Amended in Senate April 6, 2015

Senate BillNo. 433


Introduced by Senator Berryhill

February 25, 2015


An act to amendbegin delete Section 20end deletebegin insert Sections 7360 and 60050end insert of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

SB 433, as amended, Berryhill. begin deleteTaxation. end deletebegin insertMotor vehicle fuel taxes: diesel fuel taxes: rates: adjustments.end insert

begin insert

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.

end insert
begin insert

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 that 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 neutrality, 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 determined rate to be effective during the state’s next fiscal year.

end insert
begin insert

This bill would, for the 2016-17 fiscal year and each fiscal year thereafter, instead require the Department of Finance to adjust the motor vehicle fuel tax rate as described above, and would require the department to notify the board of the rate adjustment effective for the state’s next fiscal year, as provided.

end insert
begin insert

Existing law, as of July 1, 2011, increases the taxes on the sale of, and the storage, use, or other consumption of, diesel fuel, and reduces the excise tax on diesel fuel.

end insert
begin insert

Existing law requires the board, for the 2012-13 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 diesel fuel tax rate by reducing it in that manner as to result in a revenue loss that will equal the amount of revenue gain attributable to the increase in the sales and use tax rate, based on estimates made by the board. Existing law also requires, in order to maintain revenue neutrality, 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 determined rate to be effective during the state’s next fiscal year.

end insert
begin insert

This bill would, for the 2016-17 fiscal year and each fiscal year thereafter, instead require the Department of Finance to adjust the diesel fuel excise tax rate as described above, and would require the department to notify the board of the rate adjustment effective for the state’s next fiscal year, as provided.

end insert
begin delete

Existing law defines the term “board” to mean the State Board of Equalization for purposes of the Revenue and Taxation Code.

end delete
begin delete

This bill would make a technical, nonsubstantive change to that law.

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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:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 7360 of the end insertbegin insertRevenue and Taxation Codeend insert
2begin insert is amended to read:end insert

3

7360.  

(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
P3    1paragraph (1) and the federal tax rate per gallon equal twenty-seven
2cents ($0.27).

3(3) If any person or entity is exempt or partially exempt from
4the federal fuel tax at the time of a reduction, the person or entity
5shall continue to be so exempt under this section.

6(b) (1) On and after July 1, 2010, in addition to the tax imposed
7by subdivision (a), a tax is hereby imposed upon each gallon of
8motor vehicle fuel, other than aviation gasoline, subject to the tax
9in Sections 7362, 7363, and 7364 in an amount equal to seventeen
10and three-tenths cents ($0.173) per gallon.

11(2) begin insert(A)end insertbegin insertend insertFor the 2011-12 fiscal yearbegin delete and each fiscal year
12thereafterend delete
begin insert to the 2015-16 fiscal year, inclusiveend insert, the board shall, on
13or before March 1 of the fiscal year immediately preceding the
14applicable fiscal year, adjust the rate in paragraph (1) in that
15manner as to generate an amount of revenue that will equal the
16amount of revenue loss attributable to the exemption provided by
17Section 6357.7, based on estimates made by the board, and that
18rate shall be effective during the state’s next fiscal year.

begin insert

19(B) For the 2016-17 fiscal year and each fiscal year thereafter,
20the Department of Finance shall, on or before March 1 of the fiscal
21year immediately preceding the applicable fiscal year, adjust the
22rate in paragraph (1) in that manner as to generate an amount of
23revenue that will equal the amount of revenue loss attributable to
24the exemption provided by Section 6357.7, based on estimates
25made by the Department of Finance, and that rate shall be effective
26during the state’s next fiscal year.

end insert

27(3) In order to maintain revenue neutrality for each year,
28beginning with the rate adjustment on or before March 1, 2012,
29the adjustment under paragraph (2) shall also take into account the
30extent to which the actual amount of revenues derived pursuant to
31this subdivision and, as applicable, Section 7361.1, the revenue
32loss attributable to the exemption provided by Section 6357.7
33resulted in a net revenue gain or loss for the fiscal year ending
34prior to the rate adjustment date on or before March 1.

