BILL NUMBER: AB 1190 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 7, 2008
INTRODUCED BY Assembly Members Horton and Huffman
FEBRUARY 23, 2007
An act to add Sections 8651.1, 8651.2, 8651.3, 60050.2,
60050.3, and 60050.4 to amend Sections 7304, 7313,
7324, 7326, 7332, 7338, 7339, 7363, 7373, 7401, 7710,
60003, 60010, 60022, 60033, 60052, 60064, 60100, and 60350 of, to
amend, repeal, and add Sections 8102, 8129, 60115, 60501, 60502, and
60523 of, to add Sections 7346, 7347, 7348, 7349, 7352, 7353, 7354,
7360.4, 7360.5, 7369.1, 7374, 7475, 7652.9, 7655.5, 60003.1, 60004.1,
60011.1, 60022.1, 60022.2, 60049.2, 60049.5, 60049.6, 60049.7,
60050.5, 60050.6, 60053.1, 60065, 60136, 60203, and 60207.5 to, to
add and repeal Sections 7351, 7360.1, 7360.2, 7360.3, 60049.4,
60050.2, 60050.3, and 60050.4 of, and to repeal Sections 7318,
8651.8, and 8657 of, the Revenue and Taxation Code, relating to
taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1190, as amended, Horton. Taxation: fuel tax: exemptions and
credits.
The Use Motor Vehicle Fuel Tax Law
and the Diesel Fuel Tax Law impose a tax of $0.18 per gallon of fuel
subject to tax under those laws, and require, if the federal fuel tax
is reduced below the specified rate and federal financial
allocations to this state are reduced or eliminated, that the tax
rate be increased so that the combined state and federal tax rate per
gallon equals $0.33.
This bill would, under both laws, exempt Category 1 low-
carbon fuel, as defined, from the taxes imposed by
those laws, would decrease the rate of taxes imposed by those laws to
$0.09 per gallon for Category 2 reduced- carb
on fuel, and would create a high-carbon fuel tax for
Category 3 high- carbon fuel, as defined.
This bill would correspondingly decrease the combined state
and federal tax rate limits, as applicable to each type of fuel.
This bill would authorize the State Board of Equalization
to adjust, as necessary annually , the
rate of high-carbon fuel tax , according to a
specified formula, to ensure that the total amount of revenues
derived from that tax rate, as estimated on the basis of the revenues
derived from the tax rate imposed on Category 3 high-carbon
fuel during the immediately preceding fiscal year,
does not exceed the amount of revenue loss during the same year
attributable to the exemptions allowed under both laws
the Motor Vehicle Fuel Tax Law or the Diesel Fuel Tax
Law, respectively, for Category 1 low -
carbon and 2 fuel reduced-
carbon fuels .
The Use Fuel Tax Law imposes an excise tax upon each gallon of
fuel, subject to tax under that law, including alcohol fuels.
This bill would delete the provisions of that law relating to the
imposition of the excise tax on ethanol and methanol, as specified,
would revise the definition of "motor vehicle fuel," under the Motor
Vehicle Tax Law, to include ethanol, methanol, and butanol that has
been produced from biomass feedstocks, as specified, within the
meaning of "motor vehicle fuel," and would make corresponding changes
to various administrative and definitional provisions of the Motor
Vehicle Tax Law.
This bill would also revise the definition of "diesel fuel" under
the Diesel Fuel Tax Law to include petroleum-based diesel fuel,
renewable diesel fuel, or their blends, and to exclude alcohol, as
provided, and would make corresponding changes to various provisions
relating to the administration of that law.
This bill would also require specified persons, under the Motor
Vehicle Tax Law and the Diesel Fuel Tax Law, to file a return or
report, as provided, electronically, as authorized by the board, and
would impose a penalty of $1,000 on a person required to file a
return or report if that person fails to make a return or report
before the prescribed date or to include all of the necessary
information, or if the person files the return or report in an
unauthorized format, misclassifies fuels, or knowingly includes in
that report or return incorrect information.
This bill would also require the State Board of Equalization to
provide written notification to the Legislature, the Director of
Finance, and the Legislative Counsel regarding the tax incentives for
Category 1 and 2 fuels, as specified.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) Greenhouse gas emissions pose a serious threat to the health
of California's citizens and the quality of the environment, and
California's transportation sector is the leading source of
greenhouse gas emissions in the state, contributing over 40 percent
of the state's annual greenhouse gas emissions.
(b) The California Global Warming Solutions Act of 2006 (Division
25.5 (commencing with Section 38500) of the Health and Safety Code)
requires California to reduce statewide greenhouse gas emissions to
1990 levels by 2020.
(c) California is almost entirely dependent on one energy source
for its transportation economy, relying on petroleum-based fuels to
meet 96 percent of the state's transportation needs.
(d) California's dependence on a single type of transportation
fuel, the price of which is highly volatile, imperils our economic
security, endangers our jobs, and jeopardizes our industries.
Diversification of the sources of transportation fuel will help
protect our jobs and economy from the consequences of oil price
shocks. Alternative fuels can provide economic development
opportunities and reduce emissions of greenhouse gases, criteria
pollutants, and toxic air contaminants.
(e) This act will provide various tax incentives for alternative
types of fuel to increase the use of alternative transportation fuels
and to advance the state's leadership in clean technologies and
ensure an affordable, reliable fuel supply.
SEC. 2. Section 7304 of the Revenue and
Taxation Code is amended to read:
7304. "Alcohol" includes means
ethanol and , methanol , or butanol
that has been produced from biomass feedstocks and has been prepared
and certified for use in motor vehicles .
SEC. 3. Section 7313 of the Revenue and
Taxation Code is amended to read:
7313. "Finished gasoline" means all products (including
gasohol) that are commonly known or sold as gasoline ,
including the finished California specification gasoline base
blending component (CARBOB) .
SEC. 4. Section 7318 of the Revenue and
Taxation Code is repealed.
7318. "Gasohol" means all blends of gasoline, and alcohol
containing more than 15 percent gasoline.
SEC. 5. Section 7324 of the Revenue and
Taxation Code is amended to read:
7324. "Licensed supplier" includes means
any enterer, position holder, refiner, terminal
operator, or throughputter supplier that is
licensed as a supplier pursuant to Section 7451.
SEC. 6. Section 7326 of the Revenue and
Taxation Code is amended to read:
7326. "Motor vehicle fuel" means gasoline and
, aviation gasoline , and alcohol . It does not
include aircraft jet fuel, diesel fuel, kerosene,
liquefied petroleum gas, natural gas in liquid or gaseous form,
alcohol, or racing fuel.
SEC. 7. Section 7332 of the Revenue and
Taxation Code is amended to read:
7332. "Position holder" includes any person that holds the
inventory position in the motor vehicle fuel, as reflected on the
records of the terminal operator. A person holds the inventory
position in motor vehicle fuel when that person has a contractual
agreement with the terminal operator for the use of storage
facilities and terminaling services at a terminal with respect to the
motor vehicle fuel. "Position holder" includes a terminal operator
that owns motor vehicle fuel in its terminal. "Position holder"
includes a person who holds the inventory position in an alcohol fuel
storage facility.
SEC. 8. Section 7338 of the Revenue and
Taxation Code is amended to read:
7338. "Supplier" includes any person who is any of the following:
(a) Blender, as defined in Section 7308.
(b) Enterer, as defined in Section 7311.
(c) Position holder, as defined in Section 7332.
(d) Refiner, as defined in Section 7334.
(e) Terminal operator, as defined in Section 7340.
(f) Throughputter, as defined in Section 7341.
(g) Alcohol fuel producer, as defined in Section 7346.
SEC. 9. Section 7339 of the Revenue and
Taxation Code is amended to read:
7339. "Terminal" means a motor vehicle fuel storage and
distribution facility that is supplied by pipeline or vessel, and
from which motor vehicle fuel may be removed at a rack.
"Terminal" includes a storage facility at a refinery or alcohol fuel
production facility dedicated to storing motor vehicle fuel if the
fuel may be removed at a rack. For purposes of this part, "terminal"
also includes an alcohol fuel storage facility as defined
in Section 7348.
SEC. 10. Section 7346 is added to the
Revenue and Taxation Code , to read:
7346. "Alcohol fuel producer" means a person that produces
alcohol in this state at an alcohol fuel production facility.
SEC. 11. Section 7347 is added to the
Revenue and Taxation Code , to read:
7347. "Alcohol fuel production facility" means a facility, other
than a refinery, in which alcohol is produced, or a facility in which
alcohol is produced and blended with gasoline.
SEC. 12. Section 7348 is added to the
Revenue and Taxation Code , to read:
7348. "Alcohol fuel storage facility" means a storage facility,
other than a terminal, that is supplied by railcar, pipeline, or
vessel and from which alcohol may be removed at a rack.
SEC. 13. Section 7349 is added to the
Revenue and Taxation Code , to read:
7349. (a) "Lifecycle Greenhouse Gas Emission" (LGGE) means the
lifecycle greenhouse gas emissions of finished gasoline produced from
petroleum, as identified and listed by the California Air Resources
Board.
