BILL NUMBER: AB 2749 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 3, 2016
AMENDED IN ASSEMBLY MARCH 28, 2016
INTRODUCED BY Assembly Member Brough
(Coauthor: Senator Pan)
FEBRUARY 19, 2016
An act to add Section 1656.5 to the Civil Code, and to add
Part 13.7 (commencing with Section 31201) to Division 2 of the
Revenue and Taxation Code, relating to heavy equipment
rentals.
LEGISLATIVE COUNSEL'S DIGEST
AB 2749, as amended, Brough. Heavy equipment rentals: rental
agreements. agreements: property tax
reimbursement.
Existing law prescribes the manner in which contracts or
agreements may be created. The Fee Collection
Procedures Law, the violation of which is a crime, provides
procedures for the collection of certain fees and surcharges.
This bill would establish, in a rental agreement of heavy
equipment property by a qualified heavy equipment renter, a
rebuttable presumption that the parties agreed to the addition of
estimated personal property tax reimbursement to the rental price of
heavy equipment property to a lessee if specified conditions occur,
including that the rental agreement states that the estimated
personal property tax reimbursement amount charged is the amount
estimated by the qualified heavy equipment renter owed for personal
property tax on that heavy equipment property for a specified lien
date and that any amounts in excess of the actual amount of personal
property taxes owed on the heavy equipment property will be remitted
to the State Board of Equalization for deposit into the state General
Fund.
This bill would require every qualified heavy equipment renter to
register with the State Board of Equalization, as provided, and would
require a qualified heavy equipment renter to file an annual return
with the board, in a form prescribed by the board, that shows the ad
valorem property tax levied on qualified heavy equipment property for
the previous fiscal year lien date and the property tax
reimbursement collected in the aggregate on any heavy equipment
property for the 12-month period ending August 31. This bill would
require any property tax reimbursement that is collected in excess of
the ad valorem property tax levied to be paid to the board and would
require the board to collect those excess reimbursement amounts
pursuant to the procedures set forth in the Fee Collection Procedures
Law. This bill would require all amounts, less refunds, to be
deposited into the General Fund.
By expanding the application of the Fee Collection Procedures Law,
which imposes criminal penalties for various acts, 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 no reimbursement is required by this
act for a specified reason.
This bill would require, on or before October 1, 2017, and on or
before every October 1 each year thereafter, a qualified heavy
equipment renter to file a return with the State Board of
Equalization, in the form and manner as prescribed by the board, if
the qualified heavy equipment renter has collected estimated personal
property tax reimbursement amounts in excess of the actual amount of
personal property tax owed on the heavy equipment property for the
previous fiscal year lien date. The bill would require the qualified
heavy equipment renter to remit that excess estimated personal
property tax reimbursement amount with the return and would require
the board to deposit those amounts into the General Fund.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1656.5 is added to the Civil Code, to read:
1656.5. (a) Whether a qualified heavy equipment renter may add
estimated personal property tax reimbursement to the rental price of
heavy equipment property to a lessee depends solely upon the terms of
the rental agreement. It shall be presumed that the parties agreed
to the addition of estimated personal property tax reimbursement to
the rental price of heavy equipment property to a lessee if all of
the following conditions occur:
(1) The rental agreement expressly provides for the addition of
estimated personal property tax reimbursement.
(2) Estimated personal property tax reimbursement is separately
stated and charged on the rental agreement.
(3) The rental agreement states that the estimated personal
property tax reimbursement amount charged is the amount estimated by
the qualified heavy equipment renter owed for personal property tax
on that heavy equipment property for a specified lien date, and that
any amounts in excess of the actual amount of personal property taxes
owed on the heavy equipment property will be remitted to the State
Board of Equalization for deposit into the state General Fund.
(4) The estimated personal property tax reimbursement amount shall
not exceed 0.75 percent of the rental price of the heavy equipment
property.
(b) The presumptions created by this section are rebuttable
presumptions.
(c) On or before October 1, 2017, and on or before every October 1
each year thereafter, a qualified heavy equipment renter shall file
a return with the State Board of Equalization, in the form and manner
as prescribed by the board, if the qualified heavy equipment renter
has collected estimated personal property tax reimbursement amounts
in excess of the actual amount of personal property tax owed on the
heavy equipment property for the previous fiscal year lien date. The
qualified heavy equipment renter shall remit that excess estimated
personal property tax reimbursement amount with the return and the
board shall deposit those amounts into the General Fund.
(d) For purposes of this section, all of the following definitions
shall apply:
(1) "Heavy equipment property" means rental property of a
qualified heavy equipment renter.
(2) "Qualified heavy equipment renter" means a renter that
satisfies both of the following:
(A) The principal business of the renter is the rental of
qualified heavy equipment.
(B) The renter is engaged in a line of business described in Code
532412 or 532310 of the North American Industry Classification System
published by the United States Office of Management and Budget, 2012
edition.
(3) "Rental price"
(c) For purposes of this section,
"rental price" means the total amount of the charge for renting
the heavy equipment property, excluding any separately stated
charges that are not rental charges, including, but not limited to,
separately stated charges for delivery and pickup fees, damage
waivers, environmental mitigation fees, sales tax reimbursement, or
use taxes.
SEC. 2. Part 13.7 (commencing with Section 31201)
is added to Division 2 of the Revenue and Taxation Code
, to read:
PART 13.7. Property Tax Reimbursement Law
31201. This part shall be known and may be cited as the Property
Tax Reimbursement Law.
31202. For purposes of this part, all of the following
definitions shall apply:
(a) "Heavy equipment property" means rental property of a
qualified heavy equipment renter.
(b) "Qualified heavy equipment renter" means a renter that
satisfies both of the following:
(1) The principal business of the renter is the rental of
qualified heavy equipment.
(2) The renter is engaged in a line of business described in Code
532412 or 532310 of the North American Industry Classification System
published by the United States Office of Management and Budget, 2012
edition.
31203. Every qualified heavy equipment renter shall register with
the board. Every application for registration shall be made upon a
form prescribed by the board and shall set forth the name under which
the applicant transacts or intends to transact business, the
location of its place or places of business, and other information as
the board may require. An application for registration shall be
authenticated in a form or pursuant to methods as may be prescribed
by the board.
31204. On or before September 30 of each year, a qualified heavy
equipment renter shall file a return with the board for the preceding
12-month period ending August 31, in a form prescribed by the board.
Returns shall be authenticated in a form or pursuant to methods as
may be prescribed by the board.
31205. The return shall show the ad valorem property tax levied
on qualified heavy equipment property for the previous fiscal year
lien date and the property tax reimbursement collected in the
aggregate on any heavy equipment property for the 12-month period
ending August 31. If a qualified heavy equipment renter collected
property tax reimbursement in excess of the ad valorem property tax
levied, the excess property tax reimbursement constitutes a debt owed
by the qualified heavy equipment renter to the state. The excess
property tax reimbursement collected is due and payable to the state
annually on or before September 30 and shall be paid in the form of
remittances payable to the board.
31206. The board shall collect any property tax reimbursement
pursuant to the Fee Collection Procedures Law (Part 30 (commencing
with Section 55001)) to the extent these provisions are not
inconsistent with this part. For purposes of administration of this
part, references in the Fee Collection Procedures Law to "feepayer"
and "fee" shall include "qualified heavy equipment renter" and
"property tax reimbursement."
31207. Any property tax reimbursement collected by a qualified
heavy equipment renter shall conform to Section 1656.5 of the Civil
Code.
31208. All revenues derived under this part, less refunds, shall
be deposited in the General Fund.
SEC. 3. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.