Bill Text

Bill Information


Add To My Favorites | print page

SB-73 Income and corporation taxes: credit: biodiesel fuel.(2007-2008)

SHARE THIS: share this bill in Facebook share this bill in Twitter
SB73:v98#DOCUMENT

Amended  IN  Senate  April 30, 2007

CALIFORNIA LEGISLATURE— 2007–2008 REGULAR SESSION

Senate Bill
No. 73


Introduced  by  Senator Florez

January 17, 2007


An act to add Sections 17053.63 and 23663 to amend Section 23036 of, and to add and repeal Sections 17053.63 and 23663 of, the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 73, as amended, Florez. Income and corporation taxes: credit: biodiesel fuel.
The Personal Income Tax Law and the Corporation Tax Law authorize various deductions and credits in computing the taxes imposed by those laws.
This bill would, under both laws, for taxable years beginning on or after January 1, 2008, and before January 1, 2014, allow a refundable tax credit, that, upon appropriation by the Legislature, would be refunded in an amount equal to a specified amount for each gallon of biodiesel fuel, as defined, produced or manufactured by a qualified producer taxpayer at any facility refinery located in this state to be reimbursed on a quarterly an annual basis, as provided.
This bill would provide that any refunds of this credit authorized by the Legislature shall be continuously appropriated from the State Highway Account in the State Transportation Funds.
The Corporation Tax Law defines the term “tax” for those purposes, and provides that credits shall be allowed against the tax in a specified order.
This bill would add to that list of credits, credits that contain refundable provisions, but do not contain carryover provisions.
This bill would take effect immediately as a tax levy.
Vote: TWO_THIRDSMAJORITY   Appropriation: YESNO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17053.63 is added to the Revenue and Taxation Code, to read:

17053.63.
 (a) For each taxable year beginning on or after January 1, 2008, there shall be allowed a credit against the “net tax,” as defined by Section 17039, an amount equal to thirty cents ($0.30) for each gallon of biodiesel fuel produced or manufactured during the taxable year by a qualified producer taxpayer at any facility refinery located in this state.
(b) The credit authorized under this section and Section 23663 shall not exceed an aggregate amount of thirty 60 million gallons per taxable year as produced or manufactured by all qualified producers taxpayers who receive a credit under this section.
(c) For purposes of this section:
(1) “Biodiesel fuel” means a renewable, biodegradable, mono alkyl ester combustible liquid fuel derived from vegetable oils or animal fats that meets the American Society for Testing and Materials specification D6751-02 D6751 for biodiesel fuel (B100) blend stock for distillate fuels.

(2)“Facility” means a qualified producer’s refinery located in California that produces or manufactures biodiesel fuel.

(3)“Qualified producer” means any person who owns or operates a facility and who is engaged in the production or manufacture of biodiesel fuel at that facility.

(2) “Manufacture” means the activity of converting or conditioning property by changing the form, composition, quality, or character of the property for ultimate sale or use as biodiesel fuel.
(3) “Produce” means the extraction or extracting of vegetable oils or animal fats for use in the manufacturing of biodiesel fuel.
(4) (A) “Qualified taxpayer” means any taxpayer who owns or operates a refinery that produces or manufactures biodiesel fuel at that refinery.
(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section or Section 23663 shall be made at the entity level and any credit under this section shall be allowed to the passthrough entity and passed through to the partners or shareholders in accordance with applicable provisions of Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001). For purposes of this paragraph, “passthrough entity” means any partnership or “S” corporation.
(5) “Refinery” means a facility located in California that produces or manufactures biodiesel fuel.
(d) Not later than 25 days after the end of each calendar quarter year, each qualified producer taxpayer shall submit any information as the Franchise Tax Board or the Treasurer requires to the Franchise Tax Board to substantiate the total amount of biodiesel fuel produced or manufactured by the qualified producer taxpayer for the previous calendar quarter year.
(e) In the case where the credit allowed by this section exceeds the taxpayer’s liability computed under this part, the excess shall be credited, upon appropriation by the Legislature, against other amounts due, if any, from the qualified producer taxpayer and the balance, if any, shall be refunded to the qualified producer on a quarterly basis. taxpayer on an annual basis.
(f) The Franchise Tax Board shall submit a quarterly an annual list, in a form agreed upon by the Franchise Tax Board and the Treasurer, to the Treasurer of those qualified producers taxpayers that are eligible to receive a refund under this section.
(g) Those amounts that are determined by the Treasurer to be necessary to make the refunds required by this subdivision any refunds authorized by the Legislature shall be continuously appropriated from the State Highway Account, notwithstanding Section 13340 of the Government Code, commencing with the 2007–2008 fiscal year, but otherwise without regard to fiscal years, to the Treasurer for the purpose of making those refunds.
(h) The Franchise Tax Board shall prescribe all rules and regulations necessary for the implementation of this section.
(i) This section shall remain in effect only until January 1, 2014, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2014, deletes or extends that date.

SEC. 2.