(b) The California Air Resources Board shall identify and list the
LGGE for all fuel subject to tax under Section 7362, 7363, or 7364,
and shall notify the board when the changes are made to that list.
SEC. 14. Section 7351 is added to the
Revenue and Taxation Code , to read:
7351. (a) "Clean Fuel Incentive Balance" means the net difference
between the amount of revenue lost due to the tax rate reductions
allowed under Sections 7360.1 and 7360.2 for Category 1 and 2 fuels
and the incremental revenue realized as a result of the rate applied
to Category 3 fuel pursuant to Section 7360.3.
(b) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 15. Section 7352 is added to the
Revenue and Taxation Code , to read:
7352. "Category 1 fuel" means low-carbon motor vehicle fuel, or a
finished component thereof, that creates 40 percent or less of the
LGGE, as identified and listed by the California Air Resources Board.
SEC. 16. Section 7353 is added to the
Revenue and Taxation Code , to read:
7353. "Category 2 fuel" means reduced-carbon motor vehicle fuel,
or a finished component thereof, that creates over 40 percent but
less than 75 percent of the LGGE, as identified and listed by the
California Air Resources Board.
SEC. 17. Section 7354 is added to the
Revenue and Taxation Code , to read:
7354. "Category 3 fuel" means either of the following:
(a) High-carbon motor vehicle fuel, or a finished component
thereof, that is neither Category 1 fuel, as defined in Section 7352,
nor Category 2 fuel, as defined in Section 7353.
(b) Any motor vehicle fuel, or a finished component thereof, that
is not labeled.
SEC. 18. Section 7360.1 is added to the
Revenue and Taxation Code , to read:
7360.1. (a) Notwithstanding Section 7360, on and after the
effective date specified in Section 7360.5, a tax rate of zero cents
($0.00) shall be imposed on Category 1 fuel that is subject to the
tax under Section 7362, 7363, or 7364.
(b) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 19. Section 7360.2 is added to the
Revenue and Taxation Code , to read:
7360.2. (a) Notwithstanding Section 7360, on and after the
effective date specified in Section 7360.5, a tax rate of one-half
the rate prescribed by Section 7360 shall be imposed on Category 2
fuel that is subject to the tax under Section 7362, 7363, or 7364,
unless the Category 2 fuel is an alcohol fuel of not more than 15
percent gasoline. For alcohol fuels of not more than 15 percent
gasoline, a tax rate of one-quarter of the rate prescribed by Section
7360 shall be imposed.
(b) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 20. Section 7360.3 is added to the
Revenue and Taxation Code , to read:
7360.3. (a) Notwithstanding Section 7360, an additional tax, at
the rate described in subdivision (b), shall be imposed on Category 3
fuel that is subject to the tax under Section 7362, 7363, or 7364.
(b) (1) On and after the effective date specified in Section
7360.5, the rate of tax imposed on Category 3 fuel pursuant to
subdivision (a) shall be the amount specified in Section 7360 plus
one hundredth of one cent ($0.1801) per each gallon of that fuel,
unless the Category 3 fuel is an alcohol fuel of not more than 15
percent gasoline. The tax rate imposed on Category 3 alcohol fuels of
not more than 15 percent gasoline shall be one-half of the rate
prescribed by Section 7360 plus one hundredth of one cent ($0.0901)
per each gallon of fuel. The tax rate shall remain in effect until
adjusted by the board, as specified in paragraph (2).
(2) On and after January 1 of the calendar year following the date
specified in Section 7360.5 and annually thereafter, the board shall
determine if the tax rate set forth in paragraph (1) should be
decreased or increased, if necessary, so that the total amount of
revenues derived from that tax rate is equal to the Clean Fuel
Incentive Balance for the immediately preceding fiscal year.
(c) In order to determine the tax rate, as described in paragraph
(2) of subdivision (b), the board shall do all of the following:
(1) Ascertain the reported taxable gallons of Category 1, Category
2, and Category 3 fuels for the previous fiscal year.
(2) Calculate the amount of the Clean Fuel Incentive Balance, as
specified in subdivision (a) of Section 7351.
(4) Determine if the tax rate described in subdivision (b) should
be decreased or increased, or remain the same.
(5) If appropriate, divide the Clean Fuel Incentive Balance amount
by the number of taxable Category 3 gallons of fuel reported in the
previous fiscal year and round that number to one hundredth of one
cent ($0.01), whichever is higher.
(d) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 21. Section 7360.4 is added to the
Revenue and Taxation Code , to read:
7360.4. The California Air Resources Board shall publish and
maintain a list of fuels that qualify as Category 1, Category 2, and
Category 3 fuels, as provided in Sections 7352, 7353, and 7354,
respectively.
SEC. 22. Section 7360.5 is added to the
Revenue and Taxation Code , to read:
7360.5. The tax rates for Category 1, Category 2, and Category 3
fuels shall not be effective until January 1 of the calendar year,
but not sooner than six months, following approval by the Office of
Administrative Law of the California Air Resources Board's
regulations relating to the LGGE and receipt by the board of the LGGE
list from the California Air Resources Board.
SEC. 23. Section 7363 of the Revenue
and Taxation Code is amended to read:
7363. The tax specified in Section 7360 is also imposed on all of
the following:
(a) The removal of motor vehicle fuel in this state from any
refinery if either of the following applies:
(1) The removal is by bulk transfer and the refiner or the owner
of the motor vehicle fuel immediately before the removal is not a
licensed supplier.
(2) The removal is at the refinery rack.
(b) The entry of motor vehicle fuel into this state for sale,
consumption, use, or warehousing if either of the following applies:
(1) The entry is by bulk transfer and the enterer is not a
licensed supplier.
(2) The entry is not by bulk transfer.
(c) The removal or sale of motor vehicle fuel in this state to an
unlicensed person unless there was a prior taxable removal, entry, or
sale of the motor vehicle fuel.
(d) The removal or sale of blended motor vehicle fuel in this
state by the blender thereof. The number of gallons of blended motor
vehicle fuel subject to tax is the difference between the total
number of gallons of blended motor vehicle fuel removed or sold and
the number of gallons of previously taxed motor vehicle fuel used to
produce the blended motor vehicle fuel.
(e) The removal or sale of alcohol or blends of gasoline and
alcohol in this state from an alcohol fuel production facility.
SEC. 24. Section 7369.1 is added to the
Revenue and Taxation Code , to read:
7369.1. Every alcohol fuel producer shall pay the tax on the
removal or sale of alcohol or blends of gasoline and alcohol from an
alcohol fuel production facility as provided in subdivision (e) of
Section 7363.
SEC. 25. Section 7373 of the Revenue
and Taxation Code is amended to read:
7373. (a) For the purpose of the proper administration of this
part and to prevent evasion of the tax, unless the contrary is
established, it shall be presumed that all motor vehicle fuel
received at a terminal in this state, imported into this state, or
refined and placed into storage for removal at a refinery or
alcohol fuel production facility in this state or blended motor
vehicle fuel blended or converted in this state and no longer in the
possession of the supplier has been removed or sold by the supplier.
(b) The presumption shall not apply if the supplier proves to the
satisfaction of the board that both:
(1) The supplier has exercised ordinary care in entrusting control
or possession of the motor vehicle fuel to another person.
(2) The person to whom the supplier has entrusted the control or
possession of the motor vehicle fuel as bailee, consignee, employee,
or agent, caused a removal or sale by the act of converting to that
person's own use the motor vehicle fuel so entrusted to that person
by the supplier.
(c) If the supplier proves to the satisfaction of the board, the
existence of both of the circumstances in paragraphs (1) and (2) of
subdivision (b), then the person who converted the motor vehicle fuel
to his or her own use, as well as any other person receiving that
motor vehicle fuel with the knowledge that it was so converted, shall
be liable for payment of the tax imposed upon that removal or sale,
and all of those persons shall be considered as suppliers for the
purpose of Chapter 5 (commencing with Section 7651) or Chapter 6
(commencing with Section 7851) of this part.
SEC . 26. Section 7374 is added to the
Revenue and Taxation Code , to read:
7374. (a) For the purpose of the proper administration of this
part and to prevent evasion of the tax, it shall be presumed, unless
the contrary is established, that all motor vehicle fuel received at
a terminal in this state, imported into this state, or refined and
placed into storage for removal at a refinery or alcohol fuel
production facility in this state, or blended motor vehicle fuel
blended or converted in this state, is Category 3 fuel.
(b) The presumption shall not apply if the supplier proves to the
satisfaction of the board that the motor vehicle fuel, or finished
component thereof, has been identified as a Category 1 or Category 2
fuel by the board pursuant to the fuel's LGGE, as identified and
listed by the California Air Resources Board and has been properly
labeled as provided for by the California Air Resources Board.
SEC. 27. Section 7401 of the Revenue
and Taxation Code is amended to read:
7401. (a) The provisions of this part requiring the payment of
motor vehicle fuel taxes do not apply to any of the following:
(1) Any entry or removal from a terminal or refinery of motor
vehicle fuel transferred in bulk to a refinery or terminal if the
persons involved (including the terminal operator) are licensed
suppliers.
