Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1851


Introduced by Assembly Members Gray and Ting

February 10, 2016


An act to amend Sectionbegin delete 44274 ofend deletebegin insert 44258.4 of, and to add Chapter 8.1 (commencing with Section 44257.1)end insertbegin insert and Chapter 8.8 (commencing with Section 44269) to Part 5 of Division 26 of,end insert the Health and Safety Code,begin insert to amend Sections 6011 and 6012 of the Revenue and Taxation Code, and to amend Section 5205.5 of the Vehicle Code,end insert relating to vehicular air pollution.

LEGISLATIVE COUNSEL’S DIGEST

AB 1851, as amended, Gray. begin deleteAir Quality Improvement Program. end deletebegin insertVehicular air pollution: reduction incentives.end insert

begin insert

(1) Existing law establishes the Air Quality Improvement Program that is administered by the State Air Resources Board for the purposes of funding projects related to, among other things, reduction of criteria air pollutants and improvement of air quality. Pursuant to the Air Quality Improvement Program, the state board has established the Clean Vehicle Rebate Project to promote the production and use of zero-emission vehicles and the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project to provide vouchers to help California fleets to purchase hybrid and zero-emission trucks and buses.

end insert
begin insert

The Charge Ahead California Initiative, administered by the state board, includes goals of, among other things, placing in service at least 1,000,000 zero-emission and near-zero-emission vehicles by January 1, 2023, and increasing access for disadvantaged, low-income, and moderate-income communities and consumers to zero-emission and near-zero-emission vehicles.

end insert
begin insert

The California Global Warming Solutions Act of 2006 establishes the state board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board from a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature.

end insert
begin insert

This bill, as part of the Clean Vehicle Rebate Project, would require the state board to provide specified rebate amounts for battery electric vehicles, fuel-cell vehicles, and plug-in hybrid electric vehicles; to limit rebates to vehicles with a manufacturer’s suggested retail price of $60,000 or less; and to implement a process to allow eligible applicants to obtain prompt preapproval from the state board prior to purchasing an eligible vehicle, as specified. The bill would authorize moneys from the Greenhouse Gas Reduction Fund to be available, upon appropriation, for allocation under those provisions and would authorize moneys available for allocation to disadvantaged communities to be available, upon appropriation, for specified allocations.

end insert
begin insert

This bill also would require the state board to issue specified rebates for the installation of an electric vehicle charging station to a property owner or lessee, as specified. The bill would authorize moneys from the Greenhouse Gas Reduction Fund to be available, upon appropriation, for allocation for those rebates.

end insert
begin insert

(2) Existing sales and use tax laws impose taxes on retailers measured by 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 sales price. The Sales and Use Tax Law defines the terms “gross receipts” and “sales price.”

end insert
begin insert

This bill would exclude from the terms “gross receipts” and “sales price” for these purposes the value of a motor vehicle traded in for a qualified motor vehicle, as defined, if the value of the trade-in motor vehicle is separately stated on the motor vehicle invoice or bill of sale or similar document provided by the purchaser. The bill would authorize moneys from the Greenhouse Gas Reduction Fund to be available, upon appropriation, for allocation to reimburse counties and cities for any revenue losses caused by those sales and use tax exemptions.

end insert
begin insert

(3) Existing federal law, until September 30, 2017, authorizes a state to allow specified labeled vehicles to use lanes designated for high-occupancy vehicles (HOVs). Existing law authorizes the Department of Transportation to designate certain lanes for the exclusive use of HOVs. Under existing law, until January 1, 2019, until federal authorization expires, or until the Secretary of State receives a specified notice, those lanes may be used by certain vehicles not carrying the requisite number of passengers otherwise required for the use of an HOV lane if the vehicle displays a valid identifier issued by the Department of Motor Vehicles (DMV). Existing law authorizes the DMV to issue no more than 85,000 of those identifiers.

end insert
begin insert

This bill would no longer limit the amount of identifiers issued by the DMV.

end insert
begin delete

Existing law establishes the Air Quality Improvement Program that is administered by the State Air Resources Board for the purposes of funding projects related to, among other things, reduction of criteria air pollutants and improvement of air quality. Existing law requires, until January 1, 2024, that a portion of the registration fees for motor vehicles and vessels be deposited into the Air Quality Improvement Fund and, upon appropriation, be expended for the implementation of the program.

end delete
begin delete

This bill would make technical, nonsubstantive changes to those provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

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

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertThe Legislature finds and declares all of the
2following:end insert

begin insert

3(a) California is at the forefront of battling climate change, and
4a main pillar of the state’s climate strategy is reducing greenhouse
5gas emissions to 1990 levels.

end insert
begin insert

6(b) To help achieve this greenhouse gas emissions goal, the
7State Air Resources Board has required large vehicle
8manufacturers to produce a certain amount of zero-emission
9vehicles as a percentage of the overall number of vehicles the
10manufacturer makes for sale in the state. The present mandate is
1115.4 percent of new vehicles delivered for sale by 2025.

end insert
begin insert

P4    1(c) To reinforce this mandate, Governor Jerry Brown issued
2Executive Order B-16-2012, which set a long-term target of
31,500,000 zero-emission vehicles on the road by 2025, with the
4hope and expectation that the market for these vehicles will become
5mainstream and self-sustaining for individuals, businesses, and
6public fleets.

end insert
begin insert

7(d) The widespread adoption and purchase of zero-emission
8vehicles can help the environment and further the state’s goals by
9mitigating emissions and easing air pollution.

end insert
begin insert

10(e) To be effective in cutting emissions and cleaning up air
11pollution, zero-emission and partial-zero-emission vehicles must
12attract consumers who would otherwise choose a traditional
13gasoline-fueled car.