 Section 23036 of the Revenue and Taxation Code is amended to read:

23036.
 (a) (1) The term “tax” includes any of the following:
(A) The tax imposed under Chapter 2 (commencing with Section 23101).
(B) The tax imposed under Chapter 3 (commencing with Section 23501).
(C) The tax on unrelated business taxable income, imposed under Section 23731.
(D) The tax on S “S” corporations imposed under Section 23802.
(2) The term “tax” does not include any amount imposed under paragraph (1) of subdivision (e) of Section 24667 or paragraph (2) of subdivision (f) of Section 24667.
(b) For purposes of Article 5 (commencing with Section 18661) of Chapter 2, Article 3 (commencing with Section 19031) of Chapter 4, Article 6 (commencing with Section 19101) of Chapter 4, and Chapter 7 (commencing with Section 19501) of Part 10.2, and for purposes of Sections 18601, 19001, and 19005, the term “tax” also includes all of the following:
(1) The tax on limited partnerships, imposed under Section 17935, the tax on limited liability companies, imposed under Section 17941, and the tax on registered limited liability partnerships and foreign limited liability partnerships imposed under Section 17948.
(2) The alternative minimum tax imposed under Chapter 2.5 (commencing with Section 23400).
(3) The tax on built-in gains of S “S” corporations, imposed under Section 23809.
(4) The tax on excess passive investment income of S “S” corporations, imposed under Section 23811.
(c) Notwithstanding any other provision of this part, credits are allowed against the “tax” in the following order:
(1) Credits that do not contain carryover provisions.
(2) Credits that, when the credit exceeds the “tax,” allow the excess to be carried over to offset the “tax” in succeeding taxable years, except for those credits that are allowed to reduce the “tax” below the tentative minimum tax, as defined by Section 23455. The order of credits within this paragraph shall be determined by the Franchise Tax Board.
(3) The minimum tax credit allowed by Section 23453.
(4) Credits that are allowed to reduce the “tax” below the tentative minimum tax, as defined by Section 23455.
(5) Credits for taxes withheld under Section 18662.
(6) Credits that contain refundable provisions, but do not contain carryover provisions.
(d) Notwithstanding any other provision of this part, each of the following applies:
(1) No credit may reduce the “tax” below the tentative minimum tax (as defined by paragraph (1) of subdivision (a) of Section 23455), except the following credits:
(A) The credit allowed by former Section 23601 (relating to solar energy).
(B) The credit allowed by former Section 23601.4 (relating to solar energy).
(C) The credit allowed by former Section 23601.5 (relating to solar energy).
(D) The credit allowed by Section 23609 (relating to research expenditures).
(E) The credit allowed by former Section 23609.5 (relating to clinical testing expenses).
(F) The credit allowed by Section 23610.5 (relating to low-income housing).
(G) The credit allowed by former Section 23612 (relating to sales and use tax credit).
(H) The credit allowed by Section 23612.2 (relating to enterprise zone sales or use tax credit).
(I) The credit allowed by former Section 23612.6 (relating to Los Angeles Revitalization Zone sales tax credit).
(J) The credit allowed by former Section 23622 (relating to enterprise zone hiring credit).
(K) The credit allowed by Section 23622.7 (relating to enterprise zone hiring credit).
(L) The credit allowed by former Section 23623 (relating to program area hiring credit).
(M) The credit allowed by former Section 23623.5 (relating to Los Angeles Revitalization Zone hiring credit).
(N) The credit allowed by former Section 23625 (relating to Los Angeles Revitalization Zone hiring credit).
(O) The credit allowed by Section 23633 (relating to targeted tax area sales or use tax credit).
(P) The credit allowed by Section 23634 (relating to targeted tax area hiring credit).
(Q) The credit allowed by Section 23649 (relating to qualified property).
(2) No credit against the tax may reduce the minimum franchise tax imposed under Chapter 2 (commencing with Section 23101).
(e) Any credit which is partially or totally denied under subdivision (d) is allowed to be carried over to reduce the “tax” in the following year, and succeeding years if necessary, if the provisions relating to that credit include a provision to allow a carryover of the unused portion of that credit.
(f) Unless otherwise provided, any remaining carryover from a credit that has been repealed or made inoperative is allowed to be carried over under the provisions of that section as it read immediately prior to being repealed or becoming inoperative.
(g) Unless otherwise provided, if two or more taxpayers share in costs that would be eligible for a tax credit allowed under this part, each taxpayer is eligible to receive the tax credit in proportion to his or her respective share of the costs paid or incurred.
(h) Unless otherwise provided, in the case of an S “S” corporation, any credit allowed by this part is computed at the S “S” corporation level, and any limitation on the expenses qualifying for the credit or limitation upon the amount of the credit applies to the S corporation and to each shareholder.
(i) (1) With respect to any taxpayer that directly or indirectly owns an interest in a business entity that is disregarded for tax purposes pursuant to Section 23038 and any regulations thereunder, the amount of any credit or credit carryforward allowable for any taxable year attributable to the disregarded business entity is limited in accordance with paragraphs (2) and (3).
(2) The amount of any credit otherwise allowed under this part, including any credit carryover from prior years, that may be applied to reduce the taxpayer’s “tax,” as defined in subdivision (a), for the taxable year is limited to an amount equal to the excess of the taxpayer’s regular tax (as defined in Section 23455), determined by including income attributable to the disregarded business entity that generated the credit or credit carryover, over the taxpayer’s regular tax (as defined in Section 23455), determined by excluding the income attributable to that disregarded business entity. No credit is allowed if the taxpayer’s regular tax (as defined in Section 23455), determined by including the income attributable to the disregarded business entity is less than the taxpayer’s regular tax (as defined in Section 23455), determined by excluding the income attributable to the disregarded business entity.
(3) If the amount of a credit allowed pursuant to the section establishing the credit exceeds the amount allowable under this subdivision in any taxable year, the excess amount may be carried over to subsequent taxable years pursuant to subdivisions (d), (e), and (f).
(j) (1) Unless otherwise specifically provided, in the case of a taxpayer that is a partner or shareholder of an eligible pass-through passthrough entity described in paragraph (2), any credit passed through to the taxpayer in the taxpayer’s first taxable year beginning on or after the date the credit is no longer operative may be claimed by the taxpayer in that taxable year, notwithstanding the repeal of the statute authorizing the credit prior to the close of that taxable year.
(2) For purposes of this subdivision, “eligible pass-through passthrough entity” means any partnership or S “S” corporation that files its return on a fiscal year basis pursuant to Section 18566, and that is entitled to a credit pursuant to this part for the taxable year that begins during the last year a credit is operative.
(3) This subdivision applies to credits that become inoperative on or after the operative date of the act adding this subdivision.