(2) The removal of motor vehicle fuel, if all of the following
apply:
(A) The motor vehicle fuel is removed by railroad car from an
approved refinery and is received at an approved terminal.
(B) The refinery and the terminal are operated by the same
licensed supplier.
(C) The refinery is not served by pipeline (other than a pipeline
for the receipt of crude oil) or vessel.
(3) Motor vehicle fuel which, pursuant to the contract of sale, is
required to be shipped and is shipped to a point outside of this
state by a supplier by means of any of the following:
(A) Facilities operated by the supplier.
(B) Delivery by the supplier to a carrier, customs broker, or
forwarding agency, whether hired by the purchaser or not, for
shipment to the out-of-state point.
(C) Delivery by the supplier to any vessel clearing from a port of
this state for a port outside of this state and actually exported
from this state in the vessel.
(4) Motor vehicle fuel sold by credit card certified by the United
States Department of State to any consulate officer or consulate
employee of a foreign government who is not engaged in any private
occupation for gain within this state, who uses the motor vehicle
fuel in a motor vehicle that is registered with the United States
Department of State, and whose government has done either of the
following:
(A) Entered into a treaty with the United States providing for the
exemption of its representatives from national, state, and municipal
taxes.
(B) Granted a similar exemption to representatives of the United
States.
(5) Motor vehicle fuel sold to the United States armed forces for
use in ships or aircraft, or for use outside this state.
(6) Gasoline blendstocks removed from a pipeline or vessel, when
the gasoline blendstocks are received by a licensed industrial user.
(7) Any entry or removal from a terminal or refinery of gasoline
blendstocks that are received at an approved terminal or refinery if
the person otherwise liable for the tax is a licensed supplier.
(8) Any entry or removal from a terminal or refinery of gasoline
blendstocks not in connection with a sale if the person otherwise
liable for the tax is a licensed supplier and the person does not use
the gasoline blendstocks to produce finished gasoline.
(9) Any entry or removal from a terminal or refinery of gasoline
blendstocks in connection with a sale if the person otherwise liable
for the tax is a licensed supplier and at the time of sale, such
person has an unexpired exemption certificate described in Section
7402 from the buyer and has no reason to believe any information in
the certificate is false.
(10) If paragraph (8) or (9) applied to the removal or entry of
gasoline blendstocks, any resale made of gasoline blendstocks, when
the person has an unexpired exemption certificate described in
Section 7402 from the buyer and has no reason to believe any
information in the certificate is false.
(11) Motor vehicle fuel sold by a supplier to a train operator for
use in a motor vehicle fuel-powered train or for other off-highway
use and the supplier has on hand an exemption certificate described
in Section 7403 from the train operator.
(12) The removal from a terminal or alcohol fuel production
facility of, or the entry of, alcohol or blends of gasoline and
alcohol that is transferred by railcar to an approved terminal or
refinery in this state.
(13) The removal from a terminal or alcohol fuel production
facility of, or the entry of, alcohol or blends of gasoline and
alcohol that is transferred by railcar to an alcohol fuel storage
facility in this state, if all of the following apply:
(A) The operator of the alcohol fuel storage facility is
registered as a terminal operator.
(B) The alcohol or blends of gasoline and alcohol is owned by a
licensed supplier.
(C) The alcohol or blends of gasoline and alcohol is subsequently
removed by a licensed supplier from the alcohol fuel storage
facility.
(D) The alcohol or blends of gasoline and alcohol is transferred
by truck and trailer to an approved terminal or refinery in this
state.
(b) For purposes of this section:
(1) "Carrier" means a person or firm engaged in the business of
transporting for compensation property owned by other persons, and
includes both common and contract carriers.
(2) "Forwarding agent" means a person or firm engaged in the
business of preparing property for shipment or arranging for its
shipment.
SEC. 28. Section 7475 is added to the
Revenue and Taxation Code , to read:
7475. Every person, prior to becoming a terminal operator, shall
register with the board on forms prescribed by the board. A terminal
operator registration shall be issued only to a person who is a
terminal operator, as defined in Section 7340, and is licensed as a
supplier pursuant to Section 7451.
SEC. 29. Section 7652.9 is added to the
Revenue and Taxation Code , to read:
7652.9. Any person that is required to file a return under
Section 7651 or a report under Section 7652.5 or 7652.7 and who has
25 or more reportable transactions in a month shall file the return
or report using an electronic format authorized by the board.
SEC. 30. Section 7655.5 is added t o
the Revenue and Taxation Code , to read:
7655.5. (a) Any person that is required to file a return or
report pursuant to Section 7651, 7652.5, or 7652.7 shall pay a
penalty of one thousand dollars ($1,000) for each return or report,
if the person does any of the following:
(1) Fails to make a return or report under Section 7651, 7652.5,
or 7652.7 on or before the date prescribed therefor.
(2) Files the return or report in a format not authorized pursuant
to Section 7652.9.
(3) Fails to include all the information required to be shown on
the return or report.
(4) Misclassifies fuels in the incorrect fuel category (Category 1
fuel, Category 2 fuel, or Category 3 fuel).
(5) Knowingly includes incorrect information in the return or
report.
(b) The penalty imposed in subdivision (a) is in addition to any
tax, interest, or penalty due with the return filed under Section
7651.
(c) Where the board determines that failure to report information
under Section 7651, 7652.5, or 7652.7 was due to reasonable cause and
circumstances beyond the person's control, and the failure occurred
notwithstanding the exercise of ordinary care and the absence of
willful neglect, the person may be relieved of the penalty. A person
seeking to be relieved of the penalty shall file with the board a
statement under penalty of perjury setting forth the facts upon which
the request for relief is based.
SEC. 31. Section 7710 of the Revenue
and Taxation Code is amended to read:
7710. (a) Any supplier against whom a
determination is made by the board under Article 3 (commencing with
Section 7660) and Article 4 (commencing with Section 7670) may
petition for a redetermination within 30 days after
the date the notice thereof is given to
him. If a petition for redetermination is not filed within the 30-day
period, the determination becomes final at the expiration of the
period.
(b) No petition for redetermination of taxes determined under this
part shall be accepted or considered by the board if the petition is
founded upon the grounds that the California Air Resources Board has
improperly or erroneously listed a fuel pursuant to the LGGE. Any
appeal of an LGGE listing of a fuel shall be made to the California
Air Resources Board.
SEC. 32. Section 8102 of the Revenue
and Taxation Code is amended to read:
8102. (a) The claimant of a refund shall present to the
Controller a claim supported by the original invoice showing the
purchase or other evidence of each purchase that is satisfactory to
the Controller. The claim shall state the total amount of the fuel
purchased by the claimant and the manner and the equipment in which
the claimant has used the fuel. The claim shall identify the
fuel as a Category 1, 2, or 3 fuel and the gallons and the amount of
tax claimed for each category of fuel covered by the claim. The
claim shall state the total amount of motor vehicle fuel covered by
the claim and if the motor vehicle fuel was exported, a statement
that the claimant has proof of exportation. The claim shall state
that the amounts claimed have not been previously refunded to the
claimant and that there are no other claims outstanding for the
amounts included in the current claim for refund. The claim shall not
be under oath but shall contain, or be accompanied by, a written
declaration that it is made under the penalties of perjury. If no
original invoice was created, electronic invoicing shall be accepted
as reflected by a computerized facsimile when accompanied by an
original copy of the bill of lading or fuel manifest that can be
directly tied to the electronic invoice.
(b) Each claim for refund under this section shall be made on a
form prescribed by the Controller and shall be filed for a calendar
year, except for claims relating to exportation of fuel. If, at the
close of any of the first three quarters of the calendar year, more
than seven hundred fifty dollars ($750) is refundable under this
section with respect to any motor vehicle fuel used, sold, or
exported during that quarter or any prior quarter during the calendar
year, and for which no other claim has been filed, a claim may be
filed for the quarterly period. To facilitate the administration of
this section, the Controller may require the filing of claims for
refund for other than yearly periods. Export claims may be filed at
any time.
(c) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 33. Section 8102 is added to the
Revenue and Taxation Code , to read:
8102. (a) The claimant of a refund shall present to the
Controller a claim supported by the original invoice showing the
purchase or other evidence of each purchase that is satisfactory to
the Controller. The claim shall state the total amount of the fuel
purchased by the claimant and the manner and the equipment in which
the claimant has used the fuel. The claim shall state the total
amount of motor vehicle fuel covered by the claim and if the motor
vehicle fuel was exported, a statement that the claimant has proof of
exportation. The claim shall state that the amounts claimed have not
been previously refunded to the claimant and that there are no other
claims outstanding for the amounts included in the current claim for
refund. The claim shall not be under oath but shall contain, or be
accompanied by, a written declaration that it is made under the
penalties of perjury. If no original invoice was created, electronic
invoicing shall be accepted as reflected by a computerized facsimile
when accompanied by an original copy of the bill of lading or fuel
manifest that can be directly tied to the electronic invoice.