end insert
begin insert

14(f) The current market for zero-emission vehicles has excessive
15barriers, including the high relative purchase price associated
16with zero-emission vehicles, limited range capability, inadequate
17charging infrastructure, resale value, length of commute, and
18existing low gas prices.

end insert
begin insert

19(g) In 2015, California’s new car dealers sold over 2,000,000
20new vehicles with a combined 3.1 percent of those sales comprising
21zero-emission vehicles and partial-zero-emission vehicles. That
22represents a drop in market share for these vehicles, which was
233.2 percent in 2014.

end insert
begin insert

24(h) Using last year’s 2,000,000 new vehicle sales as an estimate
25of 2025 vehicle sales by covered manufacturers, the 15.4 percent
26mandate by the State Air Resources Board would require 308,000
27zero-emission vehicles and partial-zero-emission vehicles be
28delivered for sale in the state that year. If the current 41.5 percent
29of new vehicle sales will continue to be made up of sport utility
30vehicles, pickups, and vans, over 25 percent of the remaining
311,201,000 passenger vehicles delivered for sale just nine years
32from now must be electric or plug-in electric vehicles.

end insert
begin insert

33(i) California has long focused on increasing disadvantaged
34communities’ access to environmentally-friendly technologies and
35green transportation options to benefit the health of residents and
36to enhance air quality.

end insert
begin insert

37(j)  Compared to gasoline-fueled vehicles, alternative-fueled
38vehicles reduce the country’s dependence on foreign oil and
39substantially lower consumers’ fuel costs.

end insert
begin insert

P5    1(k) Automakers and new car dealers face numerous inherent
2market challenges when introducing and retailing the
3alternative-fueled vehicles required by the State Air Resources
4Board’s vehicle mandates, including complex incentives, uncertain
5policy support, purchase price disparity, lengthy sales transactions,
6low gasoline prices, poor after-sale electric vehicle infrastructure,
7and sophisticated, constantly-changing technology.

end insert
begin insert

8(l) Incentives, such as rebates, tax credits, and high occupancy
9vehicle lane access for zero- and partial-emission vehicles, are
10crucial for continuing consumer interest in these vehicles, but
11greater investments are needed to significantly affect consumer
12buying behavior and the overall alternative-fueled vehicle
13marketplace, especially when it comes to economically
14disadvantaged communities.

end insert
begin insert

15(m) Increased incentives have been deployed with great success
16in other countries and have resulted in a large-scale consumer
17migration from traditional gas-fueled vehicles to cleaner modes
18of transportation.

end insert
begin insert

19(n) Accordingly, it is the intent of the Legislature in enacting
20this act to provide more realistic incentives that will move customer
21demand of zero-emission vehicles and achieve the adoption of
22alternative-fueled vehicles to meet the state’s greenhouse gas
23emissions goals.

end insert
24begin insert

begin insertSEC. 2.end insert  

end insert

begin insertChapter 8.1 (commencing with Section 44257.1) is
25added to Part 5 of Division 26 of the end insert
begin insertHealth and Safety Codeend insertbegin insert, to
26read:end insert

begin insert

27 

28Chapter  begin insert8.1.end insert Zero-Emission Vehicle Incentives
29

 

30

begin insert44257.1.end insert  

For purposes of this chapter, the following terms
31have the following meanings:

32(a) “Battery electric vehicle” means a vehicle that meets the
33state’s super ultra-low emission vehicle standard for exhaust
34emissions and the federal inherently low-emission vehicle
35evaporative emission standard, as defined in Part 88 (commencing
36with Section 88.101-94) of Title 40 of the Code of Federal
37Regulations, as that part read on January 1, 2016, and is powered
38entirely by an electric motor drawing current from rechargeable
39storage batteries.

P6    1(b) “Clean Vehicle Rebate Project” has the same meaning as
2established pursuant to Section 44274.

3(c) “Disadvantaged community” means a community identified
4pursuant to Section 39711.

5(d) “Fuel-cell vehicle” means a vehicle that meets the state’s
6super ultra-low emission vehicle standard for exhaust emissions
7and the federal inherently low-emission vehicle evaporative
8emission standard, as defined in Part 88 (commencing with Section
988.101-94) of Title 40 of the Code of Federal Regulations, as that
10part read on January 1, 2016, and is powered by an electric motor
11drawing current from compressed hydrogen into a fuel cell.

12(e) “New motor vehicle dealer” has the same meaning as in
13Section 426 of the Vehicle Code.

14(f) “Plug-in hybrid electric vehicle” means a vehicle that meets
15the state’s enhanced advanced technology partial zero-emission
16vehicle standard or transitional zero-emission vehicle standard.

17

begin insert44257.3.end insert  

(a) Beginning January 1, 2017, as part of the Clean
18Vehicle Rebate Project, the state board shall provide the following
19incentive amounts:

20(1) For a vehicle qualified as a plug-in hybrid electric vehicle,
21an amount equal to 10 percent of the manufacturer’s suggested
22retail price.

23(2) For a vehicle qualified as a battery electric vehicle, an
24amount equal to 15 percent of the manufacturer’s suggested retail
25price.

26(3) For a vehicle qualified as a fuel-cell vehicle, an amount
27equal to 25 percent of the manufacturer’s suggested retail price.

28(b) Notwithstanding subdivision (a), beginning January 1, 2017,
29as part of the Clean Vehicle Rebate Project, the state board shall
30provide for residents of a disadvantaged community the following
31incentive amounts:

32(1) For a vehicle qualified as a plug-in hybrid electric vehicle,
33an amount equal to 40 percent of the manufacturer’s suggested
34retail price.

35(2) For a vehicle qualified as a battery electric vehicle, an
36amount equal to 45 percent of the manufacturer’s suggested retail
37price.

