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 thebegin delete 2015-16end deletebegin insert 2016-end insertbegin insert17end insert fiscal year and each fiscal year thereafter would, instead require thebegin delete board, on or before July 1, 2015, orend deletebegin insert board onend insert 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.
end deleteVote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 7360 of the Revenue and Taxation Code
2 is amended to read:
(a) (1) A tax of eighteen cents ($0.18) is hereby imposed
4upon each gallon of fuel subject to the tax in Sections 7362, 7363,
5and 7364.
6(2) If the federal fuel tax is reduced below the rate of nine cents
7($0.09) per gallon and federal financial allocations to this state for
8highway and exclusive public mass transit guideway purposes are
9reduced or eliminated correspondingly, the tax rate imposed by
10paragraph (1), on and after the date of the reduction, shall be
11recalculated by an amount so that the combined state rate under
12paragraph (1) and the federal tax rate per gallon equal twenty-seven
13cents ($0.27).
14(3) If any person or entity is exempt or partially exempt from
15the federal fuel tax at the time of a reduction, the person or entity
16shall continue to be so exempt under this section.
17(b) (1) On and after July 1, 2010, in addition to the tax imposed
18by subdivision (a), a tax is hereby imposed upon each gallon of
P3 1motor vehicle fuel, other than aviation gasoline, subject to the tax
2in Sections 7362, 7363, and 7364 in an amount equal to seventeen
3and three-tenths cents ($0.173) per gallon.
4(2) (A) For the 2011-12 fiscal year to thebegin delete 2014-15end deletebegin insert 2015-end insertbegin insert16end insert
5
fiscal year, inclusive, the board shall, on or before March 1 of the
6fiscal year immediately preceding the applicable fiscal year, adjust
7the rate in paragraph (1) in that manner as to generate an amount
8of revenue that will equal the amount of revenue loss attributable
9to the exemption provided by Section 6357.7, based on estimates
10made by the board, and that rate shall be effective during the state’s
11next fiscal year.
12(B) For the 2015-16 fiscal year, the board shall, on or before
13July 1, 2015, adjust the rate in paragraph (1) in that manner as to
14generate an amount of revenue that will equal the amount of
15revenue loss attributable to the exemption provided by Section
166357.7, based on estimates made by the board that reflect the
17combined average of the actual fuel price over the previous four
18fiscal years and the estimated fuel price for the current fiscal year,
19and that rate shall be effective during the 2015-16 fiscal year.
20(C)
end delete
21begin insert(B)end insert For the 2016-17 fiscal year and each fiscal year thereafter,
22the board shall, on or before March 1 of the fiscal year immediately
23preceding the applicable fiscal year, adjust the rate in paragraph
24(1) in that manner as to generate an amount of revenue that will
25equal the amount of revenue loss attributable to the exemption
26provided by Section 6357.7, based on estimates made by the board
27that reflect the combined average of the actual fuel price over the
28previous four fiscal years and the estimated fuel price for the
29current fiscal year, and that rate shall be effective during the state’s
30next fiscal year.
31(3) In order to maintain revenue neutrality for each year,
32beginning with the rate adjustment on or before March 1, 2012,
33
the adjustment under paragraph (2) shall also take into account the
34extent to which the actual amount of revenues derived pursuant to
35this subdivision and, as applicable, Section 7361.1, the revenue
36loss attributable to the exemption provided by Section 6357.7
37resulted in a net revenue gain or loss for the fiscal year ending
38prior to the rate adjustment date on or before March 1.
39(4) If, due to clear changes in either fuel prices or consumption
40in the state, the board makes a determination that the amount of
P4 1revenue being generated by the tax imposed by this section will
2be significantly different than the estimates made by the board,
3the board may adjust the rate in paragraph (1) more frequently
4than annually, but no more frequently than every six months in
5order to reduce the potential
volatility of the revenues.
6(5)
end delete
7begin insert(4)end insert The intent of paragraphs (2) and (3) is to ensure that Chapter
86 of the Statutes of 2011, which added this subdivision and Section
96357.7, does not produce a net revenue gain in state taxes.
10 (6)
end delete
11begin insert (5)end insert It is the intent of the Legislature that the amendments made
12by the act adding this paragraph does not produce a net revenue
13gain in state taxes.
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