Amended in Assembly April 4, 2016

Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1851

Introduced by Assembly Members Gray and Ting

February 10, 2016

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

LEGISLATIVE COUNSEL’S DIGEST

AB 1851, as amended, Gray. Vehicular air pollution: reduction incentives.

(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, begin insert the end insert 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.

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.

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.

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 begin delete specified allocations. end delete begin insert allocations under those provisions to residents of those communities. end insert

This bill also would require the state board to issue specified rebates begin delete for end delete begin insert up to the costs associated with the purchase and end insert 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.

(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 begin delete state, end delete begin insert state end insert measured by sales price. The Sales and Use Tax Law defines the terms “gross receipts” and “sales price.”

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.

(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.

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

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.  

The Legislature finds and declares all of the
following:

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

(b) To help achieve this greenhouse gas emissions goal, the
State Air Resources Board has required large vehicle manufacturers
to produce a certain amount of zero-emission vehicles as a
percentage of the overall number of vehicles the manufacturer
makes for sale in the state. The present mandate is 15.4 percent of
new vehicles delivered for sale by 2025.

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

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

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

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

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

(h) Using last year’s 2,000,000 new vehicle sales as an estimate
of 2025 vehicle sales by covered manufacturers, the 15.4 percent
mandate by the State Air Resources Board would require 308,000
zero-emission vehicles and partial-zero-emission vehicles be
delivered for sale in the state that year. If the current 41.5 percent
of new vehicle sales will continue to be made up of sport utility
vehicles, pickups, and vans, over 25 percent of the remaining
1,201,000 passenger vehicles delivered for sale just nine years
from now must be electric or plug-in electric vehicles.

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

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

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

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

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

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

SEC. 2.  

Chapter 8.1 (commencing with Section 44257.1) is
added to Part 5 of Division 26 of the Health and Safety Code, to
read:

 

Chapter  8.1. Zero-Emission Vehicle Incentives

 

44257.1.  

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

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

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

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

(d) “Fuel-cell vehicle” means a vehicle that meets the state’s
super ultra-low emission vehicle standard for exhaust emissions
and the federal inherently low-emission vehicle evaporative
emission standard, as defined in Part 88 (commencing with Section
88.101-94) of Title 40 of the Code of Federal Regulations, as that
part read on January 1, 2016, and is powered by an electric motor
drawing current from compressed hydrogen into a fuel cell.

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

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

44257.3.  

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

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

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

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

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

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

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

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

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

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

44257.5.  

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

44257.7.  

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

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

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

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

44257.9.  

The state board shall adopt regulations implementing
this chapter.

SEC. 3.  

Section 44258.4 of the Health and Safety Code is
amended to read:

44258.4.  

(a) Any moneys utilized pursuant to this chapter from
the Greenhouse Gas Reduction Fund, created pursuant to Section
16428.8 of the Government Code, shall be consistent with the
appropriations processes and criteria established by the Greenhouse
Gas Reduction Fund Investment Plan and Communities
Revitalization Act (Chapter 4.1 (commencing with Section 39710)
of Part 2).

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

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

(1) (A) Include, commencing with the funding plan for the
2016-17 fiscal year of the Air Quality Improvement Program
(Article 3 (commencing with Section 44274) of Chapter 8.9), a
funding plan that includes the immediate fiscal year and a forecast
of estimated funding needs for the subsequent two fiscal years
commensurate with meeting the goals of this chapter. Funding
needs may be described as a range that identifies the projected
high and low funding levels needed for the two-year forecast period
to contribute to technology advancement, market readiness, and
consumer acceptance of zero- and near-zero-emission vehicle
technologies. The funding plan shall include a market and
technology assessment for each funded zero- and
near-zero-emission vehicle technology to inform the appropriate
funding level, incentive type, and incentive amount. The forecast
shall include an assessment of when a self-sustaining market is
expected and how existing incentives may be modified to recognize
expected changes in future market conditions.

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

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

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

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

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

begin insert

(3) No later than June 30, 2015, and consistent with Chapter
8.1 (commencing with Section 44257.1), adopt revisions to the
criteria and other requirements for the Clean Vehicle Rebate
Project, established pursuant to Section 44274, to ensure the
following:

end insert begin insert

(A) Eligibility is limited based on income.

end insert begin insert

(B) Consideration of methods to increase participation rates.

end insert begin delete

(3)

end delete

begin insert (4) end insert  (A) Establish programs that further increase access to and
direct benefits for disadvantaged, low-income, and
moderate-income communities and consumers from electric
transportation, including, but not limited to, any of the following:

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

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

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

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

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

SEC. 4.  

Chapter 8.8 (commencing with Section 44269) is added
to Part 5 of Division 26 of the Health and Safety Code, to read:

 

Chapter  8.8. Electric Vehicle Charging Station Rebates

 

44269.  

(a) The state board shall issue a rebate begin delete for the end delete begin insert up to
the costs associated with the purchase and end insert installation of an electric
vehicle charging station to a property owner or lessee in the
following amounts:

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

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

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

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

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

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

(e) (1) The property owner or lessee may receive rebates for
the installation of up to two electric vehicle charging stations for
use on a residential begin delete property. end delete begin insert property located in a disadvantaged
community, as identified pursuant to Section 39711. end insert

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

begin insert

(f) The state board shall limit eligible electric vehicle charging
stations to level 2 charging and rapid charging ports.

end insert begin delete

(f)

end delete

begin insert (g) end insert  The state board shall adopt regulations implementing this
chapter.

44269.5.  

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

SEC. 5.  

Section 6011 of the Revenue and Taxation Code is
amended to read:

6011.  

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

(1) The cost of the property sold.

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

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

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

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

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

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

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

(1) Cash discounts allowed and taken on sales.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 6.  

Section 6012 of the Revenue and Taxation Code is
amended to read:

6012.  

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

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

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

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

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

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

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

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

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

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

(1) Cash discounts allowed and taken on sales.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 7.  

Section 5205.5 of the Vehicle Code is amended to
read:

5205.5.  

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

(1) A vehicle that meets California’s super ultra-low emission
vehicle (SULEV) standard for exhaust emissions and the federal
inherently low-emission vehicle (ILEV) evaporative emission
standard, as defined in Part 88 (commencing with Section
88.101-94) of Title 40 of the Code of Federal Regulations.

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

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

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

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

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

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

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

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

(e) (1) For the purposes of subdivision (a), the Department of
the California Highway Patrol and the department, in consultation
with the Department of Transportation, shall design and specify
the placement of the decal, label, or other identifier on the vehicle.
Each decal, label, or other identifier issued for a vehicle shall
display a unique number, which shall be printed on or affixed to
the vehicle registration.

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

(f) [Reserved]

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

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

(2) (A) Paragraph (1) does not apply to the imposition of a toll
imposed for passage on a toll road or toll highway that is not a
high-occupancy toll lane as described in Section 149.7 of the
Streets and Highways Code.

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

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

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

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