35(4) The intent of paragraphs (2) and (3) is to ensure thatbegin delete the act
36addingend delete
begin insert Chapter 6 of the Statutes of 2011, which addedend insert this
37subdivision and Sectionbegin delete 6357.7end deletebegin insert 6357.7,end insert does not produce a net
38revenue gain in state taxes.

begin insert

P4    1(5) No later than March 10, 2016, and each March 10 thereafter,
2the Department of Finance shall notify the board of the rate
3adjustment effective for the state’s next fiscal year.

end insert
4begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 60050 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
5amended to read:end insert

6

60050.  

(a) (1) A tax of eighteen cents ($0.18) is hereby
7imposed upon each gallon of diesel fuel subject to the tax in
8Sections 60051, 60052, and 60058.

9(2) If the federal fuel tax is reduced below the rate of fifteen
10cents ($0.15) per gallon and federal financial allocations to this
11state for highway and exclusive public mass transit guideway
12purposes are reduced or eliminated correspondingly, the tax rate
13imposed by paragraph (1), including any reduction or adjustment
14pursuant to subdivision (b), on and after the date of the reduction,
15shall be increased by an amount so that the combined state rate
16under paragraph (1) and the federal tax rate per gallon equal what
17it would have been in the absence of the federal reduction.

18(3) If any person or entity is exempt or partially exempt from
19the federal fuel tax at the time of a reduction, the person or entity
20shall continue to be exempt under this section.

21(b) (1) On July 1, 2011, the tax rate specified in paragraph (1)
22of subdivision (a) shall be reduced to thirteen cents ($0.13) and
23every July 1 thereafter shall be adjusted pursuant to paragraphs
24(2) and (3).

25(2) begin insert(A)end insertbegin insertend insertFor the 2012-13 fiscal yearbegin delete and each fiscal year
26thereafterend delete
begin insert to the 2015-16 fiscal year, inclusiveend insert, the board shall, on
27or before March 1 of the fiscal year immediately preceding the
28applicable fiscal year, adjust the rate reduction in paragraph (1) in
29that manner as to result in a revenue loss attributable to paragraph
30(1) that will equal the amount of revenue gain attributable to
31Sections 6051.8 and 6201.8, based on estimates made by the board,
32and that rate shall be effective during the state’s next fiscal year.

begin insert

33(B) For the 2016-17 fiscal year and each fiscal year thereafter,
34the Department of Finance shall, on or before March 1 of the fiscal
35year immediately preceding the applicable fiscal year, adjust the
36rate reduction in paragraph (1) in that manner as to result in a
37revenue loss attributable to paragraph (1) that will equal the
38amount of revenue gain attributable to Sections 6051.8 and 6201.8,
39based on estimates made by the Department of Finance, and that
40rate shall be effective during the state’s next fiscal year.

end insert

P5    1(3) In order to maintain revenue neutrality for each year,
2beginning with the rate adjustment on or before March 1, 2013,
3the adjustment under paragraph (2) shall take into account the
4extent to which the actual amount of revenues derived pursuant to
5Sections 6051.8 and 6201.8 and the revenue loss attributable to
6this subdivision resulted in a net revenue gain or loss for the fiscal
7year ending prior to the rate adjustment date on or before March
81.

9(4) The intent of paragraphs (2) and (3) is to ensure thatbegin delete the act
10addingend delete
begin insert Chapter 6 of the Statutes of 2011, which addedend insert this
11subdivision and Sections 6051.8 andbegin delete 6201.8end deletebegin insert 6201.8,end insert does not
12produce a net revenue gain in state taxes.

begin insert

13(5) No later than March 10, 2016, and each March 10 thereafter,
14the Department of Finance shall notify the board of the rate
15adjustment effective for the state’s next fiscal year

end insert
begin delete16

SECTION 1.  

Section 20 of the Revenue and Taxation Code is
17amended to read:

18

20.  

“Board” shall mean the State Board of Equalization.

end delete


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