(b) Each claim for refund under this section shall be made on a
form prescribed by the Controller and shall be filed for a calendar
year, except for claims relating to exportation of fuel. If, at the
close of any of the first three quarters of the calendar year, more
than seven hundred fifty dollars ($750) is refundable under this
section with respect to any motor vehicle fuel used, sold, or
exported during that quarter or any prior quarter during the calendar
year, and for which no other claim has been filed, a claim may be
filed for the quarterly period. To facilitate the administration of
this section, the Controller may require the filing of claims for
refund for other than yearly periods. Export claims may be filed at
any time.
(c) This section shall become operative on January 1 of the fiscal
year following the fiscal year in which, as determined by the board,
the aggregate number of gallons of Category 1 and Category 2 fuels
for which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 34. Section 8129 of the Revenue
and Taxation Code is amended to read:
8129. (a) The claim shall be in writing
and , shall state the specific grounds
upon which it is founded , and shall identify the fuel as a
Catego ry 1, 2, or 3 fuel and the gallons and the amount
of tax claimed for each category of fuel covered by the claim .
(b) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 35. Section 8129 is added to the
Revenue and Taxation Code , to read:
8129. (a) The claim shall be in writing and shall state the
specific grounds upon which it is founded.
(b) This section shall become operative on January 1 of the fiscal
year following the fiscal year in which, as determined by the board,
the aggregate number of gallons of Category 1 and Category 2 fuels
for which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 36. Section 8651.8 of the Revenue
and Taxation Code is repealed.
8651.8. (a) Notwithstanding Section 8651, the excise tax imposed
upon ethanol or methanol containing not more than 15 percent gasoline
or diesel fuels shall be one-half the rate prescribed by Section
8651 for each gallon of fuel used.
(b) All references in this code to Section 8651 shall be deemed,
with respect to the rate imposed upon ethanol or methanol, to also
refer to this section.
SEC. 37. Section 8657 of the Revenue
and Taxation Code is repealed.
8657. (a) Notwithstanding any provision of the Alcoholic Beverage
Control Act (Division 9 (commencing with Section 23000) of the
Business and Professions Code) any alcohol produced for use in or as
a fuel to propel a motor vehicle shall be taxed as fuel under this
part and shall not be subject to taxes under the Alcoholic Beverage
Tax Law (Part 14 (commencing with Section 32001)).
(b) The state requirements for determining whether alcohol is
produced for use in or as a fuel to propel a motor vehicle and not
for use as an alcoholic beverage shall be the same as the
requirements of the Bureau of Alcohol, Tobacco and Firearms of the
United States Department of Treasury under federal law.
SEC. 38. Section 60003 of the Revenue
and Taxation Code is amended to read:
60003. "Terminal" means a diesel fuel storage and distribution
facility that is supplied by pipeline or vessel, and from which
diesel fuel may be removed at a rack. "Terminal" includes a
storage facility at a refinery or renewable diesel production
facility dedicated to storing diesel fuel if the fuel may be removed
at a rack. For purposes of this part, "terminal" also includes a
renewable diesel storage facility as defined in Section 60003.1.
SEC. 39. Section 600 03.1 is added to
the Revenue and Taxation Code , to read:
60003.1. "Renewable diesel storage facility" means a storage
facility, other than a terminal, that is supplied by railcar,
pipeline, or vessel and from which renewable diesel fuels may be
removed at a rack.
SEC. 40. Section 60004.1 is added to the
Revenue and Taxation Code , to read:
60004.1. "Renewable diesel production facility" means a facility,
other than a refinery, in which renewable diesel is produced or a
facility, in which renewable diesel is produced and blended with
petroleum-based diesel fuel.
SEC. 41. Section 60010 of the Revenue
and Taxation Code is amended to read:
60010. "Position holder" includes any person that holds the
inventory position in the diesel fuel, as reflected on the records of
the terminal operator. A person holds the inventory position in
diesel fuel when that person has a contractual agreement with the
terminal operator for the use of storage facilities and terminaling
services at a terminal with respect to the diesel fuel. "Position
holder" includes a terminal operator that owns diesel fuel in its
terminal. "Position holder" includes a person who holds an
inventory position in a renewable diesel storage facility.
SEC. 42. Section 60011.1 is added to the
Revenue and Taxation Code , to read:
60011.1. "Renewable diesel producer" means a person that produces
renewable diesel in this state at a renewable diesel production
facility.
SEC. 43. Section 60022 of the Revenue
and Taxation Code is amended to read:
60022. (a) "Diesel fuel" means any liquid that is commonly or
commercially known or sold as a fuel that is suitable for use in a
diesel-powered highway vehicle. A liquid meets this requirement if,
without further processing or blending, the liquid has practical and
commercial fitness for use in the engine of a diesel-powered highway
vehicle.
However, a liquid does not possess this practical and commercial
fitness solely by reason of its possible or rare use as a fuel in the
engine of a diesel-powered highway vehicle.
"Diesel
(b) "Diesel fuel" includes, but
is not limited to, petroleum-based diesel fuel, renewable
diesel, and blends thereof. "Diesel fuel" does not include
kerosene, gasoline motor vehicle fuel ,
liquified liquefied petroleum gas,
or natural gas in liquid or gaseous form , or
alcohol .
(b) This section shall become operative on January 1, 2007.
SEC. 44. Section 60022.1 is added to the
Revenue and Taxation Code , to read:
60022.1. "Petroleum-based diesel fuel" means diesel fuel produced
from crude oil or refined petroleum products.
SEC. 45. Section 60022.2 is added to the
Revenue and Taxation Code , to read:
60022.2. "Renewable diesel" means diesel fuel produced from
nonpetroleum, renewable feed stocks, including vegetable oils or
animal fats, which is suitable for use in diesel-powered highway
vehicles.
SEC. 46. Section 60033 of the Revenue
and Taxation Code is amended to read:
60033. "Supplier" includes any person who is any of the
following:
(a) Blender, as defined in Section 60012.
(b) Enterer, as defined in Section 60013.
(c) Position holder, as defined in Section 60010.
(d) Refiner, as defined in Section 60011.
(e) Terminal operator, as defined in Section 60009.
(f) Throughputter, as defined in Section 60035.
(g) Renewable diesel producer, as defined in Section 60011.1.
SEC. 47. Section 60049.2 is added to the
Revenue and Taxation Code , to read:
60049.2. (a) "Lifecycle Greenhouse Gas Emission" (LGGE) means the
lifecycle greenhouse gas emissions of gasoline, as identified and
listed by the California Air Resources Board.
(b) The California Air Resources Board shall identify and list the
LGGE for all fuel subject to tax under Section 60051, 60052, or
60058, and shall notify the board when the changes are made to that
list.
SEC. 48. Section 60049.4 is added to the
Revenue and Taxation Code , to read:
60049.4. (a) "Clean Fuel Incentive Balance" means the net
difference between the amount of revenue lost due to the tax rate
reductions allowed under Sections 60050.2 and 60050.3 for Category 1
and 2 fuels and the amount of incremental revenue realized as a
result of the rate applied to Category 3 fuel pursuant to Section
60050.4.
(b) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 49. Section 60049.5 is added to the
Revenue and Taxation Code , to read:
60049.5. "Category 1 fuel" means low-carbon diesel fuel, or a
finished component thereof, that creates 40 percent or less of the
LGGE, as identified and listed by the California Air Resources Board.
SEC. 50. Section 60049.6 is added to the
Revenue and Taxation Code , to read:
60049.6. "Category 2 fuel" means reduced-carbon diesel fuel, or a
finished component thereof, that creates over 40 percent but less
than 75 percent of the LGGE of an imported gallon of gasoline, as
identified and listed by the California Air Resources Board.
SEC. 51. Section 60049.7 is added to the
Revenue and Taxation Code , to read:
60049.7. "Category 3 fuel" means either of the following:
(a) High-carbon diesel fuel, or a finished component thereof, that
is neither Category 1 fuel, as defined in Section 60049.5, nor
Category 2 fuel, as defined in Section 60049.6.
(b) Any diesel fuel, or a finished component thereof, that is not
labeled.
SEC. 52. Section 60050.2 is added to the
Revenue and Taxation Code , to read:
60050.2. (a) Notwithstanding Section 60050, on and after the
effective date specified in Section 60050.6, a tax rate of zero cents
($0.00) shall be imposed on Category 1 fuel that is subject to the
tax under Section 60051, 60052, or 60058.
(b) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 53. Section 60050.3 is added to the
Revenue and Taxation Code , to read:
60050.3. (a) Notwithstanding Section 60050, on and after the
effective date specified in Section 60050.6, a tax rate of one-half
the rate prescribed by Section 60050 shall be imposed on Category 2
fuel that is subject to the tax under Sections 60051, 60052, and
60058.
(b) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 54. Section 60050.4 is added to the
Revenue and Taxation Code , to read:
60050.4. (a) Notwithstanding Section 60050, the tax rate as
described in subdivision (b) shall be imposed on Category 3 fuel that
is subject to the tax under Section 60051, 60052, or 60058.
