AB 2262, as amended, Frazier. Private railroad car tax.
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. Under the Private Railroad Car Tax Law, the State Board of Equalization assesses and taxes private railroad cars operated upon railroads in this state by class based on the owner’s acquisition cost, less depreciation, as provided. In making an assessment, the board is required to determine the average number of each class of private railroad cars physically present in the state in the calendar year immediately preceding the fiscal year in which the tax is imposed upon the basis of car days.
begin insertThis bill would instead require the board, in making the assessment, to determine the physical presence of private railroad cars in the state in the calendar year immediately preceding the fiscal year in which the tax is imposed upon the basis of mileage.
end insertbegin insertExisting law also requires the board, in making the above assessment, to value the cars by class based on the owner’s acquisition cost, less depreciation, and sets forth the manner in which depreciation is calculated for each class of cars, as specified.
end insertbegin insertThis bill would instead require the board, in making the assessment, to value the cars based on the owner’s acquisition cost, including additions and betterments, less depreciation, and would revise the manner in which the depreciation is calculated, as specified.
end insertbegin insertExisting law requires the board to exclude from the California factor car mileage, car days, or other data that occurs while cars are not qualified for revenue service and are in a repair facility in the state, as specified. Existing law defines the term “class of private railroad cars” for these purposes.
end insertbegin insertThis bill would delete the definition of the term “class of private railroad cars” and would eliminate the requirement that the board exclude from the California factor car mileage, car days, or other data that occurs while cars are not qualified for revenue service and are in a repair facility in the state.
end insertThis bill would make a technical change to those provisions.
end deleteVote: begin deletemajority end deletebegin insert2⁄3end insert.
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:
begin insertSection 11206 of the end insertbegin insertRevenue and Taxation Codeend insert
2begin insert is repealed.end insert
“Class of private railroad cars” means the Association
4of American Railroad’s, or successor organization’s, one letter
5alpha component of its car type codes as contained in that
6organization’s Exhibit D of the UMLER specification manual or
7successor exhibit.
begin insertSection 11292 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
9amended to read:end insert
In making the assessment, the board shall value the
11carsbegin delete by classend delete based on the owner’s acquisition cost,begin insert including
12additions and betterments,end insert less depreciation. The depreciation
13shall be computed for these enumerated Association of American
14Railroad’s, or successor organization’s, car type groups on a
15straight-line basis with the indicated depreciable life schedules
16with a maximum of 80 percent depreciation allowed.
17(a) Stack cars (alpha S): 22 yearsbegin delete minus the age at acquisitionend delete.
P3 1(b) Lightweight, low profile intermodal cars (alpha Q): 22 years
2begin delete minus the age at acquisitionend delete.
3(c) Flat cars (alpha F): 22 yearsbegin delete minus the age at acquisitionend delete.
4(d) Conventional intermodal cars (alpha P): 22 yearsbegin delete minus the .
5age at acquisitionend delete
6(e) Vehicular flat cars (alpha V): 22 yearsbegin delete minus the age at .
7acquisitionend delete
8(f) All other cars (all other alphas): 25 yearsbegin delete minus the age at .
9acquisitionend delete
10(g) Betterments: the remaining depreciable life of the car to
11which the betterment is applied.
12Acquisition cost is defined as the expenditures required to be
13capitalized by generally accepted accounting principles.
Section 11293 of the Revenue and Taxation Code is
16amended to read:
In making an assessment, the board shall determine the
18begin deleteaverage number of each classend deletebegin insert physical presenceend insert of private railroad
19carsbegin delete physically presentend delete in this state in the calendar year immediately
20preceding the fiscal year in which the tax is imposed upon the basis
21ofbegin delete car daysend deletebegin insert mileageend insert. The board shall
multiply thebegin delete average numberend delete
22begin insert ratioend insert so determined by the valuebegin delete of a car of that classend delete as determined
23under Section 11292 and use the product for the assessment of the
24cars.
begin insertSection 11294 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
26repealed.end insert
In determining the averages required in Section 11293,
28the board shall exclude from the California factor car mileage, car
29days or such other data which occurs while cars are not qualified
30for revenue service and are in a repair facility in this state requiring
31and undergoing or awaiting remodeling, overhaul, renovation,
32conversion or repair which necessitates total labor in excess of 10
33man-hours.
34Car days excluded pursuant to this section shall not exceed 90
35days per car unless the claimant provides substantiation of the
36necessity for the additional days in such form as prescribed by the
37board.
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