BILL NUMBER: SB 321	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Beall

                        FEBRUARY 23, 2015

   An act to amend Section 7360 of the Revenue and Taxation Code,
relating to taxation, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 321, as introduced, Beall. Motor vehicle fuel taxes: rates:
adjustments.
   Existing law, as of July 1, 2010, exempts the sale of, and the
storage, use, or other consumption of, motor vehicle fuel from
specified sales and use taxes and increases the excise tax on motor
vehicle fuel, as provided.
    Existing law requires the State Board of Equalization, for the
2011-12 fiscal year and each fiscal year thereafter, on or before
March 1 of the fiscal year immediately preceding the applicable
fiscal year, to adjust the motor vehicle fuel tax rate in a manner as
to generate an amount of revenue equal to the amount of revenue loss
attributable to the sales and use tax exemption on motor vehicle
fuel, based on estimates made by the board. Existing law also
requires, in order to maintain revenue neutrality, the board to take
into account actual net revenue gain or loss for the fiscal year
ending prior to the rate adjustment date. Existing law requires this
determined rate to be effective during the state's next fiscal year.
   This bill would, for the 2015-16 fiscal year and each fiscal year
thereafter, instead require the board, on or before July 1, 2015, or
March 1 of the fiscal year immediately preceding the applicable
fiscal year, as specified, to adjust the rate in a manner as to
generate an amount of revenue equal to the average amount of revenue
loss attributable to the exemption over the next five fiscal years,
based on estimates made by the board, and continuing to take into
account adjustments required by existing law to maintain revenue
neutrality. This bill would authorize, for rate adjustments made
after January 1, 2015, in order to reduce the potential volatility of
the revenues generated by the motor vehicle fuel tax, the board to
make partial adjustments over 3 consecutive years to take into
account the net revenue gain or loss of any fiscal year.
   This bill would also authorize, if, due to clear changes in either
fuel prices or consumption in the state, the board makes a
determination that the amount of revenue being generated by the motor
vehicle fuel tax will be significantly different than the estimates
made by the board, the board to adjust the rate more frequently than
annually, but no more frequently than quarterly in order to reduce
the potential volatility of the revenues.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 7360 of the Revenue and Taxation Code is
amended to read:
   7360.  (a) (1) A tax of eighteen cents ($0.18) is hereby imposed
upon each gallon of fuel subject to the tax in Sections 7362, 7363,
and 7364.
   (2) If the federal fuel tax is reduced below the rate of nine
cents ($0.09) per gallon and federal financial allocations to this
state for highway and exclusive public mass transit guideway purposes
are reduced or eliminated correspondingly, the tax rate imposed by
paragraph (1), on and after the date of the reduction, shall be
recalculated by an amount so that the combined state rate under
paragraph (1) and the federal tax rate per gallon equal twenty-seven
cents ($0.27).
   (3) If any person or entity is exempt or partially exempt from the
federal fuel tax at the time of a reduction, the person or entity
shall continue to be so exempt under this section.
   (b) (1) On and after July 1, 2010, in addition to the tax imposed
by subdivision (a), a tax is hereby imposed upon each gallon of motor
vehicle fuel, other than aviation gasoline, subject to the tax in
Sections 7362, 7363, and 7364 in an amount equal to seventeen and
three-tenths cents ($0.173) per gallon.
   (2)  (A)    For the 2011-12 fiscal year 
and each   to   the 2014   -15 
fiscal year  thereafter   , inclusive  ,
the board shall, on or before March 1 of the fiscal year immediately
preceding the applicable fiscal year, adjust the rate in paragraph
(1) in that manner as to generate an amount of revenue that will
equal the amount of revenue loss attributable to the exemption
provided by Section 6357.7, based on estimates made by the board, and
that rate shall be effective during the state's next fiscal year.

   (B) For the 2015-16 fiscal year, the board shall, on or before
July 1, 2015, adjust the rate in paragraph (1) in that manner as to
generate an amount of revenue that will equal the average amount of
revenue loss attributable to the exemption provided by Section 6357.7
over the next five fiscal years, based on estimates made by the
board, and that rate shall be effective during the 2015-16 fiscal
year.  
   (C) For the 2016-17 fiscal year and each fiscal year thereafter,
the board shall, on or before March 1 of the fiscal year immediately
preceding the applicable fiscal year, adjust the rate in paragraph
(1) in that manner as to generate an amount of revenue that will
equal the average amount of revenue loss attributable to the
exemption provided by Section 6357.7 over the next five fiscal years,
based on estimates made by the board, and that rate shall be
effective during the state's next fiscal year. 
   (3) In order to maintain revenue neutrality  for each year
 , beginning with the rate adjustment on or before March 1,
2012, the adjustment under paragraph (2) shall also take into
account the extent to which the actual amount of revenues derived
pursuant to this subdivision and, as applicable, Section 7361.1, the
revenue loss attributable to the exemption provided by Section 6357.7
resulted in a net revenue gain or loss for the fiscal year ending
prior to the rate adjustment date on or before March 1.  For rate
adjustments made after January 1, 2015, in order to reduce the
potential volatility of the revenues generated by the tax imposed
under this subdivision, the board may make partial adjustments over
three consecutive years to take into account the net revenue gain or
loss of any fiscal year.  
   (4) If, due to clear changes in either fuel prices or consumption
in the state, the board makes a determination that the amount of
revenue being generated by the tax imposed by this section will be
significantly different than the estimates made by the board, the
board may adjust the rate in paragraph (1) more frequently than
annually, but no more frequently than quarterly in order to reduce
the potential volatility of the revenues.  
   (4) 
    (5)  The intent of paragraphs (2) and (3) is to ensure
that  the act adding   Chapter 6 of the Statutes
of 2011, which added  this subdivision and Section 
6357.7   6357.7,  does not produce a net revenue
gain in state taxes.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to avoid a significant and devastating decrease in the
amount of funding available for the maintenance of California's local
streets and roads, it is necessary that this act take effect
immediately.