(b) (1) On and after the effective date specified in Section
60050.6, the tax rate imposed on Category 3 fuel pursuant to
subdivision (a) shall be the amount specified in Section 60050 plus
one hundredth of one cent ($0.1801) per each gallon of Category 3
fuel subject to the tax imposed under Section 60051, 60052, or 60058.
This tax rate shall remain in effect until adjusted by the board, as
specified in paragraph (2).
(2) On and after January 1 of the calendar year following the date
specified in Section 60050.6 and annually thereafter, the board
shall determine if the tax rate set forth in paragraph (1) should be
decreased or increased, if necessary, so that the total amount of
revenues derived from that tax rate is equal to the Clean Fuel
Incentive Balance for the immediately preceding fiscal year.
(c) In order to determine the tax rate as described in paragraph
(2) of subdivision (b), the board shall do all of the following:
(1) Ascertain the reported taxable gallons of Category 1, Category
2, and Category 3 fuels in the previous fiscal year.
(2) Calculate the amount of the Clean Fuel Incentive Balance, as
specified in Section 60049.4.
(4) Determine if the tax rate described in subdivision (b) should
be decreased or increased or remain the same.
(5) If appropriate, divide the Clean Fuel Incentive Balance amount
by the number of taxable Category 3 gallons of fuel reported in the
previous fiscal year and round that number to one hundredth of one
cent ($0.01), whichever is higher.
(d) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 55. Section 60050.5 is added to the
Revenue and Taxation Code , to read:
60050.5. The California Air Resources Board shall publish and
maintain a list of fuels that qualify as Category 1, Category 2, and
Category 3 fuels, as provided in Section 60049.5, 60049.6, and
60049.7.
SEC. 56. Section 60050.6 is added to the
Revenue and Taxation Code , to read:
60050.6. The tax rates for Category 1, Category 2, and Category 3
fuels shall not be effective until January 1 of the calendar year,
but no sooner than six months, following approval by the Office of
Administrative Law of the California Air Resources Board's
regulations relating to the LGGE and receipt by the board of the LGGE
list from the California Air Resources Board.
SEC. 57. Section 60052 of the Revenue
and Taxation Code is amended to read:
60052. The tax specified in Section 60050 is also imposed on all
of the following:
(a) The removal of diesel fuel in this state from any refinery if
either of the following applies:
(1) The removal is by bulk transfer and the refiner or the owner
of the diesel fuel immediately before the removal is not a diesel
fuel registrant.
(2) The removal is at the refinery rack.
(b) The entry of diesel fuel into this state for sale,
consumption, use, or warehousing if either of the following applies:
(1) The entry is by bulk transfer and the enterer is not a diesel
fuel registrant.
(2) The entry is not by bulk transfer.
(c) The removal or sale of diesel fuel in this state to an
unregistered person unless there was a prior taxable removal, entry,
or sale of the diesel fuel.
(d) The removal or sale of blended diesel fuel in this state by
the blender thereof. The number of gallons of blended diesel fuel
subject to tax is the difference between the total number of gallons
of blended diesel fuel removed or sold and the number of gallons of
previously taxed diesel fuel used to produce the blended diesel fuel.
(e) The removal or sale of renewable diesel or blends of renewable
diesel and petroleum-based diesel fuel in this state from a
renewable diesel production facility.
SEC. 58. Section 60053.1 is added to the
Revenue and Taxation Code , to read:
60053.1. Every renewable diesel producer shall pay the tax on the
removal or sale of renewable diesel or blends of renewable diesel
and petroleum-based diesel fuel from a renewable diesel production
facility as provided in subdivision (e) of Section 60052.
SEC. 59. Section 60064 of the Revenue
and Taxation Code is amended to read:
60064. (a) For the purpose of the proper administration of this
part and to prevent evasion of the tax, unless the contrary is
established, it shall be presumed that all diesel fuel received at a
terminal in this state, imported into this state, or refined and
placed into storage for removal at a refinery or renewable
diesel production facility in this state or blended diesel fuel
blended or converted in this state and no longer in the possession
of the supplier has been removed or sold by the supplier.
(b) The presumption shall not apply if the supplier proves to the
satisfaction of the board that both:
(1) The supplier has exercised ordinary care in entrusting control
or possession of the diesel fuel to another person.
(2) The person to whom the supplier has entrusted the control or
possession of the diesel fuel as bailee, consignee, employee, or
agent, caused a removal or sale by the act of converting to that
person's own use the diesel fuel so entrusted to that person by the
supplier.
(c) If the supplier proves to the satisfaction of the board, the
existence of both of the circumstances in paragraphs (1) and (2) of
subdivision (b), then the person who converted the diesel fuel to his
or her own use, as well as any other person receiving that diesel
fuel with the knowledge that it was so converted, shall be liable for
payment of the tax imposed upon the removal or sale, and all those
persons shall be considered as suppliers for the purpose of Chapter 6
(commencing with Section 60201) or Chapter 7 (commencing with
Section 60401) of this part.
SEC. 60. Section 60065 is added to the
Revenue and Taxation Code , to read:
60065. (a) For purpose of the proper administration of this part
and to prevent evasion of the tax, it shall be presumed, unless the
contrary is established, that all diesel fuel received at a terminal
in this state, imported into this state, or refined and placed into
storage for removal at a refinery or renewable diesel production
facility in this state, or blended diesel fuel blended or converted
in this state, is Category 3 fuel.
(b) The presumption shall not apply if the supplier proves to the
satisfaction of the board that the diesel fuel, or finished component
thereof, has been identified as a Category 1 or Category 2 fuel by
the board pursuant to the fuel's LGGE, as identified and listed by
the California Air Resources Board and has been properly labeled as
provided for by the California Air Resources Board.
SEC. 61. Section 60100 of the Revenue
and Taxation Code is amended to read:
60100. (a) The provisions of this part requiring the payment of
taxes do not apply to any of the following:
(1) The removal from a terminal or refinery of, or the entry or
sale of, any diesel fuel if all of the following apply:
(A) The person otherwise liable for tax is a diesel fuel
registrant.
(B) In the case of a removal from a terminal, the terminal is an
approved terminal.
(C) The diesel fuel satisfies the dyeing and marking requirements
of Section 60101.
(2) Any entry or removal from a terminal or refinery of taxable
diesel fuel transferred in bulk to a refinery or terminal if the
persons involved (including the terminal operator) are registered.
(3) The removal of diesel fuel if all of the following apply:
(A) The diesel fuel is removed by railroad car from an approved
refinery and is received at an approved terminal.
(B) The refinery and the terminal are operated by the same diesel
fuel registrant.
(C) The refinery is not served by pipeline (other than a pipeline
for the receipt of crude oil) or vessel.
(4) Diesel fuel which, pursuant to the contract of sale, is
required to be shipped and is shipped to a point outside of this
state by a supplier by
means of any of the following:
(A) Facilities operated by the supplier.
(B) Delivery by the supplier to a carrier, customs broker, or
forwarding agent, whether hired by the purchaser or not, for shipment
to the out-of-state point.
(C) Delivery by the supplier to any vessel clearing from a port of
this state for a port outside of this state and actually exported
from this state in the vessel.
(5) Backup tax does not apply to delivery of diesel fuel into the
fuel tank of a diesel-powered highway vehicle as provided in Section
60058 for any of the following:
(A) Use on a farm for farming purposes.
(B) Use in an exempt bus operation.
(C) Use in a diesel-powered highway vehicle that is operated off
the highway.
(D) Use in a diesel-powered highway vehicle that is owned and
operated by a government entity.
(E) Use by the United States and its agencies and
instrumentalities.
(6) Diesel fuel sold by credit card certified by the United States
Department of State to any consulate officer or consulate employee
of a foreign government who is not engaged in any private occupation
for gain within this state, who uses the diesel fuel in a motor
vehicle which is registered with the United States Department of
State, and whose government has done either of the following:
(A) Entered into a treaty with the United States providing for the
exemption of its representatives from national, state, and municipal
taxes.
(B) Granted a similar exemption to representatives of the United
States.
(7) Diesel fuel sold by a supplier to a train operator for use in
a diesel-powered train or for other off-highway use and the supplier
has on hand an exemption certificate from the train operator.
(8) Diesel fuel sold by a supplier to the United States and its
agencies and instrumentalities.
(9) The removal from a terminal or renewable diesel production
facility of, or the entry of, renewable diesel or blends of renewable
diesel and petroleum-based diesel fuel that is transferred by
railcar to an approved terminal or refinery in this state.
(10) The removal from a terminal or renewable diesel production
facility of, or entry of, renewable diesel or blends of renewable
diesel and petroleum-based diesel fuel that is transferred by railcar
to a renewable diesel storage facility in this state, if all of the
following apply:
(A) The operator of the renewable diesel storage facility is
registered as a terminal operator.
(B) The renewable diesel or blends of renewable diesel and
petroleum-based diesel fuel is owned by a diesel fuel registrant.
