(a) No suit or proceeding shall be maintained in any court for the recovery of any amount of contributions, interest or penalties alleged to have been erroneously or illegally assessed or collected unless a claim for refund or credit has been filed pursuant to this chapter. Within 90 days after the service of the notice of the decision of the appeals board upon an appeal, the claimant may bring an action against the director on the grounds set forth in the claim in a court of competent jurisdiction in the County of Sacramento for the recovery of the whole or any part of the amount with respect to which the claim has been denied. The director may, in writing, extend for a period of not exceeding two years the time within which such action may be instituted if written request for such extension is filed with the director within the 90-day period. Failure to bring action within the time specified constitutes a waiver of any demand against the state on account of alleged overpayments. If the appeals board fails to serve notice of its decision on the appeal within 90 days after an appeal is filed, the claimant may consider the claim denied and may bring an action against the director under this section.

(b) To the extent permitted by federal law, any entity or organization which has made a bona fide claim that it is a church or convention or association of churches, or an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches, may bring suit to challenge a decision of the appeals board denying an exemption as a church or religious organization by paying the amount of the last quarter assessed immediately preceding the initial appeals board decision denying the exemption and then making a claim for refund or credit pursuant to this section.

An entity or organization shall be deemed to have made a bona fide claim that it is a church or religious entity for purposes of this section if either of the following is established:

(1) That it has been recognized as a church or religious organization by any entity of state or federal government.

(2) That the appeals board found that the department has failed to show by a preponderance of the evidence admitted at the proceedings to determine tax liability that the petitioner has not made a bona fide claim of coverage under subdivision (a) as a church or religious entity.

(c) A petition for writ of mandate shall lie to challenge any decision denying eligibility under subdivision (b), and shall not be deemed an action proscribed by or within the meaning of Section 32 of Article XIII of the California Constitution or Section 1851. The time within which to file any claim or action under subdivision (a) shall be extended during the pendency of any action brought pursuant to this subdivision.

(Amended by Stats. 1982, Ch. 984, Sec. 2.)