38(3) For a vehicle qualified as a fuel-cell vehicle, an amount
39equal to 55 percent of the manufacturer’s suggested retail price.

P7    1(c) (1) Moneys from the Greenhouse Gas Reduction Fund,
2created pursuant to Section 16428.8 of the Government Code,
3shall be available, upon appropriation by the Legislature, for
4allocation pursuant to subdivision (a).

5(2) Moneys available for allocation to disadvantaged
6communities shall be available, upon appropriation by the
7Legislature, for allocation pursuant to subdivision (b).

8

begin insert44257.5.end insert  

In addition to the current criteria and other
9requirements for the Clean Vehicle Rebate Project, beginning
10January 1, 2017, the state board shall limit eligible vehicles to
11those vehicles with a manufacturer’s suggested retail price of sixty
12thousand dollars ($60,000) or less.

13

begin insert44257.7.end insert  

(a) (1) The state board shall implement a process
14to allow eligible applicants under the Clean Vehicle Rebate Project
15to obtain prompt preapproval from the state board prior to
16purchasing or leasing a vehicle. The process shall provide the
17applicant a unique identifiable number, which the applicant can
18present to a new motor vehicle dealer, and shall enable the unique
19identifiable number to be verified by a new motor vehicle dealer
20at the time of purchase or lease.

21(2) The state board shall implement a process to allow a new
22motor vehicle dealer to be refunded any Clean Vehicle Rebate
23Project incentive amount applied to the applicant’s conditional
24sales contract or other vehicle purchase or lease agreement in no
25 fewer than seven days.

26(b) Upon the implementation of subdivision (a), a new motor
27vehicle dealer may apply the Clean Vehicle Rebate Project
28incentive amount to the applicant’s conditional sales contract or
29other vehicle purchase or lease agreement as a downpayment or
30amount due at lease signing or delivery.

31(c) The state board shall suspend the preapproval process
32described in paragraph (1) of subdivision (a) if inadequate funding
33is available to award incentives under the Clean Vehicle Rebate
34Project. If the state board suspends the preapproval process, it
35shall provide dealers and consumers no less than 30 days’ advance
36notice.

37

begin insert44257.9.end insert  

The state board shall adopt regulations implementing
38this chapter.

end insert
39begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 44258.4 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
40amended to read:end insert

P8    1

44258.4.  

(a) Any moneys utilizedbegin delete by this actend deletebegin insert pursuant to this
2chapterend insert
from the Greenhouse Gas Reduction Fund,begin delete establishedend delete
3begin insert createdend insert pursuant to Section 16428.8 of the Government Code,
4shall be consistent with the appropriations processes and criteria
5established by the Greenhouse Gas Reduction Fund Investment
6Plan and Communities Revitalization Act (Chapter 4.1
7(commencing with Section 39710) of Part 2).

8(b) The Charge Ahead California Initiative is hereby established
9and shall be administered by the state board. The goals of this
10initiative are to place in service at least 1,000,000 zero-emission
11and near-zero-emission vehicles by January 1, 2023, to establish
12a self-sustaining California market for zero-emission and
13near-zero-emission vehicles in which zero-emission and
14near-zero-emission vehicles are a viable mainstream option for
15individual vehicle purchasers, businesses, and public fleets, to
16increase access for disadvantaged, low-income, and
17moderate-income communities and consumers to zero-emission
18and near-zero-emission vehicles, and to increase the placement of
19those vehicles in those communities and with those consumers to
20enhance the air quality, lower greenhouse gases, and promote
21overall benefits for those communities and consumers.

22(c) The state board, in consultation with the State Energy
23Resources Conservation and Development Commission, districts,
24and the public, shall do all of the following:

25(1) (A) Include, commencing withbegin insert the funding plan for the
262016-17 fiscal year ofend insert
the Air Quality Improvement Program
27begin delete funding plan for the 2016-17 fiscal year,end deletebegin insert end insertbegin insert(Article 3 (commencing
28with Section 44274) of Chapter 8.9),end insert
a funding plan that includes
29the immediate fiscal year and a forecast of estimated funding needs
30for the subsequent two fiscal years commensurate with meeting
31the goals of this chapter. Funding needs may be described as a
32range that identifies the projected high and low funding levels
33needed for the two-year forecast period to contribute to technology
34advancement, market readiness, and consumer acceptance of zero-
35and near-zero-emission vehicle technologies. The funding plan
36shall include a market and technology assessment for each funded
37zero- and near-zero-emission vehicle technology to inform the
38appropriate funding level, incentive type, and incentive amount.
39The forecast shall include an assessment of when a self-sustaining
P9    1market is expected and how existing incentives may be modified
2to recognize expected changes in future market conditions.

3(B) Projects included in the forecast may include, but are not
4limited to, any of the following:

5(i) The Clean Vehicle Rebate Project, established pursuant to
6Section 44274.

7(ii) Light-duty zero-emission and near-zero-emission vehicle
8deployment projects eligible under the Alternative and Renewable
9Fuel and Vehicle Technology Program, established pursuant to
10Article 2 (commencing with Section 44272) of Chapter 8.9.

11(iii) Programs adopted pursuant to paragraph (4).

12(2) Update the plan required pursuant to paragraph (1) at least
13every three years through January 1, 2023.

begin delete

14(3) No later than June 30, 2015, adopt revisions to the criteria
15and other requirements for the Clean Vehicle Rebate Project,
16established pursuant to Section 44274, to ensure the following:

17(A) Rebate levels can be phased down in increments based on
18cumulative sales levels as determined by the state board.

19(B) Eligibility is limited based on income.

20(C) Consideration of the conversion to prequalification and
21point-of-sale rebates or other methods to increase participation
22rates.