(C) The renewable diesel or blends of renewable diesel and
petroleum-based diesel fuel is subsequently removed by a diesel fuel
registrant from the renewable diesel storage facility.
(D) The renewable diesel or blends of renewable diesel and
petroleum-based diesel fuel is transferred by truck or trailer to an
approved terminal or refinery in this state.
(b) For purposes of this section:
(1) "Carrier" means a person or firm engaged in the business of
transporting for compensation property owned by other persons, and
includes both common and contract carriers.
(2) "Forwarding agent" means a person or firm engaged in the
business of preparing property for shipment or arranging for its
shipment.
SEC. 62. Section 60115 of the Revenue
and Taxation Code is amended to read:
60115. For the privilege of using diesel fuel in a qualified
motor vehicle in this state by interstate users, there is hereby
imposed upon any interstate user for each gallon of diesel fuel used
in this state, a tax consisting of the following two components:
(a) A tax at the rate imposed by Section 60050.
(b) A tax at the rate prescribed by Section 60116.
(c) On and after the effective date specified in Section 60050.6,
the tax will consist of the following two components:
(1) The tax on the fuel category imposed by Section 60050.2,
60050.3, or 60050.4.
(2) A tax at the rate prescribed by Section 60116.
(d) (1) For purpose of the proper administration of this part and
to prevent evasion of the tax, it shall be presumed, unless the
contrary is established, that all diesel fuel used by an interstate
user in this state is Category 3 fuel.
(2) The presumption shall not apply if the interstate user proves
to the satisfaction of the board that the diesel fuel, or finished
component thereof, is identified as a Category 1 or Category 2 fuel
by the board pursuant to the fuel's LGGE, as identified and listed by
the California Air Resources Board and has been properly labeled, as
provided by the California Air Resources Board.
(e) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 63. Section 60115 is added to the
Revenue and Taxation Code , to read:
60115. (a) For the privilege of using diesel fuel in a qualified
motor vehicle in this state by interstate users, there is hereby
imposed upon any interstate user for each gallon of diesel fuel used
in this state, a tax consisting of the following two components:
(1) A tax at the rate imposed by Section 60050.
(2) A tax at the rate prescribed by Section 60116.
(b) This section shall become operative on January 1 of the fiscal
year following the fiscal year in which, as determined by the board,
the aggregate number of gallons of Category 1 and Category 2 fuels
for which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 64. Section 60136 is added to the
Revenue and Taxation Code , to read:
60136. Every person, before becoming a terminal operator, shall
register with the board on forms prescribed by the board. A terminal
operator registration shall be issued only to a person who is a
terminal operator, as defined in Section 60009, and is licensed as a
supplier pursuant to Section 60131.
SEC. 65. Section 60203 is added to the
Revenue and Taxation Code , to read:
60203. Any person that is required to file a tax return, report,
or claim form under this part and who has 25 or more reportable
transactions to report with the filing shall file using an electronic
format authorized by the board.
SEC. 66. Section 60207.5 is added to the
Revenue and Taxation Code , to read:
60207.5. (a) Any person that is required to file a return or
report pursuant to Section 60201, 60204, or 60204.5 shall pay a
penalty of one thousand dollars ($1,000) for each return or report if
the person does any of the following:
(1) Fails to make a return or report under Section 60201, 60204,
or 60204.5 on or before the date prescribed therefor.
(2) Files the return or report in a format not authorized pursuant
to Section 60203.
(3) Fails to include all the information required to be shown on
the return or report.
(4) Misclassifies fuels in the incorrect fuel category (Category 1
fuel, Category 2 fuel, or Category 3 fuel).
(5) Knowingly includes incorrect information in the return or
report.
(b) The penalty imposed in subdivision (a) is in addition to any
tax, interest, or penalty due with the return filed under Section
60201.
(c) Where the board determines that failure to report information
under Section 60201, 60204, or 60204.5 was due to reasonable cause
and circumstances beyond the person's control, and the failure
occurred notwithstanding the exercise of ordinary care and the
absence of willful neglect, the person may be relieved of the
penalty. A person seeking to be relieved of the penalty shall file
with the board a statement under penalty of perjury setting forth the
facts upon which the request for relief is based.
SEC. 67. Section 60350 of the Revenue
and Taxation Code is amended to read:
60350. (a) Any person against whom a
determination is made by the board under Article 2 (commencing with
Section 60301) and Article 3 (commencing with Section 60310) may
petition for a redetermination within 30 days after the date the
notice thereof is given to him or her. If a petition for
redetermination is not filed within the 30-day period, the
determination becomes final at the expiration of the period.
(b) No petition for redetermination of taxes determined under this
part shall be accepted or considered by the board if the petition is
founded upon the grounds that the California Air Resources Board has
improperly or erroneously listed a fuel pursuant to the LGGE. Any
appeal of a LGGE listing of a fuel shall be made to the California
Air Resources Board.
SEC. 68. Section 60501 of the Revenue
and Taxation Code is amended to read:
60501. Persons who have paid a tax for diesel fuel lost, sold, or
removed as provided in paragraph (4) of subdivision (a), or used in
a nontaxable use, other than on a farm for farming purposes or in an
exempt bus operation, shall, except as otherwise provided in this
part, be reimbursed and repaid the amount of the tax.
(a) A claim for refund with respect to diesel fuel is allowed
under this section only if all of the following apply:
(1) Tax was imposed on the diesel fuel to which the claim relates.
(2) The claimant bought or produced the diesel fuel and did not
sell or resell it in this state except as provided in paragraph (4)
of subdivision (a).
(3) The claimant has filed a timely claim for refund that contains
the information required under subdivision (b) and the claim is
supported by the original invoice or original invoice facsimile
retained in an alternative storage media showing the purchase. If no
original invoice was created, electronic invoicing shall be accepted
as reflected by a computerized facsimile when accompanied by an
original copy of the bill of lading or fuel manifest that can be
directly tied to the electronic invoice.
(4) The diesel fuel was any of the following:
(A) Used for purposes other than operating motor vehicles upon the
public highways of the state.
(B) Exported for use outside of this state. Diesel fuel carried
from this state in the fuel tank of a motor vehicle is not deemed to
be exported from this state unless the diesel fuel becomes subject to
tax as an import under the laws of the destination state.
(C) Used in any construction equipment that is exempt from vehicle
registration pursuant to the Vehicle Code, while operated within the
confines and limits of a construction project.
(D) Used in the operation of a motor vehicle on any highway that
is under the jurisdiction of the United States Department of
Agriculture and with respect to the use of the highway the claimant
pays, or contributes to, the cost of construction or maintenance
thereof pursuant to an agreement with, or permission of, the United
States Department of Agriculture.
(E) Used in any motor vehicle owned by any county, city and
county, city, district, or other political subdivision or public
agency when operated by it over any highway constructed and
maintained by the United States or any department or agency thereof
within a military reservation in this state. If the motor vehicle is
operated both over the highway and over a public highway outside the
military reservation in a continuous trip the tax shall not be
refunded as to that portion of the diesel fuel used to operate the
vehicle over the public highway outside the military reservation.
Nothing contained in this section shall be construed as a refund
of the tax for the use of diesel fuel in any motor vehicle operated
upon a public highway within a military reservation, which highway is
constructed or maintained by this state or any political subdivision
thereof.
As used in this section, "military reservation" includes any
establishment of the United States Government or any agency thereof
used by the armed forces of the United States for military, air, or
naval operations, including research projects.
(F) Sold by a supplier to any consulate officer or consulate
employee under circumstances which would have entitled the supplier
to an exemption under paragraph (6) of subdivision (a) of Section
60100 if the supplier had sold the diesel fuel directly to the
consulate officer or consulate employee.
(G) Lost in the ordinary course of handling, transportation, or
storage.
(H) Sold by a person to the United States and its agencies and
instrumentalities under circumstances that would have entitled that
person to an exemption from the payment of diesel fuel tax under
Section 60100 had that person been the supplier of this diesel fuel.
(I) Sold by a person to a train operator for use in a
diesel-powered train or for other off-highway use under circumstances
that would have entitled that person to an exemption from the
payment of diesel fuel tax under Section 60100 had that person been
the supplier of this diesel fuel.
(J) Removed from an approved terminal at the terminal rack, but
only to the extent that the supplier can show that the tax on the
same amount of diesel fuel has been paid more than one time by the
same supplier.
(b) Each claim for refund under this section shall contain the
following information with respect to all of the diesel fuel covered
by the claim:
(1) The name, address, telephone number, and permit number of the
person that sold the diesel fuel to the claimant and the date of the
purchase.
(2) A statement by the claimant that the diesel fuel covered by
the claim did not contain visible evidence of dye.
(3) A statement, which may appear on the invoice, original invoice
facsimile, or similar document, by the person that sold the diesel
fuel to the claimant that the diesel fuel sold did not contain
visible evidence of dye.
(4) The total amount of diesel fuel covered by the claim.
(5) The use made of the diesel fuel covered by the claim described
by reference to specific categories listed in paragraph (4) of
subdivision (a).
