Amended in Senate April 11, 2013

Senate Bill No. 221

Introduced by Senator begin delete Rubio end delete begin insert Pavley end insert

February 11, 2013

begin delete An act to amend Section 4799.09 of the Public Resources Code, relating to forestry. end delete begin insert An act to end insert begin insert add and repeal Sections 6011.3, 6012.4, and 10759.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 221, as amended, begin delete Rubio end delete   begin insert Pavley end insert . begin delete Forestry: urban forests. end delete begin insert Sales and use taxes: vehicle license fee: exclusion: alternative fuel motor vehicles. end insert

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Existing laws impose state sales and use taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, measured by the sales price. The Sales and Use Tax Law defines the terms “gross receipts” and “sales price.”

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This bill would, on and after January 1, 2014, and before January 1, 2022, in the sale of a new alternative fuel motor vehicle, exclude from the terms “gross receipts” and “sales price,” any amount allowed as a credit under a specified provision of the Internal Revenue Code, relating to new qualified plug-in electric drive motor vehicles, and any amounts received, awarded, or allowed pursuant to a state incentive program for the purchase or lease of an alternative fuel vehicle.

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The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Exemptions from state sales and use taxes are incorporated into these laws.

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This bill would specify that this exclusion does not apply to local sales and use taxes and transactions and use taxes.

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The Vehicle License Fee Law provides that the annual amount of the license fee for any vehicle is 0.65% of the market value of the vehicle, as specified. That law provides for the determination of the market value of any vehicle, for reclassification to increase the market value of a vehicle, and for the exemption of certain vehicles from the imposition of the license fee.

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This bill would, on and after January 1, 2014, and before January 1, 2022, for purposes of determining the vehicle license fee, exempt from the determination of market value of a new motor vehicle propelled by alternative fuels any amount allowed as a credit under a specified provision of the Internal Revenue Code, relating to new qualified plug-in electric drive motor vehicles, and any amounts received, awarded, or allowed pursuant to a state incentive program for the purchase or lease of an alternative fuel vehicle.

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This bill would take effect immediately as a tax levy.

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Existing law, the California Urban Forestry Act of 1978, authorizes the Department of Forestry and Fire Protection to implement a program in urban forestry to, among other things, encourage better management and planting of trees in urban areas and assist cities in innovative solutions to problems, including greenhouse gas emissions, urban heat island effect, stormwater management, lack of green space, and vandalism. The Director of Forestry and Fire Protection, with advice from other appropriate state agencies and interested parties, is authorized to make grants to provide assistance of 25% to 90%, inclusive of costs for projects meeting guidelines established by the State Board of Forestry and Fire Protection, upon recommendation by the director. The director is authorized to waive the cost-sharing requirement for projects that are in disadvantaged and severely disadvantaged communities. The act defines “disadvantaged community” for its purposes as a community with a median household income less than 80% of the statewide average.

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This bill would instead define disadvantaged community as a community that is disproportionately impacted by pollution and adverse socioeconomic impacts.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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The Legislature finds and declares:

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(a) There is a wide disparity in fees levied on owners of light-,
medium-, and heavy-duty vehicles operated on alternative fuels
when compared to those same taxes and fees levied on owners of
comparable gasoline and diesel fuel vehicles.

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(b) In some cases, the fees on alternative fuel vehicles are more
than twice as much as those for conventional fuel vehicles.

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(c) The disparity in fees exists even though the alternative fuel
vehicle may look identical to the conventional fuel vehicle and
provide the same or lesser utility to the individual owner.

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(d) The existing California vehicle license fee on motor vehicles
that operate on alternative fuels is higher than for comparable
conventional fuel vehicles because alternative fuel vehicles
generally have higher sales prices. The higher sales prices are
largely due to the fact that these vehicles are produced in extremely
low volumes (many assembled by hand), such that their production
has not achieved the economies of scale that would significantly
reduce their cost; and they use many new advanced materials and
technologies that also have not yet achieved economies of scale,
and therefore have a temporarily greater cost to consumers.

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(e) The higher sales prices for these alternative fuel vehicles
are expected to be a short-term, temporary situation because prices
are expected to decline significantly to competitive levels as volume
increases. If this does not occur, these vehicles may never be
competitive, and automakers would likely withdraw them from the
market. The current vehicle license fee does not reflect these
temporary, short-term pricing situations. Instead it intrinsically,
but incorrectly, assumes that these short-term higher prices reflect
true long-term market value of the vehicles.

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(f) Alternative fuel vehicles provide benefits to California
citizens that are external to, or not reflected in, their cost to the
purchaser. These benefits include: increasing our national
independence from foreign energy sources; providing more
transportation choices for consumers and businesses, thus reducing
our economic vulnerability to sudden fuel price increases caused
by external or internal events; reducing air pollutants, climate
change pollutants, and toxic emissions from mobile sources; and
reducing future pressures for additional environmental controls
on existing and new businesses and industries in California.

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(g) It is the public policy of the State of California, the federal
government, and many local governments to encourage the
development and use of alternative fuel vehicles for the purpose
of providing the benefits described above to all California citizens.

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(h) Existing vehicle license fee calculations, as they relate to
the determination of market value of alternative fuel vehicles, do
not reflect the critical short-term pricing issues described above,
nor the external benefits that accrue to all California citizens.
Additionally, these existing fees act as a significant disincentive
to potential purchasers of alternative fuel vehicles and, as such,
are contrary to existing public policies at all levels of government.

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(i) It is the intent of the Legislature to equalize the vehicle
license fee between alternative fuel vehicles and conventional fuel
vehicles for a period of eight years, beginning January 1, 2014,
and ending December 31, 2021.