23(4)

end delete

24begin insert(3)end insert (A) Establish programs that further increase access to and
25direct benefits for disadvantaged, low-income, and
26moderate-income communities and consumers from electric
27transportation, including, but not limited to, any of the following:

28(i) Financing mechanisms, including, but not limited to, a loan
29or loan-loss reserve credit enhancement program to increase
30consumer access to zero-emission and near-zero-emission vehicle
31financing and leasing options that can help lower expenditures on
32transportation and prequalification or point-of-sale rebates or other
33methods to increase participation rates among low- and
34moderate-income consumers.

35(ii) Car sharing programs that serve disadvantaged communities
36and utilize zero-emission and near-zero-emission vehicles.

37(iii) Deployment of charging infrastructure in multiunit
38dwellings in disadvantaged communities to remove barriers to
39zero-emission and near-zero-emission vehicle adoption by those
40who do not live in detached homes. This clause does not preclude
P10   1the Public Utilities Commission from acting within the scope of
2its jurisdiction.

3(iv) Additional incentives for zero-emission, near-zero-emission,
4or high-efficiency replacement vehicles or a mobility option
5available to participants in the enhanced fleet modernization
6program, established pursuant to Article 11 (commencing with
7Section 44125) of Chapter 5.

8(B) Programs implemented pursuant to this paragraph shall
9provide adequate outreach to disadvantaged, low-income, and
10moderate-income communities and consumers, including partnering
11with community-based organizations.

12begin insert

begin insertSEC. 4.end insert  

end insert

begin insertChapter 8.8 (commencing with Section 44269) is added
13to Part 5 of Division 26 of the end insert
begin insertHealth and Safety Codeend insertbegin insert, to read:end insert

begin insert

14 

15Chapter  begin insert8.8.end insert Electric Vehicle Charging Station Rebates
16

 

17

begin insert44269.end insert  

(a) The state board shall issue a rebate for the
18installation of an electric vehicle charging station to a property
19owner or lessee in the following amounts:

20(1) Two thousand dollars ($2,000) for the first year of
21installation.

22(2) One thousand five hundred dollars ($1,500) following the
23first year of installation.

24(3) One thousand dollars ($1,000) following the second year
25of installation.

26(b) The property owner or lessee shall first place the electric
27vehicle charging station in service during the calendar year for
28which the rebate is claimed.

29(c) The property owner or lessee shall maintain the electric
30vehicle charging station for a minimum period of 60 months. If
31the property owner or lessee does not maintain the electric vehicle
32charging station for a minimum period of 60 months, the state
33board shall seek reimbursement for the entire amount of the rebates
34previously issued pursuant to subdivision (a) from the property
35owner or lessee who had received those rebates.

36(d) The property owner or lessee may not claim a rebate
37pursuant to subdivision (a) for the installation of an electric vehicle
38charging station if an existing electric vehicle charging station
39has been removed from the property within the preceding 12
40months.

P11   1(e) (1) The property owner or lessee may receive rebates for
2the installation of up to two electric vehicle charging stations for
3use on a residential property.

4(2) The property owner or lessee may receive rebates for the
5installation of up to 10 electric vehicle charging stations for use
6on a commercial or multifamily property.

7(f) The state board shall adopt regulations implementing this
8chapter.

9

begin insert44269.5.end insert  

Moneys from the Greenhouse Gas Reduction Fund,
10created pursuant to Section 16428.8 of the Government Code,
11shall be available, upon appropriation by the Legislature, for
12allocation pursuant to this chapter.

end insert
13begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 6011 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
14amended to read:end insert

15

6011.  

(a) “Sales price” means the total amount for which
16tangible personal property is sold or leased or rented, as the case
17may be, valued in money, whether paid in money or otherwise,
18without any deduction on account of any of the following:

19(1) The cost of the property sold.

20(2) The cost of materials used, labor or service cost, interest
21charged, losses, or any other expenses.

22(3) The cost of transportation of the property, except as excluded
23by other provisions of this section.

24(b) The total amount for which the property is sold or leased or
25rented includes all of the following:

26(1) Any services that are a part of the sale.

27(2) Any amount for which credit is given to the purchaser by
28the seller.

29(3) The amount of any tax imposed by the United States upon
30producers and importers of gasoline and the amount of any tax
31imposed pursuant to Part 2 (commencing with Section 7301) of
32this division.

33(c) “Sales price” does not include any of the following:

34(1) Cash discounts allowed and taken on sales.

35(2) The amount charged for property returned by customers
36when that entire amount is refunded either in cash or credit, but
37this exclusion shall not apply in any instance when the customer,
38in order to obtain the refund, is required to purchase other property
39at a price greater than the amount charged for the property that is
40returned. For the purpose of this section, refund or credit of the
P12   1entire amount shall be deemed to be given when the purchase price
2less rehandling and restocking costs are refunded or credited to
3the customer. The amount withheld for rehandling and restocking
4costs may be a percentage of the sales price determined by the
5average cost of rehandling and restocking returned merchandise
6during the previous accounting cycle.

7(3) The amount charged for labor or services rendered in
8installing or applying the property sold.

9(4) (A) The amount of any tax (not including, however, any
10manufacturers’ or importers’ excise tax, except as provided in
11subparagraph (B)) imposed by the United States upon or with
12respect to retail sales whether imposed upon the retailer or the
13consumer.

14(B) The amount of manufacturers’ or importers’ excise tax
15imposed pursuant to Section 4081begin delete or 4091end delete of the Internal Revenue
16Code for which the purchaser certifies that he or she is entitled to
17either a direct refund or credit against his or her income tax for
18the federal excise tax paid or for which the purchaser issues a
19certificate pursuant to Section 6245.5.

