BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1257|
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UNFINISHED BUSINESS
Bill No: SB 1257
Author: Hernandez (D), et al.
Amended: 6/11/12
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 8-0, 5/2/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe,
La Malfa, Liu
NO VOTE RECORDED: Hancock
SENATE FLOOR : 38-0, 5/7/12
AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon,
Cannella, Corbett, Correa, De León, DeSaulnier, Dutton,
Emmerson, Evans, Fuller, Gaines, Hancock, Harman,
Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio,
Simitian, Steinberg, Vargas, Walters, Wolk, Wright,
Wyland, Yee
NO VOTE RECORDED: Runner, Strickland
ASSEMBLY FLOOR : 79-0, 8/9/12 - See last page for vote
SUBJECT : Utility user tax: exemption: public transit
vehicles
SOURCE : Foothill Transit
DIGEST : This bill prohibits a local government from
levying a utility user tax on the consumption of
electricity as a motor vehicle fuel for an electric public
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transit bus.
Assembly Amendments make technical changes and add
coauthors.
ANALYSIS : The constitutional municipal affairs doctrine
allows charter cities to levy taxes which are not preempted
by the state or federal governments. In 2009, 65 charter
cities levied a utility user tax (UUT) on the consumption
of utility services, like electricity, gas, water, sewer,
and telephone services.
A general law city can impose only those taxes that are
allowed by state statutes. However, the Government Code
allows all general law cities to levy any tax which may be
levied by any charter city unless a different general law
limits or prohibits such a tax. In 2009, 84 general law
cities levied a UUT.
Counties can levy only those taxes that are allowed by
state statutes. A county board of supervisors can levy a
UUT on the consumption of electricity, gas, water, sewer,
telephone, telegraph, and cable television services in the
unincorporated area of the county. In 2009, Alameda, Los
Angeles, and Sacramento counties were the only counties to
levy a UUT using this statute.
The Mills-Hayes Act prohibits a tax imposed upon fuel used
by any transit district, transit authority, or city owning
and operating a local transit system.
State law provides that the consumption of compressed
natural gas dispensed by a gas compressor, within a local
jurisdiction, that is separately metered and provides
compressed natural gas as a motor vehicle fuel for use by a
local agency or public transit operator is not to be
construed as the consumption of gas for the purposes of a
county-imposed UUT (AB 2009, Hernandez, Chapter 221,
Statutes of 2008).
This bill exempts from any utility user tax imposed by any
local jurisdiction:
A local agency or public transit operator's consumption
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of compressed natural gas dispensed by a gas compressor,
within a local jurisdiction, that is separately metered
and is dedicated to providing compressed natural gas as a
motor vehicle fuel for use by the local agency or public
transit operator.
A local agency or public transit operator's consumption
of electricity used to charge electric bus propulsion
batteries, within a local jurisdiction, that is
separately metered and is dedicated to providing
electricity as a motor vehicle fuel for use by an
electric public transit bus.
This bill defines "local jurisdiction" as any city, county,
city and county, including any chartered city, county, or
city and county, district, or public or municipal
corporation.
The bill defines "public transit operator" as a local or
regional transit agency or a joint powers agency operating
bus transportation service as described pursuant to a
specified statute.
Comments
According to the Senate Governance and Finance Committee
analysis, for more than four decades, state law has
provided local transit operators with relief from the
payment of fuel taxes. To provide vital public
transportation services to California residents while
meeting air quality objectives and reducing greenhouse gas
emissions, many public transit operators are considering
using vehicles that rely on electricity as their primary
fuel. Because state law allows cities and counties to tax
the consumption of electricity as a utility service,
transit operators may have to pay taxes on the "fuel" they
put into rechargeable battery-powered electric buses. By
ensuring that electric buses qualify for the same fuel tax
relief that state law applies to buses powered by fossil
fuels, this bill will help transit agencies to deploy the
next generation of clean public transit vehicles.
The 2008 Hernandez bill amended the UUT exemption for
transit agencies' compressed natural gas consumption into a
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statute that specifically authorizes a county to levy a UUT
in its unincorporated area. As a result, it exempted the
consumption of compressed natural gas for transit vehicles
from only county-imposed UUTs. To clarify that the
compressed natural gas exemption for transit applies to
UUTs imposed by cities as well as counties, this bill
removes the UUT exemption language for compressed natural
gas from Revenue & Taxation Code Section 7284.2 and places
it into a new statute along with the new UUT exemption for
transit agencies' electricity consumption.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/9/12)
Foothill Transit (source)
ASSEMBLY FLOOR : 79-0, 8/9/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Roger Hernández
AGB:nl 8/10/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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