vectors. For purposes of this subdivision, all of the following shall apply: (1) A net operating loss shall not be a net operating loss carryback to any taxable year, and a net operating loss for any taxable year beginning on or after the date that the area in which the taxpayer conducts a farming business is affected by Pierce’s disease and its vectors shall be a net operating loss carryover to each of the nine taxable years following the taxable year of loss, until used. (2) For purposes of this subdivision: (A) “Net operating loss” means the loss determined under Section 172 of the Internal Revenue Code, as modified by Section 17276.1, attributable to the taxpayer’s farming business activities affected by Pierce’s disease and its vectors. That attributable loss shall be determined in accordance with Chapter 17 (commencing with Section 25101) of Part 11, modified for purposes of this subdivision, as follows: (i) A loss shall be apportioned to the area affected by Pierce’s disease and its vectors by multiplying the total loss from the farming business by a fraction, the numerator of which is the property factor plus the payroll factor, and the denominator of which is two. (ii) “The area affected by Pierce’s disease and its vectors” shall be substituted for “this state.” (B) A net operating loss carryover computed under this section shall be allowed as a deduction only with respect to the taxpayer’s farming business income attributable to the area affected by Pierce’s disease and its vectors. (C) Attributable income is that portion of the taxpayer’s California source farming business income that is apportioned to the area affected by Pierce’s disease and its vectors. For that purpose, that taxpayer’s farming business income attributable to sources in this state first shall be determined in accordance with Chapter 17 (commencing with Section 25101) of Part 11. That farming business income shall be further apportioned to the area affected by Pierce’s disease and its vectors in accordance with Article 2 (commencing with Section 25120) of Chapter 17 of Part 11, modified for purposes of this subdivision as follows: (i) Farming business income shall be apportioned to the area affected by Pierce’s disease and its vectors by multiplying the total California farming business income of the taxpayer by a fraction, the numerator of which is the property factor plus the payroll factor, and the denominator of which is two. For purposes of this paragraph: (I) The property factor is a fraction, the numerator of which is the average value of the taxpayer’s real and tangible personal property owned or rented and used in the area affected by Pierce’s disease and its vectors during the taxable year, and the denominator of which is the average value of all the taxpayer’s real and tangible personal property owned or rented and used in this state during the taxable year. (II) The payroll factor is a fraction, the numerator of which is the total amount paid by the taxpayer in the area affected by Pierce’s disease and its vectors during the taxable year for compensation, and the denominator of which is the total compensation paid by the taxpayer in this state during the taxable year. (ii) If a loss carryover is allowable pursuant to this section for any taxable year after Pierce’s disease and its vectors have occurred, the area affected by Pierce’s disease and its vectors shall be deemed to remain in existence for purposes of computing the limitation set forth in subparagraph (B) and allowing a net operating loss deduction. (b) A taxpayer who qualifies as a “qualified taxpayer” under one or more sections shall, for the taxable year of the net operating loss and any taxable year to which that net operating loss may be carr

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