20(5) The amount of any tax imposed by any city, county, city
21and county, or rapid transit district within the State of California
22upon or with respect to retail sales of tangible personal property,
23measured by a stated percentage of sales price or gross receipts,
24whether imposed upon the retailer or the consumer.

25(6) The amount of any tax imposed by any city, county, city
26and county, or rapid transit district within the State of California
27with respect to the storage, use or other consumption in that city,
28county, city and county, or rapid transit district of tangible personal
29property measured by a stated percentage of sales price or purchase
30price, whether the tax is imposed upon the retailer or the consumer.

31(7) Separately stated charges for transportation from the
32retailer’s place of business or other point from which shipment is
33made directly to the purchaser, but the exclusion shall not exceed
34a reasonable charge for transportation by facilities of the retailer
35or the cost to the retailer of transportation by other than facilities
36of the retailer. However, if the transportation is by facilities of the
37retailer, or the property is sold for a delivered price, this exclusion
38shall be applicable solely with respect to transportation which
39 occurs after the purchase of the property is made.

P13   1(8) Charges for transporting landfill from an excavation site to
2a site specified by the purchaser, either if the charge is separately
3stated and does not exceed a reasonable charge or if the entire
4consideration consists of payment for transportation.

5(9) The amount of any motor vehicle, mobilehome, or
6commercial coach fee or tax imposed by and paid the State of
7California that has been added to or is measured by a stated
8percentage of the sales or purchase price of a motor vehicle,
9mobilehome, or commercial coach.

10(10) (A) The amount charged for intangible personal property
11transferred with tangible personal property in any technology
12transfer agreement, if the technology transfer agreement separately
13states a reasonable price for the tangible personal property.

14(B) If the technology transfer agreement does not separately
15state a price for the tangible personal property, and the tangible
16personal property or like tangible personal property has been
17previously sold or leased, or offered for sale or lease, to third
18parties at a separate price, the price at which the tangible personal
19property was sold, leased, or offered to third parties shall be used
20to establish the retail fair market value of the tangible personal
21property subject to tax. The remaining amount charged under the
22technology transfer agreement is for the intangible personal
23property transferred.

24(C) If the technology transfer agreement does not separately
25state a price for the tangible personal property, and the tangible
26personal property or like tangible personal property has not been
27previously sold or leased, or offered for sale or lease, to third
28 parties at a separate price, the retail fair market value shall be equal
29to 200 percent of the cost of materials and labor used to produce
30the tangible personal property subject to tax. The remaining amount
31charged under the technology transfer agreement is for the
32intangible personal property transferred.

33(D) For purposes of this paragraph, “technology transfer
34agreement” means any agreement under which a person who holds
35a patent or copyright interest assigns or licenses to another person
36the right to make and sell a product or to use a process that is
37subject to the patent or copyright interest.

38(11) The amount of any tax imposed upon diesel fuel pursuant
39to Part 31 (commencing with Section 60001).

P14   1(12) (A) The amount of tax imposed by any Indian tribe within
2the State of California with respect to a retail sale of tangible
3personal property measured by a stated percentage of the sales or
4purchase price, whether the tax is imposed upon the retailer or the
5consumer.

6(B) The exclusion authorized by subparagraph (A) shall only
7apply to those retailers who are in substantial compliance with this
8part.

begin insert

9(13) (A) The value of a motor vehicle traded in for a qualified
10motor vehicle if the value of the trade-in motor vehicle is separately
11stated on the qualified motor vehicle invoice or bill of sale or
12similar document provided to the purchaser.

end insert
begin insert

13(B) For purposes of this paragraph, “qualified motor vehicle”
14means a motor vehicle that meets either of the following:

end insert
begin insert

15(i) California’s super ultra-low emission vehicle standard for
16exhaust emissions and the federal inherently low-emission vehicle
17evaporative emission standard, as defined in Part 88 (commencing
18with Section 88.101-94) of Title 40 of the Code of Federal
19Regulations as that part read on January 1, 2016.

end insert
begin insert

20(ii) California’s enhanced advanced technology partial
21zero-emission vehicle standard or transitional zero-emission
22vehicle standard.

end insert
begin insert

23(C) Consistent with Section 2230, moneys from the Greenhouse
24Gas Reduction Fund, created pursuant to Section 16428.8 of the
25Government Code, shall be available, upon appropriation by the
26Legislature, for allocation to reimburse counties and cities for any
27revenue losses resulting from the application of this paragraph.

end insert
28begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 6012 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
29amended to read:end insert

30

6012.  

(a) “Gross receipts” mean the total amount of the sale
31or lease or rental price, as the case may be, of the retail sales of
32retailers, valued in money, whether received in money or otherwise,
33without any deduction on account of any of the following:

34(1) The cost of the property sold. However, in accordance with
35any rules and regulations as the board may prescribe, a deduction
36may be taken if the retailer has purchased property for some other
37purpose than resale, has reimbursed his or her vendor for tax which
38the vendor is required to pay to the state or has paid the use tax
39with respect to the property, and has resold the property prior to
40making any use of the property other than retention, demonstration,
P15   1or display while holding it for sale in the regular course of business.
2If that deduction is taken by the retailer, no refund or credit will
3be allowed to his or her vendor with respect to the sale of the
4property.

5(2) The cost of the materials used, labor or service cost, interest
6paid, losses, or any other expense.

7(3) The cost of transportation of the property, except as excluded
8by other provisions of this section.

9(4) The amount of any tax imposed by the United States upon
10producers and importers of gasoline and the amount of any tax
11imposed pursuant to Part 2 (commencing with Section 7301) of
12this division.

13(b) The total amount of the sale or lease or rental price includes
14all of the following:

15(1) Any services that are a part of the sale.