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begin insert SEC. 2. end insert   

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begin insert Section 6011.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 6011.3. end insert   

(a) Notwithstanding Section 6011 or any other law,
on and after January 1, 2014, and before January 1, 2022, “sales
price” from the purchase of a new alternative fuel motor vehicle
shall not include any amount allowed as a credit under Section
30D of the Internal Revenue Code, relating to new qualified plug-in
electric drive motor vehicles, and any amounts received, awarded,
or allowed pursuant to a state incentive program for the purchase
or lease of an alternative fuel vehicle, as may be determined by
the board, including, but not limited to, the Clean Vehicle Rebate
Project, the California Hybrid and Zero-Emission Truck and Bus
Voucher Incentive Project, and the On-Road Heavy-Duty Voucher
Incentive Program under the Carl Moyer Program.

(b) For purposes of this section:

(1) “Alternative fuel vehicle” means a motor vehicle subject to
registration under the Vehicle Code that operates some or all of
the time on a fuel other than gasoline or diesel fuel.

(2) “Diesel fuel” means diesel fuel as defined by Section 60022.

(3) “Gasoline” means gasoline as defined by Section 7316.

(4) “Motor vehicle” means a motor vehicle as defined by Section
415 of the Vehicle Code.

(c) The estimated cost of the vehicle after deducting the federal
and state incentive amounts described in subdivision (a) shall be
stated in the contract for sale or lease with the purchaser and shall
be reported to the board quarterly.

(d) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6
(commencing with Section 7251)), the exclusion established by
this section shall not apply with respect to any tax levied by a
county, city, or district pursuant to, or in accordance with, either
of those laws.

(e) This section is repealed on January 1, 2022.

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begin insert SEC. 3. end insert   

end insert

begin insert Section 6012.4 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 6012.4. end insert   

(a) Notwithstanding Section 6012 or any other law,
on and after January 1, 2014, and before January 1, 2022, “gross
receipts” from the sale of a new alternative fuel motor vehicle
shall not include any amount allowed as a credit under Section
30D of the Internal Revenue Code, relating to new qualified plug-in
electric drive motor vehicles, and any amounts received, awarded,
or allowed pursuant to a state incentive program for the purchase
or lease of an alternative fuel vehicle, as may be determined by
the board, including, but not limited to, the Clean Vehicle Rebate
Project, the California Hybrid and Zero-Emission Truck and Bus
Voucher Incentive Project, and the On-Road Heavy-Duty Voucher
Incentive Program under the Carl Moyer Program.

(b) For purposes of this section:

(1) “Alternative fuel vehicle” means a motor vehicle subject to
registration under the Vehicle Code that operates some or all of
the time on a fuel other than gasoline or diesel fuel.

(2) “Diesel fuel” means diesel fuel as defined by Section 60022.

(3) “Gasoline” means gasoline as defined by Section 7316.

(4) “Motor vehicle” means a motor vehicle as defined by Section
415 of the Vehicle Code.

(c) The estimated cost of the vehicle after deducting the federal
and state incentive amounts described in subdivision (a) shall be
stated in the contract for sale or lease with the purchaser and shall
be reported to the board quarterly.

(d) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6
(commencing with Section 7251)), the exclusion established by
this section shall not apply with respect to any tax levied by a
county, city, or district pursuant to, or in accordance with, either
of those laws.

(e) This section is repealed on January 1, 2022.

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begin insert SEC. 4. end insert   

end insert

begin insert Section 10759.5 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 10759.5. end insert   

(a) On and after January 1, 2014, and before January
1, 2022, for purposes of determining the vehicle license fee imposed
by this part, there is excluded from the determination of market
value of a new motor vehicle propelled by alternative fuels any
amount allowed as a credit under Section 30D of the Internal
Revenue Code, relating to new qualified plug-in electric drive
motor vehicles, and any amounts received, awarded, or allowed
pursuant to a state incentive program for the purchase or lease of
an alternative fuel vehicle, as may be determined by the State
Board of Equalization, including, but not limited to, the Clean
Vehicle Rebate Project, the California Hybrid and Zero-Emission
Truck and Bus Voucher Incentive Project, and the On-Road
Heavy-Duty Voucher Incentive Program under the Carl Moyer
Program. This exemption shall apply to the subsequent payments
of the vehicle license fee.

(b) For purposes of this section:

(1) “Motor vehicle propelled by alternative fuels” means a
motor vehicle that operates some or all of the time on a fuel other
than gasoline or diesel fuel.

(2) “Diesel fuel” means diesel fuel as defined by Section 60022.

(3) “Gasoline” means gasoline as defined by Section 7316.

(c) The board shall provide to the Department of Motor Vehicles
any determinations of state incentive programs for the purchase
or lease of an alternative fuel vehicle made by the board, in a time
and manner prescribed by the board, for purposes of implementing
this section.

(d) This section is repealed on January 1, 2022.

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begin insert SEC. 5. end insert   

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This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

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SECTION 1.  

Section 4799.09 of the Public Resources Code
is amended to read:

4799.09.  

As used in this chapter the following terms have the
following meanings:

(a) “Disadvantaged community” means a community that is
disproportionately impacted by pollution and adverse
socioeconomic impacts.

(b) “Severely disadvantaged community” means a community
with a median household income less than 60 percent of the
statewide average.

(c) “Urban forestry” means the cultivation and management of
native or introduced trees and related vegetation in urban areas for
their present and potential contribution to the economic,
physiological, sociological, and ecological well-being of urban
society.

(d) “Urban forest” means those native or introduced trees and
related vegetation in the urban and near-urban areas, including,
but not limited to, urban watersheds, soils and related habitats,
street trees, park trees, residential trees, natural riparian habitats,
and trees on other private and public properties.

(e) “Urban area” means an urban place, as that term is defined
by the United States Department of Commerce, of 2,500 or more
persons.

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