(6) If the diesel fuel covered by the claim was exported, a
statement that the claimant has the proof of exportation.
(7) Information identifying the fuel as a Category 1, Category 2,
or Category 3 and the gallons and the amount of tax claimed for each
category of fuel covered by the claim.
(c) Each claim for refund under this section shall be made
on in a form prescribed by the board
and shall be filed for a calendar year. If, at the close of any of
the first three quarters of the calendar year, more than seven
hundred fifty dollars ($750) is refundable under this section with
respect to diesel fuel used or exported during that quarter or any
prior quarter during the calendar year, and for which no other claim
has been filed, a claim may be filed for the quarterly period. To
facilitate the administration of this section, the board may require
the filing of claims for refund for other than yearly periods.
(d) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 69. Section 60501 is added to the
Revenue and Taxation Code , to read:
60501. Persons who have paid a tax for diesel fuel lost, sold, or
removed as provided in paragraph (4) of subdivision (a), or used in
a nontaxable use, other than on a farm for farming purposes or in an
exempt bus operation, shall, except as otherwise provided in this
part, be reimbursed and repaid the amount of the tax.
(a) A claim for refund with respect to diesel fuel is allowed
under this section only if all of the following apply:
(1) Tax was imposed on the diesel fuel to which the claim relates.
(2) The claimant bought or produced the diesel fuel and did not
sell or resell it in this state except as provided in paragraph (4)
of subdivision (a).
(3) The claimant has filed a timely claim for refund that contains
the information required under subdivision (b) and the claim is
supported by the original invoice or original invoice facsimile
retained in an alternative storage media showing the purchase. If no
original invoice was created, electronic invoicing shall be accepted
as reflected by a computerized facsimile when accompanied by an
original copy of the bill of lading or fuel manifest that can be
directly tied to the electronic invoice.
(4) The diesel fuel was any of the following:
(A) Used for purposes other than operating motor vehicles upon the
public highways of the state.
(B) Exported for use outside of this state. Diesel fuel carried
from this state in the fuel tank of a motor vehicle is not deemed to
be exported from this state unless the diesel fuel becomes subject to
tax as an import under the laws of the destination state.
(C) Used in any construction equipment that is exempt from vehicle
registration pursuant to the Vehicle Code, while operated within the
confines and limits of a construction project.
(D) Used in the operation of a motor vehicle on any highway that
is under the jurisdiction of the United States Department of
Agriculture and with respect to the use of the highway the claimant
pays, or contributes to, the cost of construction or maintenance
thereof pursuant to an agreement with, or permission of, the United
States Department of Agriculture.
(E) Used in any motor vehicle owned by any county, city and
county, city, district, or other political subdivision or public
agency when operated by it over any highway constructed and
maintained by the United States or any department or agency thereof
within a military reservation in this state. If the motor vehicle is
operated both over the highway and over a public highway outside the
military reservation in a continuous trip the tax shall not be
refunded as to that portion of the diesel fuel used to operate the
vehicle over the public highway outside the military reservation.
Nothing contained in this section shall be construed as a refund
of the tax for the use of diesel fuel in any motor vehicle operated
upon a public highway within a military reservation, which highway is
constructed or maintained by this state or any political subdivision
thereof.
As used in this section, "military reservation" includes any
establishment of the United States Government or any agency thereof
used by the Armed Forces of the United States for military, air, or
naval operations, including research projects.
(F) Sold by a supplier to any consulate officer or consulate
employee under circumstances which would have entitled the supplier
to an exemption under paragraph (6) of subdivision (a) of Section
60100 if the supplier had sold the diesel fuel directly to the
consulate officer or consulate employee.
(G) Lost in the ordinary course of handling, transportation, or
storage.
(H) Sold by a person to the United States and its agencies and
instrumentalities under circumstances that would have entitled that
person to an exemption from the payment of the diesel fuel tax under
Section 60100 had that person been the supplier of the diesel fuel.
(I) Sold by a person to a train operator for use in a
diesel-powered train or for other off-highway use under circumstances
that would have entitled that person to an exemption from the
payment of the diesel fuel tax under Section 60100 had that person
been the supplier of the diesel fuel.
(J) Removed from an approved terminal at the terminal rack, but
only to the extent that the supplier can show that the tax on the
same amount of diesel fuel has been paid more than one time by the
same supplier.
(b) Each claim for refund under this section shall contain the
following information with respect to all of the diesel fuel covered
by the claim:
(1) The name, address, telephone number, and permit number of the
person that sold the diesel fuel to the claimant and the date of the
purchase.
(2) A statement by the claimant that the diesel fuel covered by
the claim did not contain visible evidence of dye.
(3) A statement, which may appear on the invoice, original invoice
facsimile, or similar document, by the person that sold the diesel
fuel to the claimant that the diesel fuel sold did not contain
visible evidence of dye.
(4) The total amount of diesel fuel covered by the claim.
(5) The use made of the diesel fuel covered by the claim described
by reference to specific categories listed in paragraph (4) of
subdivision (a).
(6) If the diesel fuel covered by the claim was exported, a
statement that the claimant has the proof of exportation.
(c) Each claim for refund under this section shall be made in a
form prescribed by the board and shall be filed for a calendar year.
If, at the close of any of the first three quarters of the calendar
year, more than seven hundred fifty dollars ($750) is refundable
under this section with respect to diesel fuel used or exported
during that quarter or any prior quarter during the calendar year,
and for which no other claim has been filed, a claim may be filed for
the quarterly period. To facilitate the administration of this
section, the board may require the filing of claims for refund for
other than yearly periods.
(d) This section shall become operative on January 1 of the fiscal
year following the fiscal year in which, as determined by the board,
the aggregate number of gallons of Category 1 and Category 2 fuels
for which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 70. Section 60502 of the Revenue
and Taxation Code is amended to read:
60502. (a) Any ultimate vendor who has paid a tax on diesel fuel
sold to an ultimate purchaser for use on a farm for farming purposes
or use in an exempt bus operation shall, except as otherwise provided
in this part, be reimbursed and repaid the amount of the tax.
(b) A claim for refund with respect to diesel fuel is allowed
under this section only if all of the following apply:
(1) Tax was imposed on the diesel fuel to which the claim relates.
(2) The claimant sold the diesel fuel to the ultimate purchaser
for use on a farm for farming purposes or for use in an exempt bus
operation.
(3) The claimant is a registered ultimate vendor.
(4) The claimant has filed a timely claim for refund that contains
the information required under subdivision (c) and the claim is
supported by the original invoice showing the purchase. If no
original invoice was created, electronic invoicing shall be accepted
as reflected by a computerized facsimile when accompanied by an
original copy of the bill of lading or fuel manifest that can be
directly tied to the electronic invoice.
(c) Each claim for refund under this section shall contain the
following information with respect to all the diesel fuel covered by
the claim:
(1) The claimant's permit number.
(2) The name, address, telephone number, and permit number of each
person that sold the diesel fuel to the claimant and the date of the
purchase.
(3) The name, address, telephone number, and federal taxpayer
identification number of each farmer or the permit number of each
exempt bus operator that bought the diesel fuel from the claimant and
the number of gallons that the claimant sold to each.
(4) A statement that the diesel fuel covered by the claim did not
contain visible evidence of dye.
(5) The total amount of diesel fuel covered by the claim.
(6) A statement that the claimant has not included the amount of
the tax in its sales price of the diesel fuel and has not collected
the amount of tax from its buyer.
(7) A statement that the claimant has in its possession an
unexpired exemption certificate described in Section 60503 and the
claimant has no reason to believe any information in the certificate
is false.
(8) A statement that the amounts claimed have not been previously
refunded to the claimant and that there are no other claims
outstanding for the amounts included in the current claim.
(9) Information identifying the fuel as a Category 1, Category 2,
or Category 3 fuel, and the gallons and the amount of tax claimed for
each category of fuel
covered by the claim.
(d) Each claim for refund under this section shall be made
on in a form prescribed by the board
and shall be for an amount of not less than two hundred dollars
($200) and for a period of not less than one week.
(e) This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 71. Section 60502 is added to the
Revenue and Taxation Code , to read:
60502. (a) Any ultimate vendor who has paid a tax on diesel fuel
sold to an ultimate purchaser for use on a farm for farming purposes
or use in an exempt bus operation shall, except as otherwise provided
in this part, be reimbursed and repaid the amount of the tax.
(b) A claim for refund with respect to diesel fuel is allowed
under this section only if all of the following apply:
(1) Tax was imposed on the diesel fuel to which the claim relates.
(2) The claimant sold the diesel fuel to the ultimate purchaser
for use on a farm for farming purposes or for use in an exempt bus
operation.
(3) The claimant is a registered ultimate vendor.
(4) The claimant has filed a timely claim for refund that contains
the information required under subdivision (c) and the claim is
supported by the original invoice showing the purchase. If no
original invoice was created, electronic invoicing shall be accepted
as reflected by a computerized facsimile when accompanied by an
original copy of the bill of lading or fuel manifest that can be
directly tied to the electronic invoice.