16(2) All receipts, cash, credits and property of any kind.

17(3) Any amount for which credit is allowed by the seller to the
18purchaser.

19(c) “Gross receipts” do not include any of the following:

20(1) Cash discounts allowed and taken on sales.

21(2) Sale price of property returned by customers when that entire
22amount is refunded either in cash or credit, but this exclusion shall
23not apply in any instance when the customer, in order to obtain
24the refund, is required to purchase other property at a price greater
25than the amount charged for the property that is returned. For the
26purpose of this section, refund or credit of the entire amount shall
27be deemed to be given when the purchase price less rehandling
28and restocking costs are refunded or credited to the customer. The
29amount withheld for rehandling and restocking costs may be a
30percentage of the sales price determined by the average cost of
31rehandling and restocking returned merchandise during the
32previous accounting cycle.

33(3) The price received for labor or services used in installing or
34applying the property sold.

35(4) (A) The amount of any tax (not including, however, any
36manufacturers’ or importers’ excise tax, except as provided in
37subparagraph (B)) imposed by the United States upon or with
38respect to retail sales whether imposed upon the retailer or the
39consumer.

P16   1(B) The amount of manufacturers’ or importers’ excise tax
2imposed pursuant to Section 4081begin delete or 4091end delete of the Internal Revenue
3Code for which the purchaser certifies that he or she is entitled to
4either a direct refund or credit against his or her income tax for
5the federal excise tax paid or for which the purchaser issues a
6certificate pursuant to Section 6245.5.

7(5) The amount of any tax imposed by any city, county, city
8and county, or rapid transit district within the State of California
9upon or with respect to retail sales of tangible personal property
10measured by a stated percentage of sales price or gross receipts
11whether imposed upon the retailer or the consumer.

12(6) The amount of any tax imposed by any city, county, city
13and county, or rapid transit district within the State of California
14with respect to the storage, use or other consumption in that city,
15county, city and county, or rapid transit district of tangible personal
16property measured by a stated percentage of sales price or purchase
17price, whether the tax is imposed upon the retailer or the consumer.

18(7) Separately stated charges for transportation from the
19retailer’s place of business or other point from which shipment is
20made directly to the purchaser, but the exclusion shall not exceed
21a reasonable charge for transportation by facilities of the retailer
22or the cost to the retailer of transportation by other than facilities
23of the retailer. However, if the transportation is by facilities of the
24retailer, or the property is sold for a delivered price, this exclusion
25shall be applicable solely with respect to transportation which
26occurs after the sale of the property is made to the purchaser.

27(8) Charges for transporting landfill from an excavation site to
28a site specified by the purchaser, either if the charge is separately
29stated and does not exceed a reasonable charge or if the entire
30consideration consists of payment for transportation.

31(9) The amount of any motor vehicle, mobilehome, or
32commercial coach fee or tax imposed by and paid to the State of
33California that has been added to or is measured by a stated
34percentage of the sales or purchase price of a motor vehicle,
35mobilehome, or commercial coach.

36(10) (A) The amount charged for intangible personal property
37transferred with tangible personal property in any technology
38transfer agreement, if the technology transfer agreement separately
39states a reasonable price for the tangible personal property.

P17   1(B) If the technology transfer agreement does not separately
2state a price for the tangible personal property, and the tangible
3personal property or like tangible personal property has been
4previously sold or leased, or offered for sale or lease, to third
5parties at a separate price, the price at which the tangible personal
6property was sold, leased, or offered to third parties shall be used
7to establish the retail fair market value of the tangible personal
8property subject to tax. The remaining amount charged under the
9technology transfer agreement is for the intangible personal
10property transferred.

11(C) If the technology transfer agreement does not separately
12state a price for the tangible personal property, and the tangible
13personal property or like tangible personal property has not been
14previously sold or leased, or offered for sale or lease, to third
15parties at a separate price, the retail fair market value shall be equal
16to 200 percent of the cost of materials and labor used to produce
17the tangible personal property subject to tax. The remaining amount
18charged under the technology transfer agreement is for the
19intangible personal property transferred.

20(D) For purposes of this paragraph, “technology transfer
21agreement” means any agreement under which a person who holds
22a patent or copyright interest assigns or licenses to another person
23the right to make and sell a product or to use a process that is
24subject to the patent or copyright interest.

25(11) The amount of any tax imposed upon diesel fuel pursuant
26to Part 31 (commencing with Section 60001).

27(12) (A) The amount of tax imposed by any Indian tribe within
28the State of California with respect to a retail sale of tangible
29personal property measured by a stated percentage of the sales or
30purchase price, whether the tax is imposed upon the retailer or the
31consumer.

32(B) The exclusion authorized by subparagraph (A) shall only
33apply to those retailers who are in substantial compliance with this
34part.

35For purposes of the sales tax, if the retailers establish to the
36satisfaction of the board that the sales tax has been added to the
37total amount of the sale price and has not been absorbed by them,
38the total amount of the sale price shall be deemed to be the amount
39received exclusive of the tax imposed. Section 1656.1 of the Civil
P18   1Code shall apply in determining whether or not the retailers have
2absorbed the sales tax.

begin insert

3(13) (A) The value of a motor vehicle traded in for a qualified
4motor vehicle if the value of the trade-in motor vehicle is separately
5stated on the qualified motor vehicle invoice or bill of sale or
6similar document provided to the purchaser.

end insert
begin insert

7(B) For purposes of this paragraph, “qualified motor vehicle”
8means a motor vehicle that meets either of the following:

end insert
begin insert

9(i) California’s super ultra-low emission vehicle standard for
10exhaust emissions and the federal inherently low-emission vehicle
11evaporative emission standard, as defined in Part 88 (commencing
12with Section 88.101-94) of Title 40 of the Code of Federal
13Regulations as that part read on January 1, 2016.

end insert
begin insert

14(ii) California’s enhanced advanced technology partial
15zero-emission vehicle standard or transitional zero-emission
16vehicle standard.

end insert
begin insert

17(C) Consistent with Section 2230, moneys from the Greenhouse
18Gas Reduction Fund, created pursuant to Section 16428.8 of the
19Government Code, shall be available, upon appropriation by the
20Legislature, for allocation to reimburse counties and cities for any
21revenue losses resulting from the application of this paragraph.

end insert
22begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 5205.5 of the end insertbegin insertVehicle Codeend insertbegin insert is amended to read:end insert

23

5205.5.  

