BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2756|
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THIRD READING
Bill No: AB 2756
Author: Assembly Revenue and Taxation Committee
Amended: 8/5/14 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-1, 6/25/14
AYES: Wolk, Knight, DeSaulnier, Hernandez, Liu
NOES: Walters
NO VOTE RECORDED: Beall
SENATE APPROPRIATIONS COMMITTEE : 6-0, 8/14/14
AYES: De Le�n, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR : 60-10, 5/28/14 - See last page for vote
SUBJECT : Tax administration: property taxes and diesel fuel
taxes
SOURCE : Author
DIGEST : This bill directs the Board of Equalization (BOE) to
create a certification process for assessors' office employees
reviewing changes in ownership and or property tax exemption.
This bill provides for a diesel tax refund to a supplier for
that portion of biodiesel fuel removed from the terminal rack as
a dyed biodiesel fuel.
ANALYSIS : The California Constitution of 1879 created the BOE
to equalize property tax rates and assessment practices among
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counties. As part of this oversight role, BOE administers the
property tax certification program, which imposes certification
and annual training requirements on property tax appraisers and
auditor-appraisers who are county employees.
This bill bars any state or county employee from making
decisions with regard to changes in ownership or property tax
exemptions, except the homeowners' exemption, unless he/she is
the holder of a valid BOE assessment analyst certificate. This
bill sets up a process to certify an assessment analyst, then
creates three additional certificates - temporary, interim, and
advanced.
BOE must create an examination for applicants seeking an
assessment analyst certificate, and may contract with the
Department of Human Resources to give the examinations. BOE
must prepare the exam with the advice and assistance of a
committee of five assessors selected by the California
Assessors' Association. BOE cannot issue a certificate to any
person who has not attained a passing grade in the examination
and demonstrated to the BOE that he/she is competent to make
change in ownership or exemption decisions. However, any
applicant denied one can ask for a review under the
Administrative Procedure Act. Individuals holding a valid
appraiser's or advanced appraiser's certificate from BOE are not
subject to this bill's requirements, and BOE cannot charge
counties for this bill's costs.
This bill requires every certified assessment analyst to
complete at least 24 hours of continuing education training
conducted or approved by BOE each year. Any training time in
excess of the 24-hour minimum that is accumulated in any one
year must be carried over as credit for future training
requirements, with a limit of three years in which the carryover
time may be credited. Failure to complete training shall
constitute grounds for revocation of a certificate, and a
proceeding to revoke shall be conducted in accordance with the
Administrative Procedure Act.
BOE must issue an advanced assessment analyst certificate for an
applicant that has held an assessment analysts certificate for
at least three years and has:
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Completed an advanced course of study prepared by BOE and
assistance of five assessors selected by the California
Assessors' Association, and
Passed an advanced level examination.
To retain a valid advanced assessment analyst certificate, every
holder must complete at least 12 hours of training in each
one-year period, but any training time for the advanced
assessment analyst certificate in excess of the 12-hour minimum
accumulated in any one year must be carried over as credit for
future training requirements, with a limit of two years in which
the carryover time may be credited. Failure to complete
training shall constitute grounds for revocation of a
certificate, and BOE can conduct a proceeding to revoke under
the Administrative Procedure Act.
BOE can issue a temporary certificate to a person who is newly
employed by the state or county to allow the person time to pass
the exam, but it cannot last more than one year, unless the
person has been duly elected or appointed to the office of
assessor. BOE cannot renew a temporary certificate.
BOE can also issue an interim certificate to a person who is
currently employed by the state or county who is making change
in ownership or exemption decisions to allow the person time to
pass the exam. BOE cannot issue an interim certificate for a
duration that exceeds four years, unless the person has been
duly elected or appointed to the office of assessor. BOE cannot
renew an interim certificate.
Applicants must disclose his/her financial interest in any legal
entity at the time of initial certification, and must complete
the form annually. This bill deems a duplicate of a filing to
the Fair Political Practices Commission to meet the requirement.
This bill clarifies that it cannot be construed to impede an
assessor from managing his/her staff resources efficiently, and
in a manner that allows non-certificated staff to prepare and
work with exemption applications and change in ownership
documents, provided that the non-certificated staff are not
responsible for making exemption or change in ownership
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decisions.
