BILL ANALYSIS �
AB 2679
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Date of Hearing: April 23, 2012
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Henry T. Perea, Chair
AB 2679 (Committee on Transportation) - As Amended: March 27,
2012
Majority vote. Fiscal committee.
SUBJECT : Transportation: omnibus bill
SUMMARY : Enacts various technical and noncontroversial
provisions related to transportation. Specifically, the
tax-related provisions of this bill :
1)Align the dates for setting the sales tax prepayment rates on
motor vehicle fuel, aircraft jet fuel, and diesel fuel with
the motor vehicle and diesel fuel excise tax rate adjustment
date.
2)Establish that the tax prepayment rate for motor vehicle fuel,
aircraft jet fuel, and diesel fuel as established by the State
Board of Equalization (BOE) on January 1, 2013, shall remain
in effect through June 30, 2013.
3)Require that the BOE make the motor vehicle fuel, aircraft jet
fuel, and diesel fuel rate determination no later than March 1
of the same year as the effective date of the new rate.
4)Require the BOE to notify every supplier, wholesaler, and
retailer of motor vehicle fuel, aircraft jet fuel, and diesel
fuel of the rate determination no later than May 1 of each
year.
5)Align the diesel fuel interstate user tax rate adjustment date
with the diesel fuel excise tax rate adjustment date and
establish a new source of information to be used to compute
the rate. Specifically, the provisions establish that:
a) Existing law governing the determination of the
interstate user diesel fuel tax rate shall remain in effect
until January 1, 2013. The tax rate established by the BOE
on January 1, 2013 shall remain in effect only through June
30, 2013.
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b) Commencing on July 1, 2013, and on each July 1
thereafter, the BOE shall establish an interstate user per
gallon tax rate in conformity with existing law except that
in determining the average retail price per gallon, the BOE
shall use the weekly average retail price as reported by
the United States Energy Information Administration.
c) Establish that the BOE shall make its determination of
the rate no later than March 1 of the same year as the
effective date of the new rate.
EXISTING LAW requires:
1)A motor vehicle fuel, aircraft jet fuel, or diesel fuel
supplier to collect a prepayment of retail sales tax from the
person to whom the fuel is sold or distributed. The BOE is
required to determine and set the rates for prepayment on the
sales tax by November 1 of the year prior to the effective
date of the rates. The BOE must also notify every supplier,
wholesaler, and retailer of motor vehicle fuel, aircraft jet
fuel, and diesel fuel of the new rates by January 1 via mail.
2)The BOE, beginning on July 1, 2011, for motor vehicle fuel,
and July 1, 2012, for diesel fuel, to adjust the excise tax
rates so that the total revenues derived from the imposition
of state excise tax and sales or use tax on sales of motor
vehicle fuel and diesel fuel remain the same. The BOE is
required to determine the adjusted excise tax rates by March 1
of the fiscal year (FY) immediately preceding the applicable
FY.
3)Diesel fuel interstate users in a qualified motor vehicle to
pay a tax comprised of a "component b" rate. The "component
b" rate is set annually by the BOE at a cents-per-gallon rate
equivalent to the statewide sales tax imposed on the retail
sales of diesel fuel in California. The "component b" rate is
set once each year by October 1 and is effective on January 1
of the succeeding year.
FISCAL EFFECT : The BOE estimates that this bill would not
result in a revenue impact to the state.
COMMENTS :
1)The Transportation Committee has provided the following BOE
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statement to explain the tax related provisions of this bill:
Aligns the adjustment dates of the gasoline and diesel fuel
sales tax prepayment rates with the excise tax rate
adjustments for both gasoline and diesel fuel as required
by the fuel tax swap. The dates would be changed so that,
if and when there are adjustments to the gasoline and
diesel fuel excise tax rates, they would also be accounted
for in the sales tax prepayment rate thereby reducing the
time and costs associated with adjusting the rates at two
different times, for both the BOE and the affected
industry. Technical changes would also allow the BOE to
notify fuel vendors of a new prepayment rate by means other
than mail and would make a clarifying reference to the
additional sales tax on diesel fuel set to take effect on
July 1, 2011.
2)The BOE notes the following:
a) Sponsor and Purpose . This bill is sponsored by the BOE
and is a housekeeping measure that would simply align the
adjustment dates of the gasoline and diesel fuel sales tax
prepayment rates and the diesel fuel Interstate User rate
with the dates of the excise tax rate adjustments for both
gasoline and diesel fuel as required by the fuel tax swap.
b) This bill is about a change in dates, not rates . The
following table depicts the proposed date changes:
Summary Chart of Deadlines and Dates
----------------------------------------------------------------
| | | |
| | Rate Setting | Effective Date of Rate |
| | Date | Change |
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| Ta | | |
| x | | |
----------------------------------------------------------------
|--------------+----------+-----------+------------+--------------|
| | | | | |
| | Current | Propose | Current | Proposed |
| | Law | d | Law | Law |
| | | Law | | |
| | | | | |
|--------------+----------+-----------+------------+--------------|
| | | | | |
| Sales | November | March | April | July 1st |
| Tax | | 1st | 1st | |
| Prepayme | 1s | | | |
| nt | t | | | |
|--------------+----------+-----------+------------+--------------|
| | | | | |
| Interstate | | | | |
| User | | | | |
| component | October | March | January | July 1st |
| b Diesel | 1st | 1st | 1st | |
| Fuel Tax | | | | |
| Rate | | | | |
|--------------+----------+-----------+------------+--------------|
| | | | | |
| Fuel Tax | March | No | July | No |
| Swap - | 1st | change | 1st |change |
| Excise | | | | |
| Tax | | | | |
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c) This bill should benefit both BOE and industry . This
bill would reduce the time and costs associated with
adjusting the rates at least two different times during the
year, for both the BOE and the affected industry. And,
because of the annual adjustment to the excise tax rate on
July 1, it would be administratively expedient for the BOE,
and convenient for the interstate user, to also set the
"component b" rate at the same time. The excise tax rate
combined with the "component b" rate comprises the
interstate user tax rate.
3)Committee Staff Comments:
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a) This bill was double-referred with the Committee on
Transportation, and passed out of that committee on consent
on April 16, 2012.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Rosailda Perez / M. David Ruff / REV. &
TAX. / (916) 319-2098