(a) Forbegin insert theend insert purposes of implementing Section 21655.9,
24the department shall make available for issuance, for a fee
25determined by the department to be sufficient to reimburse the
26department for the actual costs incurred pursuant to this section,
27distinctive decals, labels, and other identifiers that clearly
28distinguish the following vehicles from other vehicles:

29(1) A vehicle that meets California’s super ultra-low emission
30vehicle (SULEV) standard for exhaust emissions and the federal
31inherently low-emission vehicle (ILEV) evaporative emission
32standard, as defined in Part 88 (commencing with Section
3388.101-94) of Title 40 of the Code of Federal Regulations.

34(2) A vehicle that was produced during the 2004 model year or
35earlier and meets California’s ultra-low emission vehicle (ULEV)
36standard for exhaust emissions and the federal ILEV standard.

37(3) A vehicle that meets California’s enhanced advanced
38technology partial zero-emission vehicle (enhanced AT PZEV)
39standard or transitional zero-emission vehicle (TZEV) standard.

P19   1(b) The department shall include a summary of the provisions
2of this section on each motor vehicle registration renewal notice,
3or on a separate insert, if space is available and the summary can
4be included without incurring additional printing or postage costs.

5(c) The Department of Transportation shall remove individual
6HOV lanes, or portions of those lanes, during periods of peak
7congestion from the access provisions provided in subdivision (a),
8following a finding by the Department of Transportation as follows:

9(1) The lane, or portion thereof, exceeds a level of service C,
10as discussed in subdivision (b) of Section 65089 of the Government
11Code.

12(2) The operation or projected operation of the vehicles
13described in subdivision (a) in these lanes, or portions thereof, will
14significantly increase congestion.

15(3) The finding shall also demonstrate the infeasibility of
16alleviating the congestion by other means, including, but not
17limited to, reducing the use of the lane by noneligible vehicles or
18further increasing vehicle occupancy.

19(d) The State Air Resources Board shall publish and maintain
20a listing of all vehicles eligible for participation in the programs
21described in this section. The board shall provide that listing to
22the department.

23(e) (1) Forbegin insert theend insert purposes of subdivision (a), the Department of
24the California Highway Patrol and the department, in consultation
25with the Department of Transportation, shall design and specify
26the placement of the decal, label, or other identifier on the vehicle.
27Each decal, label, or other identifier issued for a vehicle shall
28display a unique number, which shall be printedbegin delete on,end deletebegin insert onend insert or affixed
29begin delete to,end deletebegin insert toend insert the vehicle registration.

30(2) Decals, labels, or other identifiers designed pursuant to this
31subdivision for a vehicle described in paragraph (3) of subdivision
32(a) shall be distinguishable from the decals, labels, or other
33identifiers that are designed for vehicles described in paragraphs
34(1) and (2) of subdivision (a).

begin delete

35(f) (1) Except as provided in paragraph (2), for purposes of
36paragraph (3) of subdivision (a), the department shall issue no
37more than 85,000 distinctive decals, labels, or other identifiers that
38clearly distinguish a vehicle specified in paragraph (3) of
39subdivision (a).

end delete
begin delete

P20   1(2) The department may issue a decal, label, or other identifier
2for a vehicle that satisfies all of the following conditions:

end delete
begin delete

3(A) The vehicle is of a type identified in paragraph (3) of
4subdivision (a).

end delete
begin delete

5(B) The owner of the vehicle is the owner of a vehicle for which
6a decal, label, or other identifier described in paragraph (1) was
7previously issued and that vehicle for which the decal, label, or
8other identifier was previously issued is determined by the
9department, on the basis of satisfactory proof submitted by the
10owner to the department, to be a nonrepairable vehicle or a total
11loss salvage vehicle.

end delete
begin delete

12(C) The owner of the vehicle applied for a decal, label, or other
13identifier pursuant to this paragraph within six months of the date
14on which the vehicle for which a decal, label, or other identifier
15was previously issued is declared to be a nonrepairable vehicle or
16a total loss salvage vehicle.

end delete
begin insert

17(f) [Reserved]

end insert

18(g) If the Metropolitan Transportation Commission, serving as
19the Bay Area Toll Authority, grants toll-free and reduced-rate
20passage on toll bridges under its jurisdiction to a vehicle pursuant
21to Section 30102.5 of the Streets and Highways Code, it shall also
22grant the same toll-free and reduced-rate passage to a vehicle
23displaying an identifier issued by the department pursuant to
24paragraph (1) or (2) of subdivision (a).

25(h) (1) Notwithstanding Section 21655.9, and except as
26provided in paragraph (2), a vehicle described in subdivision (a)
27that displays a decal, label, or identifier issued pursuant to this
28section shall be granted a toll-free or reduced-rate passage in
29high-occupancy toll lanes as described in Section 149.7 of the
30Streets and Highways Code unless prohibited by federal law.