This bill makes legislative findings and declarations supporting
its purposes, and renumbers the section of law allowing for
contract employees.
Existing law, a per-gallon excise tax is imposed on the removal
of diesel fuel (1) at the refinery or terminal rack, (2) upon
entry into California, or (3) upon sale to an unlicensed person.
Existing law defines a "terminal" as a distribution facility
supplied by pipeline or vessel, from which the diesel fuel may
be removed at the rack. The term also includes a diesel fuel
production facility (i.e., a refinery) with storage facilities
not supplied by pipeline or vessel. These diesel fuel
production facilities have the same licensing and reporting
requirements as those terminals supplied by pipeline or vessel.
This bill provides for a diesel tax refund to a supplier for
that portion of biodiesel fuel removed from the terminal rack as
a dyed biodiesel fuel.
Comment
Since existing law requires appraisers to be certified, similar
certification procedures are needed for state and local
government employees making decisions in regard to change in
ownership and property tax exemptions. Change in ownership and
exemption decisions are highly complex, requiring a thorough
understanding of different legal documents, statures,
regulations, and court decisions. This bill intends to ensure
employees making change in ownership and exemption decisions are
adequately trained and educated.
Most domestically produced biodiesel comes from the Midwest.
Because distribution of this biodiesel occurs outside of the
normal bulk transfer/terminal system, the excise tax applies
upon the fuel's entry into California. As such, the "enterer"
is responsible for the diesel fuel tax when the fuel enters the
state. Biodiesel that is produced in California, on the other
hand, is generally taxed upon removal from the fuel production
facility.
In either case, when another supplier makes a subsequent
purchase of this tax-paid biodiesel to create a blended diesel
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fuel, the tax-paid biodiesel fuel is blended with "ex-tax"
diesel fuel. When this blended fuel is subsequently removed
from the terminal rack, it results in tax being assessed twice
on the biodiesel portion. In such cases, the state allows the
supplier to claim a credit on their return.
Some suppliers, however, have been unable to obtain a credit or
refund for taxes paid on biodiesel that enters the state, or is
produced in-state, and is delivered into their terminals as
tax-paid, but is subsequently removed at the terminal rack for a
nontaxable purpose. In other words, while current law allows
reimbursement for tax paid on diesel fuel that has been taxed
more than once, the current statutory regime does not account
for tax-paid diesel fuel that is taxed coming into the terminal
but removed for nontaxable purposes (i.e., dyed biodiesel
blends). In such cases, the supplier is unable to recover the
tax from the customer and is also unable to seek reimbursement
for the tax from the BOE. Since the tax-paid biodiesel portion
is blended with ex-tax dyed diesel fuel, it is not subject to
taxation when removed from the terminal rack. Because there is
no subsequent taxable event with which to claim the credit, the
current statute does not provide for a reimbursement of the
tax-paid portion of the biodiesel.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, BOE estimates
that the potential overpayment of diesel fuel tax in 2012-13 was
$800,000 (special fund). Given projected growth of the
biodiesel fuel industry, future refund amounts are likely to
increase. BOE indicates that administrative costs are
absorbable.
SUPPORT : (Verified 8/14/14)
California Assessors Association
Los Angeles County Office of the Assessor
ASSEMBLY FLOOR : 60-10, 5/28/14
AYES: Achadjian, Alejo, Ammiano, Bigelow, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Dababneh, Daly, Dickinson,
Eggman, Fong, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
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Gray, Hall, Roger Hern�ndez, Holden, Jones, Jones-Sawyer,
Levine, Linder, Lowenthal, Maienschein, Medina, Mullin,
Muratsuchi, Nazarian, Nestande, Pan, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Weber, Wieckowski,
Williams, Yamada, Atkins
NOES: Allen, Ch�vez, Conway, Donnelly, Fox, Hagman, Logue,
Mansoor, Olsen, Wilk
NO VOTE RECORDED: Dahle, Frazier, Beth Gaines, Grove, Harkey,
Melendez, Patterson, Wagner, Waldron, Vacancy
AB:d 8/16/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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