SEC. 2.SEC. 3.

 Section 23663 is added to the Revenue and Taxation Code, to read:

23663.
 (a) For each taxable year beginning on or after January 1, 2008, there shall be allowed a credit against the “tax,” as defined by Section 23036, an amount equal to thirty cents ($0.30) for each gallon of biodiesel fuel produced or manufactured during the taxable year by a qualified producer taxpayer at any facility refinery located in this state.
(b) The credit authorized under this section and Section 1705363 17053.63 shall not exceed an aggregate amount of thirty 60 million gallons per taxable year as produced or manufactured by all qualified producers taxpayers who receive a credit under this section.
(c) For purposes of this section:
(1) “Biodiesel fuel” means a renewable, biodegradable, mono alkyl ester combustible liquid fuel derived from vegetable oils or animal fats that meets the American Society for Testing and Materials specification D6751-02 D6751 for biodiesel fuel (B100) blend stock for distillate fuels.

(2)“Facility” means a qualified producer’s refinery located in California that produces or manufactures biodiesel fuel.

(3)“Qualified producer” means any person who owns or operates a facility and who is engaged in the production or manufacture of biodiesel fuel at that facility.

(2) “Manufacture” means the activity of converting or conditioning property by changing the form, composition, quality, or character of the property for ultimate sale or use as biodiesel fuel.
(3) “Produce” means the extraction or extracting of vegetable oils or animal fats for use in the manufacturing of biodiesel fuel.
(4) (A) “Qualified taxpayer” means any taxpayer who owns or operates a refinery that produces or manufactures biodiesel fuel at that refinery.
(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 17053.63 shall be allowed to the passthrough entity and passed through to the partners or shareholders in accordance with applicable provisions of Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001). For purposes of this paragraph, “passthrough entity” means any partnership or “S” corporation.
(5) “Refinery” means a facility located in California that produces or manufactures biodiesel fuel.
(d) Not later than 25 days after the end of each calendar quarter year, each qualified producer taxpayer shall submit any information as the Franchise Tax Board or the Treasurer requires to the Franchise Tax Board to substantiate the total amount of biodiesel fuel produced or manufactured by the qualified producer taxpayer for the previous calendar quarter year.
(e) In the case where the credit allowed by this section exceeds the taxpayer’s liability computed under this part, the excess shall be credited, upon appropriation by the Legislature, against other amounts due, if any, from the qualified producer taxpayer and the balance, if any, shall be refunded to the qualified producer on a quarterly basis. taxpayer on an annual basis.
(f) The Franchise Tax Board shall submit a quarterly an annual list, in a form agreed upon by the Franchise Tax Board and the Treasurer, to the Treasurer of those qualified producers taxpayers that are eligible to receive a refund under this section.
(g) Those amounts that are determined by the Treasurer to be necessary to make the refunds required by this subdivision any refunds authorized by the Legislature shall be continuously appropriated from the State Highway Account, notwithstanding Section 13340 of the Government Code, commencing with the 2007–2008 fiscal year, but otherwise without regard to fiscal years, to the Treasurer for the purpose of making those refunds.
(h) The Franchise Tax Board shall prescribe all rules and regulations necessary for the implementation of this section.
(i) This section shall remain in effect only until January 1, 2014, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2014, deletes or extends that date.

SEC. 3.SEC. 4.

 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.