31(2) (A) Paragraph (1) does not apply to the imposition of a toll
32imposed for passage on a toll road or tollbegin delete highway,end deletebegin insert highwayend insert that
33is not a high-occupancy toll lane as described in Section 149.7 of
34the Streets and Highways Code.

35(B) On or before March 1, 2014, paragraph (1) does not apply
36to the imposition of a toll imposed for passage in lanes designated
37for tolls pursuant to the federally supported value pricing and
38transit development demonstration program operated pursuant to
39Section 149.9 of the Streets and Highways Code for State Highway
40Route 10 or 110.

P21   1(C) Paragraph (1) does not apply to the imposition of a toll
2charged for crossing a state-owned bridge.

3(i) If the Director of Transportation determines that federal law
4does not authorize the state to allow vehicles that are identified by
5distinctive decals, labels, or other identifiers on vehicles described
6in subdivision (a) to use highway lanes or highway access ramps
7for high-occupancy vehicles regardless of vehicle occupancy, the
8Director of Transportation shall submit a notice of that
9determination to the Secretary of State.

10(j) This section shall become inoperative on January 1, 2019,
11or the date the federal authorization pursuant to Section 166 of
12Title 23 of the United States Code expires, or the date the Secretary
13of State receives the notice described in subdivision (i), whichever
14occurs first, and, as of January 1, 2019, is repealed, unless a later
15enacted statute, that becomes operative on or before January 1,
162019, deletes or extends the dates on which it becomes inoperative
17and is repealed.

begin delete
18

SECTION 1.  

Section 44274 of the Health and Safety Code is
19amended to read:

20

44274.  

(a) The Air Quality Improvement Program is hereby
21created. The program shall be administered by the state board, in
22consultation with the districts. The state board shall develop
23guidelines to implement the program. Prior to the adoption of the
24guidelines, the state board shall hold at least one public hearing.
25In addition, the state board shall hold at least three public
26workshops with at least one workshop in northern California, one
27in the central valley, and one in southern California. The purpose
28of the program shall be to fund, upon appropriation by the
29Legislature, air quality improvement projects relating to fuel and
30vehicle technologies. The primary purpose of the program shall
31be to fund projects to reduce criteria air pollutants, improve air
32quality, and provide funding for research to determine and improve
33the air quality impacts of alternative transportation fuels and
34vehicles, vessels, and equipment technologies.

35(b) The state board shall provide preference in awarding funding
36to those projects with higher benefit-cost scores that maximize the
37purposes and goals of the Air Quality Improvement Program. The
38state board also may give additional preference based on the
39following criteria, as applicable, in funding awards to projects:

P22   1(1) Proposed or potential reduction of criteria or toxic air
2pollutants.

3(2) Contribution to regional air quality improvement.

4(3) Ability to promote the use of clean alternative fuels and
5vehicle technologies as determined by the state board, in
6coordination with the commission.

7(4) Ability to achieve climate change benefits in addition to
8criteria pollutant or air toxic emissions reductions.

9(5) Ability to support market transformation of California’s
10 vehicle or equipment fleet to utilize low carbon or zero-emission
11technologies.

12(6) Ability to leverage private capital investments.

13(c) The program shall be limited to competitive grants, revolving
14loans, loan guarantees, loans, and other appropriate funding
15measures that further the purposes of the program. Projects to be
16funded shall include only the following:

17(1) Onroad and off-road equipment projects that are cost
18effective.

19(2) Projects that provide mitigation for off-road gasoline exhaust
20and evaporative emissions.

21(3) Projects that provide research to determine the air quality
22 impacts of alternative fuels and projects that study the life-cycle
23impacts of alternative fuels and conventional fuels, the emissions
24of biofuel and advanced reformulated gasoline blends, and air
25pollution improvements and control technologies for use with
26alternative fuels and vehicles.

27(4) Projects that augment the University of California’s
28agricultural experiment station and cooperative extension programs
29for research to increase sustainable biofuels production and
30improve the collection of biomass feedstock.

31(5) Incentives for small off-road equipment replacement to
32encourage consumers to replace internal combustion engine lawn
33and garden equipment.

34(6) Incentives for medium- and heavy-duty vehicles and
35equipment mitigation, including all of the following:

36(A) Lower emission schoolbus programs.

37(B) Electric, hybrid, and plug-in hybrid onroad and off-road
38medium- and heavy-duty equipment.

P23   1(C) Regional air quality improvement and attainment programs
2implemented by the state or districts in the most impacted regions
3of the state.

4(7) Workforce training initiatives related to advanced energy
5technology designed to reduce air pollution, including
6state-of-the-art equipment and goods, and new processes and
7systems. Workforce training initiatives funded shall be broad-based
8partnerships that leverage other public and private job training
9programs and resources. These partnerships may include, but are
10not limited to, employers, labor unions, labor-management
11partnerships, community organizations, workforce investment
12boards, postsecondary education providers including community
13colleges, and economic development agencies.

14(8) Incentives to identify and reduce emissions from
15high-emitting light-duty vehicles.

16(d) (1) Beginning January 1, 2011, the state board shall submit
17to the Legislature a biennial report to evaluate the implementation
18of the Air Quality Improvement Program established pursuant to
19this chapter.

20(2) The report shall include all of the following:

21(A) A list of projects funded by the Air Quality Improvement
22Account.

23(B) The expected benefits of the projects in promoting clean,
24alternative fuels and vehicle technologies.

25(C) The improvement in air quality and public health,
26greenhouse gas emissions reductions, and the progress made toward
27achieving these benefits.

28(D) The impact of the projects in making progress toward the
29attainment of state and federal air quality standards.

30(E) Recommendations for future actions.

31(3) The state board may include the information required to be
32reported pursuant to paragraph (1) in an existing report to the
33Legislature as the state board deems appropriate.

end delete


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