AB 2127,
as amended, O'Donnell. begin deleteMotor vehicle fuel: gasohol. end deletebegin insertTaxation: motor vehicle fuel: use fuel: alcohol fuels.end insert
Existing law subjects fuels, including alcohol fuels, used to propel a motor vehicle on a highway to either the Motor Vehicle Fuel Tax Law or the Use Fuel Tax Law. Existing law subjects alcohol fuels containing no more than 15% gasoline to the Use Fuel Tax Law at the tax rate of 9 cents per gallon. Existing law subjects gasohol, which includes alcohol containing more than 15% gasoline, to the Motor Vehicle Fuel Tax Law, which through June 30, 2016, is taxed at the rate of 30 cents per gallon.
end insertbegin insertThe Motor Vehicle Fuel Tax Law imposes a tax upon each gallon of motor vehicle fuel removed from a refinery or terminal rack in this state, entered into this state, or sold in this state. That law also provides a refund to any person who buys and uses tax-paid gasoline to produce a blended alcohol fuel of no more than 15% gasoline, which is taxed as a use fuel.
end insertbegin insertThe Use Fuel Tax Law imposes an excise tax for the use of certain fuels, including an alcohol fuel that is ethanol or methanol containing not more than 15% gasoline. The tax is imposed on the user and requires the vendor who sells and delivers the fuel into a fuel tank of the user to collect the tax and give the user a receipt.
end insertbegin insertThis bill instead, until January 1, 2022, would change the gasoline content percentage in both laws to 18 percent. By increasing the allowable percentage of gasoline in alcohol fuels subject to the Use Fuel Tax Law, this bill additionally would subject to that tax, users of alcohol fuels that contain more than 15% and not more than 18% gasoline.
end insertbegin insertThis bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.
end insertExisting law, the Motor Vehicle Fuel Tax Law, imposes a tax upon the privilege of distributing motor fuel and defines the term “gasohol” for purposes of that law. Gasohol is defined as all blends of gasoline, and alcohol containing more than 15% gasoline.
end deleteThis bill would redefine gasohol to instead mean all blends of gasoline, and alcohol containing more than 18% gasoline.
end deleteExisting law, the Use Fuel Tax Law, imposes an excise tax for the use of fuel, as defined, and provides that the excise tax imposed upon ethanol or methanol containing not more than 15% gasoline or diesel fuels shall be1⁄2 of that rate.
end deleteThis bill would instead apply that discounted rate to ethanol or methanol containing not more than 18% gasoline or diesel fuel.
end deleteThis bill would take effect immediately as a tax levy.
Vote: begin deletemajority end deletebegin insert2⁄3end insert.
Appropriation: no.
Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
Section 7318 of the Revenue and Taxation Code
2 is amended to read:
begin insert(a)end insertbegin insert end insert“Gasohol” means all blends of gasoline, and alcohol
4containing more than 18 percent gasoline.
5
(b) This section shall become inoperative and shall be repealed
6on January 1, 2022.
begin insertSection 7318 is added to the end insertbegin insertRevenue and Taxation
8Codeend insertbegin insert, to read:end insert
(a) “Gasohol” means all blends of gasoline, and alcohol
10containing more than 15 percent gasoline.
P3 1
(b) This section shall become operative on January 1, 2022.
Section 8651.8 of the Revenue and Taxation Code is
4amended to read:
(a) Notwithstanding Section 8651, the excise tax
6imposed upon ethanol or methanol containing not more than 18
7percent gasoline or diesel fuels shall be one-half the rate prescribed
8by Section 8651 for each gallon of fuel used.
9(b) All references in this code to Section 8651 shall be deemed,
10with respect to the rate imposed upon ethanol or methanol, to also
11refer to this section.
12
(c) This section shall become inoperative and shall be repealed
13on January 1, 2022.
begin insertSection 8651.8 is added to the end insertbegin insertRevenue and Taxation
15Codeend insertbegin insert, to read:end insert
(a) Notwithstanding Section 8651, the excise tax
17imposed upon ethanol or methanol containing not more than 15
18percent gasoline or diesel fuels shall be one-half the rate
19prescribed by Section 8651 for each gallon of fuel used.
20
(b) All references in this code to Section 8651 shall be deemed,
21with respect to the rate imposed upon ethanol or methanol, to also
22refer to this section.
23
(c) This section shall become operative on January 1, 2022.
This act provides for a tax levy within the meaning of
26Article IV of the Constitution and shall go into immediate effect.
O
98