BILL NUMBER: SB 321	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 27, 2015
	AMENDED IN SENATE  APRIL 23, 2015
	AMENDED IN SENATE  MARCH 26, 2015

INTRODUCED BY   Senator Beall

                        FEBRUARY 23, 2015

   An act to amend Section 7360 of the Revenue and Taxation Code,
relating to  taxation, and declaring the urgency thereof, to
take effect immediately.   taxation. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 321, as amended, Beall. Motor vehicle fuel taxes: rates:
adjustments.
   Existing law, as of July 1, 2010, exempts the sale of, and the
storage, use, or other consumption of, motor vehicle fuel from
specified sales and use taxes and increases the excise tax on motor
vehicle fuel, as provided.
    Existing law requires the State Board of Equalization, for the
2011-12 fiscal year and each fiscal year thereafter, on or before
March 1 of the fiscal year immediately preceding the applicable
fiscal year, to adjust the motor vehicle fuel tax rate in a manner as
to generate an amount of revenue equal to the amount of revenue loss
attributable to the sales and use tax exemption on motor vehicle
fuel, based on estimates made by the board. Existing law also
requires, in order to maintain revenue for each year, the board to
take into account actual net revenue gain or loss for the fiscal year
ending prior to the rate adjustment date. Existing law requires this
adjusted rate to be effective during the state's next fiscal year.
   This bill for the 2015-16 fiscal year and each fiscal year
thereafter would, instead require the board, on or before July 1,
2015, or March 1 of the fiscal year immediately preceding the
applicable fiscal year, as specified, to adjust the rate in a manner
as to generate an amount of revenue equal to the amount of revenue
loss attributable to the exemption, based on estimates made by the
board that reflect the combined average of the actual fuel price over
the previous 4 fiscal years and the estimated fuel price for the
current fiscal year, and continuing to take into account adjustments
required by existing law to maintain revenue neutrality  for each
year  .
   This bill would also authorize, if, due to clear changes in either
fuel prices or consumption in the state, the board makes a
determination that the amount of revenue being generated by the motor
vehicle fuel tax will be significantly different than the estimates
made by the board, the board to adjust the rate more frequently than
annually, but no more frequently than every 6 months in order to
reduce the potential volatility of the revenues. 
   This bill would declare that it is to take effect immediately as
an urgency statute. 
   Vote:  2/3   majority  . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 7360 of the Revenue and Taxation Code is
amended to read:
   7360.  (a) (1) A tax of eighteen cents ($0.18) is hereby imposed
upon each gallon of fuel subject to the tax in Sections 7362, 7363,
and 7364.
   (2) If the federal fuel tax is reduced below the rate of nine
cents ($0.09) per gallon and federal financial allocations to this
state for highway and exclusive public mass transit guideway purposes
are reduced or eliminated correspondingly, the tax rate imposed by
paragraph (1), on and after the date of the reduction, shall be
recalculated by an amount so that the combined state rate under
paragraph (1) and the federal tax rate per gallon equal twenty-seven
cents ($0.27).
   (3) If any person or entity is exempt or partially exempt from the
federal fuel tax at the time of a reduction, the person or entity
shall continue to be so exempt under this section.
   (b) (1) On and after July 1, 2010, in addition to the tax imposed
by subdivision (a), a tax is hereby imposed upon each gallon of motor
vehicle fuel, other than aviation gasoline, subject to the tax in
Sections 7362, 7363, and 7364 in an amount equal to seventeen and
three-tenths cents ($0.173) per gallon.
   (2) (A) For the 2011-12 fiscal year to the 2014-15 fiscal year,
inclusive, the board shall, on or before March 1 of the fiscal year
immediately preceding the applicable fiscal year, adjust the rate in
paragraph (1) in that manner as to generate an amount of revenue that
will equal the amount of revenue loss attributable to the exemption
provided by Section 6357.7, based on estimates made by the board, and
that rate shall be effective during the state's next fiscal year.
   (B) For the 2015-16 fiscal year, the board shall, on or before
July 1, 2015, adjust the rate in paragraph (1) in that manner as to
generate an amount of revenue that will equal the amount of revenue
loss attributable to the exemption provided by Section 6357.7, based
on estimates made by the board that reflect the combined average of
the actual fuel price over the previous four fiscal years and the
estimated fuel price for the current fiscal year, and that rate shall
be effective during the 2015-16 fiscal year.
   (C) For the 2016-17 fiscal year and each fiscal year thereafter,
the board shall, on or before March 1 of the fiscal year immediately
preceding the applicable fiscal year, adjust the rate in paragraph
(1) in that manner as to generate an amount of revenue that will
equal the amount of revenue loss attributable to the exemption
provided by Section 6357.7, based on estimates made by the board that
reflect the combined average of the actual fuel price over the
previous four fiscal years and the estimated fuel price for the
current fiscal year, and that rate shall be effective during the
state's next fiscal year.
   (3) In order to maintain revenue  neutrality, 
 neutrality for each year,  beginning with the rate
adjustment on or before March 1, 2012, the adjustment under paragraph
(2) shall also take into account the extent to which the actual
amount of revenues derived pursuant to this subdivision and, as
applicable, Section 7361.1, the revenue loss attributable to the
exemption provided by Section 6357.7 resulted in a net revenue gain
or loss for the fiscal year ending prior to the rate adjustment date
on or before March 1.
   (4) If, due to clear changes in either fuel prices or consumption
in the state, the board makes a determination that the amount of
revenue being generated by the tax imposed by this section will be
significantly different than the estimates made by the board, the
board may adjust the rate in paragraph (1) more frequently than
annually, but no more frequently than every six months in order to
reduce the potential volatility of the revenues.
   (5) The intent of paragraphs (2) and (3) is to ensure that Chapter
6 of the Statutes of 2011, which added this subdivision and Section
6357.7, does not produce a net revenue gain in state taxes.
    (6) It is the intent of the Legislature that the amendments made
by the act adding this paragraph does not produce a net revenue gain
in state taxes.  Revenue neutrality, as used in this section,
does not refer to revenues generated in any particular fiscal year,
but instead means that, over a reasonable period of fiscal years, the
actual amount of revenues derived pursuant to this subdivision is
equal to the estimated amount of revenue loss attributable to the
exemption provided by Section 6357.7.  
  SEC. 2.    This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
   In order to avoid a significant and devastating decrease in the
amount of funding available for the maintenance of California's local
streets and roads, it is necessary that this act take effect
immediately.