SB 480, as introduced, Pan. Taxation: qualified heavy equipment.
The California Constitution authorizes the Legislature to classify personal property for differential taxation or for exemption by means of a statute approved by a 2⁄3 vote of the membership of each house.
This bill would, pursuant to this constitutional authorization, on and after July 1, 2016, impose a tax on every qualified renter for the privilege of renting qualified heavy equipment in this state at the rate of 0.75% of the rental price from the renting of qualified heavy equipment. This bill would require a qualified renter to pay and remit the tax, as provided. This bill would provide that this tax shall be in lieu of any personal property tax on qualified heavy equipment. This bill would require the tax to be administered by the State Board of Equalization and to be collected pursuant to the procedures set forth in the Fee Collection Procedures Law. This bill would require all revenues, interest, penalties, and other amounts, less refunds and the board’s costs of administration, derived from the imposition of the tax to be deposited in the General Fund.
Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing property tax law also reduces the amounts of ad valorem property tax revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to these general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992-93 and 1993-94 fiscal years, that the amounts of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. It requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund in that county for allocation to school districts, community college districts, and the county office of education.
This bill would, for the 2016-17 fiscal year and for each fiscal year thereafter, require the county auditor to increase the total amount of ad valorem property tax revenue that is otherwise required to be allocated among the county and each city and special district in the county by the qualified heavy equipment reimbursement amount, as defined, and to commensurately decrease the amount of ad valorem property tax revenue that is otherwise required to be allocated to the county Educational Revenue Augmentation Fund and, if necessary, the amount of those revenue otherwise required to be allocated to school districts, as specified, by the qualified heavy equipment reimbursement amount.
By expanding the application of the Fee Collection Procedures Law, the violation of which is a crime, and by imposing new duties upon local officials in the allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 97.83 is added to the Revenue and
2Taxation Code, to read:
(a) (1) Notwithstanding any other law, for the 2016-17
4fiscal year and for each fiscal year thereafter, the auditor of each
5county shall do both of the following:
6(A) Increase the total amount of ad valorem property tax revenue
7that is otherwise required to be allocated among the county and
8each city and special district in the county by the qualified heavy
9equipment reimbursement amount. The qualified heavy equipment
10reimbursement amount shall be allocated among the county, cities,
11and special districts in proportion to the amounts of ad valorem
12property tax revenue otherwise allocated among those local
13agencies.
14(B) Decrease the total amount of ad valorem
property tax
15revenue that is otherwise required to be allocated to the county’s
16Educational Revenue Augmentation Fund by the qualified heavy
17equipment reimbursement amount.
18(2) (A) In the event that the county’s Educational Revenue
19Augmentation Fund does not have sufficient funds to offset the
20qualified heavy equipment reimbursement amount, the auditor
21shall, to the extent that those funds are insufficient, decrease the
22total amount of ad valorem property tax that is allocated to local
23school districts providing instruction for kindergarten and grades
241 to 12, inclusive, that are excess tax school entities, in proportion
25to their allocations of ad valorem property tax revenue allocated
26to school districts providing instruction for kindergarten and grades
271 to 12, inclusive, in the county, and allocate that amount among
28the county, cities, and special districts in proportion to the amounts
29of ad valorem property tax
revenues otherwise allocated among
30those local agencies.
P4 1(B) In the event that the amount of ad valorem property tax
2revenues allocated to the Educational Revenue Augmentation
3Fund, together with the allocations to those school districts
4providing instruction for kindergarten and grades 1 to 12, inclusive,
5that are excess tax school entities, is insufficient to offset the
6qualified heavy equipment reimbursement amount, the auditor
7may also decrease the amount of ad valorem property tax revenues
8allocated to school districts providing instruction for kindergarten
9and grades 1 to 12, inclusive, that are not excess tax school entities,
10and allocate that amount among the county, cities, and special
11districts in proportion to the amounts of ad valorem property tax
12revenue otherwise allocated among those local agencies.
13(b) For purposes of this section, “qualified heavy equipment
14
reimbursement amount” means the total amount of ad valorem
15property tax revenue received by the county and each city and
16special district in the county in the 2014-15 fiscal year from renters
17of qualified heavy equipment, as defined in Part 11 (commencing
18with Section 5500) of Division 1.
19(c) For the 2017-18 fiscal year and for each fiscal year
20thereafter, ad valorem property tax revenue allocations made
21pursuant to Sections 96.1 and 96.5, or any successor to either of
22those provisions, shall not incorporate the allocation adjustments
23made by this section.
