Senate Bill No. 788

Introduced by Committee on Transportation and Housing (Senators DeSaulnier (Chair), Beall, Cannella, Gaines, Galgiani, Hill, Lara, Liu, Pavley, Roth, and Wyland)

February 22, 2013

An act to amend Section 6480.1 of the Revenue and Taxation Code, and to amend Section 14606 of the Vehicle Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SB 788, as introduced, Committee on Transportation and Housing. Transportation.

(1) Existing law requires that on July 1 of each succeeding year, the prepayment rate per gallon for aircraft jet fuel, rounded to the nearest $0.005, be established by the State Board of Equalization based upon 80% of the combined state and local sales tax rate and the California Constitution, as specified, on the arithmetic average selling price, excluding sales and state excise taxes, as determined by the board. Existing law requires the board to make its determination of the rate no later than March 1 of the year prior to the effective date of the new rate. Existing law requires the rate of the prepayment required to be collected for aircraft jet fuel be equal to 80% of the arithmetic average selling price of aircraft jet fuel as specified by industry publications. Existing law requires that immediately upon making its determination and setting of the rate, the board must each year, no later than May 1, notify every supplier, wholesaler, and retailer of aircraft jet fuel. Existing law permits the board to readjust the rate in the event the price of aircraft jet fuel decreases or increases, and the established rate results in prepayments that consistently exceed or are significantly lower than the retailers’ sales tax liability.

This bill would revise the provision that requires the board to make its determination of the rate no later than March 1 of the year prior to the effective date of the new rate, and instead would require this determination to be made no later than March 1 of the same year as the effective date of the new rate.

(2) Existing law prohibits a person from employing, hiring, knowingly permitting, or authorizing any person to drive a motor vehicle owned by him or her or under his or her control upon the highways unless that person is licensed for the appropriate class of vehicle to be driven. Existing law requires that whenever a person fails to qualify, on reexamination, to operate a commercial motor vehicle, an employer shall report that failure to the Department of Motor Vehicles within 10 days. Existing law requires that, until January 30, 2014, if a driver has no medical certification status information in the Commercial Driver License Information System motor vehicle record obtained from the driver’s state licensing agency, the employing motor carrier may accept as proof of medical certification a medical examiner’s certificate issued to that driver prior to January 30, 2012. Existing law, operative January 1, 2014, requires an employer to obtain from a driver required to have a commercial driver’s license or commercial endorsement a copy of the driver’s medical certification before allowing the driver to operate a commercial motor vehicle. Existing law requires the employer to retain the certification as part of a driver qualification file.

This bill would change the provision with an operative date of January 1, 2014, to January 30, 2014.

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

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

SECTION 1.  

Section 6480.1 of the Revenue and Taxation
Code is amended to read:

6480.1.  

(a) At any time that motor vehicle fuel tax or diesel
fuel tax is imposed or would be imposed, but for the dyed diesel
fuel exemption in paragraph (1) of subdivision (a) of Section
60100, or the train operator exemption in paragraph (7) of
subdivision (a) of Section 60100 or paragraph (11) of subdivision
(a) of Section 7401, or, pursuant to subdivision (f) of Section 6480,
would be deemed to be imposed, on any removal, entry, or sale in
this state of motor vehicle fuel, aircraft jet fuel, or diesel fuel, the
supplier shall collect prepayment of retail sales tax from the person
to whom the motor vehicle fuel, aircraft jet fuel, or diesel fuel is
sold. However, if no sale occurs at the time of imposition of motor
vehicle fuel tax or diesel fuel tax, the supplier shall prepay the
retail sales tax on that motor vehicle fuel, aircraft jet fuel, or diesel
fuel. The prepayment required to be collected by the supplier
constitutes a debt owed by the supplier to this state until paid to
the board, until satisfactory proof has been submitted to prove that
the retailer of the fuel has paid the retail sales tax to the board, or
until a supplier or wholesaler who has consumed the fuel has paid
the use tax to the board. Each supplier shall report and pay the
prepayment amounts to the board, in a form as prescribed by the
board, in the period in which the fuel is sold. On each subsequent
sale of that fuel, each seller, other than the retailer, shall collect
from his or her purchaser a prepayment computed using the rate
applicable at the time of sale. Each supplier shall provide his or
her purchaser with an invoice for, or other evidence of, the
collection of the prepayment amounts which shall be separately
stated thereon.