(c) Each claim for refund under this section shall contain the
following information with respect to all the diesel fuel covered by
the claim:
(1) The claimant's permit number.
(2) The name, address, telephone number, and permit number of each
person that sold the diesel fuel to the claimant and the date of the
purchase.
(3) The name, address, telephone number, and federal taxpayer
identification number of each farmer or the permit number of each
exempt bus operator that bought the diesel fuel from the claimant and
the number of gallons that the claimant sold to each.
(4) A statement that the diesel fuel covered by the claim did not
contain visible evidence of dye.
(5) The total amount of diesel fuel covered by the claim.
(6) A statement that the claimant has not included the amount of
the tax in its sales price of the diesel fuel and has not collected
the amount of tax from its buyer.
(7) A statement that the claimant has in its possession an
unexpired exemption certificate described in Section 60503 and the
claimant has no reason to believe any information in the certificate
is false.
(8) A statement that the amounts claimed have not been previously
refunded to the claimant and that there are no other claims
outstanding for the amounts included in the current claim.
(d) Each claim for refund under this section shall be made in a
form prescribed by the board and shall be for an amount of not less
than two hundred dollars ($200) and for a period of not less than one
week.
(e) This section shall become operative on January 1 of the fiscal
year following the fiscal year in which, as determined by the board,
the aggregate number of gallons of Category 1 and Category 2 fuels
for which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 72. Section 60523 of the Revenue
and Taxation Code is amended to read:
60523. The claim shall be in writing , and
shall state the specific grounds upon which it is founded
, and shall identify the fuel as a Category 1, Category 2, or
Category 3 fuel and the number of gallons and
the amount of tax claimed for each
category of fuel covered by the claim .
This section shall be repealed on January 1 of the fiscal year
following the fiscal year in which, as determined by the board, the
aggregate number of gallons of Category 1 and Category 2 fuels for
which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 73. Section 60523 is added to the
Revenue and Taxation Code , to read:
60523. (a) The claim shall be in writing and shall state the
specific grounds upon which it is founded.
(b) This section shall become operative on January 1 of the fiscal
year following the fiscal year in which, as determined by the board,
the aggregate number of gallons of Category 1 and Category 2 fuels
for which the tax incentives have been claimed pursuant to Sections
7360.1, 7360.2, 60050.2, and 60050.3 is equal to or exceeds one
billion gallons.
SEC. 74. The State Board of Equalization shall
provide written notification to the Legislature, the Director of
Finance, and the Legislative Counsel if, and when, the board
determines that the aggregate number of gallons of Category 1 fuels,
as defined in Sections 7352 and 60049.5 of the Revenue and Taxation
Code, and Category 2 fuels, as defined in Sections 7353 and 60049.6
of the Revenue and Taxation Code, for which the tax incentives have
been claimed pursuant to Sections 7360.1, 7360.2, 60050.2, and
60050.3 of the Revenue and Taxation Code, is equal to or exceeds one
billion gallons.
SEC. 75. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.
SECTION 1. Section 8651.1 is added to the
Revenue and Taxation Code, to read:
8651.1. (a) Notwithstanding any other law, on and after January
1, 2008, this chapter shall not apply to the use of Category 1 fuel.
(b) For purposes of this section, "Category 1 fuel" means fuel
that contains 33 percent or less of the grams carbon dioxide
equivalent per mile traveled of gasoline, as defined by the Low
Carbon Fuel Standard, that will be established and adopted by the
California Air Resources Board.
SEC. 2. Section 8651.2 is added to the Revenue
and Taxation Code, to read:
8651.2. (a) Notwithstanding Section 8651, on and after January 1,
2008, an excise tax imposed on the use of Category 2 fuel, as
defined in subdivision (b), shall be one-half the rate prescribed by
Section 8651 for each gallon of that fuel used.
(b) For purposes of this section, "Category 2 fuel" means fuel
that contains between 33 percent and 66 percent of the grams carbon
dioxide equivalent per mile traveled of gasoline, as defined by the
Low Carbon Fuel Standard, that will be established and adopted by the
California Air Resources Board.
(c) 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 exempt under this section.
(d) All references in this code to Section 8651 shall be deemed,
with respect to the rate imposed upon Category 2 fuel, to also refer
to this section.
SEC. 3. Section 8651.3 is added to the Revenue
and Taxation Code, to read:
8651.3. (a) In addition to the tax imposed by Section 8651, or
any other applicable provision of this chapter, a tax is hereby
imposed on the use of Category 3 fuel at a rate determined as
prescribed in subdivision (c).
(b) For purposes of this section, "Category 3 fuel" means fuel
that is neither Category 1 fuel, as defined in subdivision (b) of
Section 8651.1, nor Category 2 fuel, as defined in subdivision (b) of
Section 8651.2.
(c) (1) On and after January 1, 2008, but before January 1, 2009,
the tax rate imposed on the use of Category 3 fuel pursuant to
subdivision (a) shall be twenty-seven cents ($0.27) per each gallon
of that fuel used.
(2) On and after January 1, 2009, the rate set forth in paragraph
(1) shall be increased or decreased by the State Board of
Equalization, as necessary, so that the total amount of revenues
derived from that rate, as estimated on the basis of the revenues
derived from the tax rate imposed on Category 3 fuel during the
immediately preceding year, does not exceed the amount of revenue
loss that resulted during the same year from the tax exemptions
allowed under Sections 8651 and 8651.2 for Category 1 and 2 fuel.
(d) If the federal fuel tax is reduced below the rate of fifteen
cents ($0.15) 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
this section, on and after the date of the reduction, shall be
increased by an amount so that the combined state and federal tax
rate per gallon equals thirty-three cents ($0.33).
(e) The State Board of Equalization, in consultation with the
California Energy Commission, shall prescribe rules and regulations
to implement this section.
SEC. 4. Section 60050.2 is added to the Revenue
and Taxation Code, to read:
60050.2. (a) Notwithstanding any other law, on and after January
1, 2008, this part shall not apply to the use of Category 1 fuel.
(b) For purposes of this section, "Category 1 fuel" means diesel
fuel that contains 33 percent or less of the grams carbon dioxide
equivalent per mile traveled of gasoline, as defined by the Low
Carbon Fuel Standard, that will be established and adopted by the
California Air Resources Board.
SEC. 5. Section 60050.3 is added to the Revenue
and Taxation Code, to read:
60050.3. (a) Notwithstanding Section 60050, on and after January
1, 2008, an excise tax imposed on the use of Category 2 fuel, as
defined in subdivision (b), shall be one-half the rate prescribed by
Section 60050 for each gallon of diesel fuel used.
(b) For purposes of this section, "Category 2 fuel" means diesel
fuel that contains between 33 percent and 66 percent of the grams
carbon dioxide equivalent per mile traveled of gasoline, as defined
by the Low Carbon Fuel Standard, that will be established and adopted
by the California Air Resources Board.
(c) 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 exempt under this section.
(d) All references in this code to Section 60050 shall be deemed,
with respect to the rate imposed upon Category 2 fuel, to also refer
to this section.
SEC. 6. Section 60050.4 is added to the Revenue
and Taxation Code, to read:
60050.4. (a) In addition to the tax imposed by Section 60050, or
any other applicable provision of this chapter, a tax is hereby
imposed on the use of Category 3 fuel at a rate determined as
prescribed in subdivision (c).
(b) For purposes of this section, "Category 3 fuel" means diesel
fuel that is neither Category 1 fuel, as defined in subdivision (b)
of Section 60050.2, nor Category 2 fuel, as defined in subdivision
(b) of Section 60050.3.
(c) (1) On and after January 1, 2008, but before January 1, 2009,
the tax rate imposed on the use of Category 3 fuel pursuant to
subdivision (a) shall be twenty-seven cents ($0.27) per each gallon
of that fuel used.
(2) On and after January 1, 2009, the rate set forth in paragraph
(1) shall be increased or decreased by the State Board of
Equalization, as necessary, so that the total amount of revenues
derived from that rate, as estimated on the basis of the revenues
derived from the tax rate imposed on Category 3 fuel during the
immediately preceding year, does not exceed the amount of revenue
loss that resulted during the same year from the tax exemptions
allowed under Sections 60050.2 and 60050.3 for Category 1 and 2 fuel.
(d) If the federal fuel tax is reduced below the rate of fifteen
cents ($0.15) 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
this section, on and after the date of the reduction, shall be
increased by an amount so that the combined state and federal tax
rate per gallon equals thirty-three cents ($0.33).
(e) The State Board of Equalization, in consultation with the
California Energy Commission, shall prescribe rules and regulations
to implement the provisions of this section.
SEC. 7. The California Energy Commission shall
oversee the tax incentive program established by Sections 1, 2, 3, 4,
5, and 6 of this act, and shall annually report to the Legislature
regarding the program. The report shall be posted on the commission's
Web site and shall include all of the following information:
(a) The effect of the tax incentive program on the consumption of
gasoline by consumers.
(b) Economic benefits or losses to the state as the result of the
program.
(c) Calculation of greenhouse gas emission reductions.
SEC. 8. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.