Part 11 (commencing with Section 5500) is added to
25Division 1 of the Revenue and Taxation Code, to read:
26
For purposes of this part, all of the following definitions
30shall apply:
31(a) “Rental price” means the total amount of the charge for
32renting the qualified heavy equipment, excluding any separately
33stated charges that are not rental charges, including, but not limited
34to, separately stated charges for delivery and pickup fees, damage
35waivers, environmental mitigation fees, or use taxes.
36(b) (1) “Qualified heavy equipment” means any construction,
37earthmoving, or industrial equipment that is mobile and rented by
38a qualified renter, including attachments for the equipment or other
39ancillary equipment, including, but not limited to, all of the
40following:
P5 1(A) A self-propelled vehicle that is not designed to be driven
2on the highway.
3(B) Industrial electrical generation equipment or portable
4heating, ventilating, and air-conditioning equipment.
5(C) Industrial lift equipment.
6(D) Industrial material equipment.
7(E) Equipment used in shoring, shielding, and ground trenching.
8(F) Equipment or vehicles not subject to the fee imposed
9pursuant to the Vehicle License Fee Law (Part 5 (commencing
10with Section 10701) of Division 2).
11(2) Qualified heavy equipment is mobile if the qualified heavy
12equipment is not intended to be
permanently affixed to real
13property for the purpose of using the qualified heavy equipment
14for its intended use. Qualified heavy equipment is mobile if it is
15intended to be moved among worksites as needed.
16(c) “Qualified renter” means a renter that satisfies all of the
17following:
18(1) The principal business of the renter is the rental of qualified
19heavy equipment.
20(2) Is engaged in a line of business described in Code 532412
21of the North American Industry Classification System published
22by the United States Office of Management and Budget, 2012
23edition.
24(d) “Renting” or “rent” means a rental for a period of less than
25365 days or for an undefined period, or an open-ended contract.
(a) On and after July 1, 2016, there is hereby imposed
27a tax on every qualified renter for the privilege of renting qualified
28heavy equipment in this state at the rate of 0.75 percent of the
29rental price from the renting of qualified heavy equipment.
30(b) The qualified renter shall pay and remit the tax to the board
31as required by this part.
32(c) The board shall administer and collect the tax imposed by
33this part pursuant to the Fee Collection Procedures Law (Part 30
34(commencing with Section 55001) of Division 2). For purposes
35of this part, the references in the Fee Collection Procedures Law
36to “fee” shall include the tax imposed by this part, and references
37to “feepayer” shall
include a person liable for the payment of the
38taxes imposed by this part and collected pursuant to that law.
Every qualified renter shall register with the board. Every
40application for registration shall be made upon a form prescribed
P6 1by the board and shall set forth the name under which the applicant
2transacts or intends to transact business, the location of its place
3or places of business, and other information as the board may
4require. An application for an account shall be authenticated in a
5form or pursuant to methods as may be prescribed by the board.
The board may prescribe, adopt, and enforce regulations
7relating to the administration and enforcement of this part,
8including, but not limited to, collections, reporting, refunds, and
9appeals.
The taxes imposed by this part are due and payable to
11the board quarterly on or before the last day of the month next
12succeeding each quarterly period.
(a) On or before the last day of the month following
14each quarterly period of three months, a return for the preceding
15quarterly period shall be filed using electronic media with the
16board.
17(b) The board may prescribe those forms and reporting
18requirements as are necessary to implement the tax.
19(c) Returns shall be authenticated in a form or pursuant to
20methods as may be prescribed by the board.
All revenues, interest, penalties, and other amounts
22collected pursuant to this part, less refunds and the board’s costs
23of administration, shall be deposited in the General Fund.
(a) For the 2016-17 fiscal year and for each fiscal year
25thereafter, the tax imposed pursuant to this part shall be in lieu of
26any property tax on qualified heavy equipment subject to taxation
27pursuant to this part.
28(b) Property of a qualified renter that is not subject to the tax
29imposed pursuant to this part shall remain subject to any applicable
30property taxes.
No reimbursement is required by this act pursuant to
32Section 6 of Article XIII B of the California Constitution for certain
33costs that may be incurred by a local agency or school district
34because, in that regard, this act creates a new crime or infraction,
35eliminates a crime or infraction, or changes the penalty for a crime
36or infraction, within the meaning of Section 17556 of the
37Government Code, or changes the definition of a crime within the
38meaning of Section 6 of Article XIII B of the California
39Constitution.
P7 1However, if the Commission on State Mandates determines that
2this act contains other costs mandated by the state, reimbursement
3to local agencies and school districts for those costs
shall be made
4pursuant to Part 7 (commencing with Section 17500) of Division
54 of Title 2 of the Government Code.
Notwithstanding Section 2229 of the Revenue and
7Taxation Code, no appropriation is made by this act and the state
8shall not reimburse any local agency for any property tax revenues
9lost by it pursuant to this act.
O
99