(b) (1) A wholesaler shall collect prepayment of the retail sales
tax from the person to whom the motor vehicle fuel, aircraft jet
fuel, or diesel fuel is sold. Each wholesaler shall provide his or
her purchaser with an invoice for or other evidence of the collection
of the prepayment amounts, which shall be separately stated
thereon.

(2) Each wholesaler shall report to the board, in a form as
prescribed by the board and for the period in which the motor
vehicle fuel, aircraft jet fuel, or diesel fuel was sold, all of the
following:

(A) The number of gallons of fuel sold and the amount of sales
tax prepayments collected by the wholesaler.

(B) The number of tax-paid gallons purchased and the amount
of sales tax prepayments made by the wholesaler.

(C) In the event that the amount of sales tax prepayments
collected by the wholesaler is greater than the amount of sales tax
prepayments made by the wholesaler, then the excess constitutes
a debt owed by the wholesaler to the state until paid to the board,
or until satisfactory proof has been submitted that the retailer of
the fuel has paid the tax to the board.

(c) A supplier or wholesaler who pays the prepayment and issues
a resale certificate to the seller, but subsequently consumes the
motor vehicle fuel, aircraft jet fuel, or diesel fuel, shall be entitled
to a credit against his or her sales and use taxes due and payable
for the period in which the prepayment was made, provided that
he or she reports and pays the use tax to the board on the
consumption of that fuel.

(d) The amount of a prepayment paid by the retailer or a supplier
or wholesaler who has consumed the motor vehicle fuel, aircraft
jet fuel, or diesel fuel to the seller from whom he or she acquired
the fuel shall constitute a credit against his or her sales and use
taxes due and payable for the period in which the sale was made.
Failure of the supplier or wholesaler to report prepayments or the
supplier’s or wholesaler’s failure to comply with any other duty
under this article shall not constitute grounds for denial of the
credit to the retailer, supplier, or wholesaler, either on a temporary
or permanent basis or otherwise. To be entitled to the credit, the
retailer, supplier, or wholesaler shall retain for inspection by the
board any receipts, invoices, or other documents showing the
amount of sales tax prepaid to his or her supplier, together with
the evidence of payment.

(e) The rate of the prepayment required to be collected during
the period from July 1, 1986, through March 31, 1987, shall be
four cents ($0.04) per gallon of motor vehicle fuel distributed or
transferred.

(f) The rate of prepayment required to be collected for motor
vehicle fuel, aircraft jet fuel, and diesel fuel as established by the
board in effect on January 1, 2013, shall remain in effect through
June 30, 2013.

(g) On July 1 of each succeeding year, the prepayment rate per
gallon for motor vehicle fuel, rounded to the nearest one-half of
one cent ($0.005), of the required prepayment shall be established
by the board based upon 80 percent of the combined state and local
sales tax rate established by Sections 6051, 6051.2, 6051.3, 6051.5,
7202, and 7203.1, and Section 35 of Article XIII of the California
Constitution on the arithmetic average selling price (excluding
sales tax) as reported by an industry publication of all grades of
gasoline sold through a self-service gasoline station. The board
shall make its determination of the rate no later than March 1 of
the same year as the effective date of the new rate. Immediately
upon making its determination and setting of the rate, the board
shall each year, no later than May 1, notify every supplier,
wholesaler, and retailer of motor vehicle fuel. In the event the price
of fuel decreases or increases or an exemption from sales tax for
sales of fuel is enacted, and the established rate results in or could
result in prepayments which consistently exceed or are significantly
lower than the retailers’ sales tax liability, the board may readjust
the rate.

(h) On July 1 of each succeeding year, the prepayment rate per
gallon for aircraft jet fuel, rounded to the nearest one-half of one
cent ($0.005), shall be established by the board based upon 80
percent of the combined state and local sales tax rate established
by Sections 6051, 6051.2, 6051.3, 6051.5, 7202, and 7203.1, and
Section 35 of Article XIII of the California Constitution on the
arithmetic average selling price (excluding sales and state excise
taxes) as determined by the board. The board shall make its
determination of the rate no later than March 1 of the begin insert same end insert year
begin delete prior to end delete begin insert as end insert the effective date of the new rate. The rate of the
prepayment required to be collected for aircraft jet fuel shall be
equal to 80 percent of the arithmetic average selling price of aircraft
jet fuel as specified by industry publications. Immediately upon
making its determination and setting of the rate, the board shall
each year, no later than May 1, notify every supplier, wholesaler,
and retailer of aircraft jet fuel. In the event the price of aircraft jet
fuel decreases or increases, and the established rate results in
prepayments that consistently exceed or are significantly lower
than the retailers’ sales tax liability, the board may readjust the
rate.

(i) On July 1 of each succeeding year, the prepayment rate per
gallon for diesel fuel, rounded to the nearest one-half of one cent
($0.005), shall be established by the board based upon 80 percent
of the combined state and local sales tax rate established by
Sections 6051, 6051.2, 6051.3, 6051.5, 6051.8, 7202, and 7203.1,
and Section 35 of Article XIII of the California Constitution on
the arithmetic average selling price (excluding sales and state
excise taxes) as determined by the board. The board shall make
its determination of the rate no later than March 1 of the same year
as the effective date of the new rate. The rate of the prepayment
required to be collected for diesel fuel shall be equal to 80 percent
of the arithmetic average selling price of diesel fuel as specified
by industry publications. Immediately upon making its
determination and setting of the rate, the board shall each year, no
later than May 1, notify every supplier, wholesaler, and retailer of
diesel fuel. In the event the rate of sales tax imposed on sales of
diesel fuel increases or decreases or the price of diesel fuel
decreases or increases, and the established rate results in or could
result in prepayments that consistently exceed or are significantly
lower than the retailers’ sales tax liability, the board may readjust
the rate.

(j) (1) Notwithstanding any other provision of this section,
motor vehicle fuel sold by a supplier or wholesaler to a qualified
purchaser who, pursuant to a contract with the State of California
or its instrumentalities, resells that fuel to the State of California
or its instrumentalities shall be exempt from the prepayment
requirements.

(2) A qualified purchaser who acquires motor vehicle fuel for
subsequent resale to the State of California or its instrumentalities
pursuant to this subdivision shall furnish to the supplier or
wholesaler from whom the fuel is acquired an exemption
certificate, completed in accordance with any instructions or
regulations as the board may prescribe. The supplier or wholesaler
shall retain the certificate in his or her records in support of the
exemption. To qualify for the prepayment exemption, both of the
following conditions shall apply:

(A) The qualified purchaser does not take possession of the fuel
at any time.

(B) The fuel is delivered into storage tanks owned or leased by
the State of California or its instrumentalities via facilities of the
supplier or wholesaler, or by common or contract carriers under
contract with the supplier or wholesaler.

(3) For purposes of this subdivision, “qualified purchaser” means
a wholesaler who does not have or maintain a storage facility or
facilities for the purpose of selling motor vehicle fuel.

SEC. 2.  

Section 14606 of the Vehicle Code, as added by
Section 7 of Chapter 670 of the Statutes of 2012, is amended to
read:

14606.  

(a) A person shall not employ, hire, knowingly permit,
or authorize any person to drive a motor vehicle owned by him or
her or under his or her control upon the highways unless that person
is licensed for the appropriate class of vehicle to be driven.

(b) Whenever a person fails to qualify, on reexamination, to
operate a commercial motor vehicle, an employer shall report that
failure to the department within 10 days.

(c) An employer shall obtain from a driver required to have a
commercial driver’s license or commercial endorsement a copy
of the driver’s medical certification before allowing the driver to
operate a commercial motor vehicle. The employer shall retain the
certification as part of a driver qualification file.

(d) This section shall become operative on January begin delete 1, end delete begin insert 30, end insert 2014.