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AB-1341 Zero-emission and near-zero-emission vehicles: tax credits and exemptions.(2017-2018)

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Date Published: 03/29/2017 09:00 PM
AB1341:v98#DOCUMENT

Amended  IN  Assembly  March 29, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1341


Introduced by Assembly Member Calderon

February 17, 2017


An act to add Section 44258.6 39719.3 to the Health and Safety Code, and to amend Section 17072 of, to add Section 6012.4 to, and to add and repeal Sections Section 17060.3 and 17206.3 of, the Revenue and Taxation Code, relating to vehicular air pollution.


LEGISLATIVE COUNSEL'S DIGEST


AB 1341, as amended, Calderon. Zero-emission and near-zero-emission vehicles: tax credits, deductions, credits and exemptions.
(1) The Sales and Use Tax Law imposes a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption of tangible personal property purchased from a retailer for the storage, use, or other consumption in this state measured by sales price. That law defines the terms “gross receipts” and “sales price.”
This bill, on and after January 1, 2018, would exclude from “gross receipts” and “sales price” that portion of the cost of a new near-zero used near-zero-emission or zero-emission vehicle purchased by a low-income purchaser, as defined, that does not exceed $40,000.
(2) The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes generally in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.
This bill would specify that the exemption described in (2) (1) does not apply to local sales and use taxes or transactions and use taxes.
(3) The Personal Income Tax Law allows various credits against the taxes imposed by that law.
This bill would, for taxable years beginning on or after January 1, 2018, and before January 1, 2026, allow a credit under the Personal Income Tax Law in a specified amount, depending on the type of vehicle, to a qualified taxpayer, as defined, who purchased a new near-zero near-zero-emission or zero-emission vehicle during the taxable year. The bill would provide for an additional credit for qualified taxpayers who are low-income purchasers, as defined. The bill would provide for assignment by a qualified taxpayer of the tax credit to a financing entity, as specified. The bill would state the intent of the Legislature to enact legislation to provide that the credit amount in excess of tax liability would be refundable in those years in which an appropriation for that purpose is made by the Legislature.

(4)The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law, including deductions for payments to individual retirement accounts, alimony payments, and interest on educational loans.

This bill, for taxable years beginning on or after January 1, 2018, and before January 1, 2026, would allow a specified deduction, depending on the type of vehicle, in computing adjusted gross income to a qualified taxpayer, as defined, who purchased a used near-zero or zero-emission vehicle during the taxable year, as provided.

(5)Existing law establishes the Air Quality Improvement Program that is administered by the State Air Resources Board for the purposes of funding projects related to, among other things, reduction of criteria air pollutants and improvement of air quality. Pursuant to the Air Quality Improvement Program, the state board has established the Clean Vehicle Rebate Project to promote the production and use of zero-emission vehicles.

The Charge Ahead California Initiative, administered by the state board, includes goals of, among other things, placing in service at least 1,000,000 zero-emission and near-zero-emission vehicles by January 1, 2023, and increasing access for disadvantaged, low-income, and moderate-income communities and consumers to zero-emission and near-zero-emission vehicles.

This bill would require, on or before January 1, 2019, the state board to develop and implement a comprehensive program comprised of a portfolio of incentives to promote zero-emission and near-zero-emission vehicle deployment in the state to drastically increase the use of those vehicles and to meet specified goals established by the Governor and the Legislature.

(6)This bill would require the Franchise Tax Board to make an annual report to the Legislature regarding the tax provisions allowed by the bill.

(4) The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board from covered entities as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund. Existing law appropriates certain of these moneys for various purposes.
This bill would provide that moneys from the Greenhouse Gas Reduction Fund, upon appropriation by the Legislature, may be transferred to the General Fund for purposes of reimbursing the General Fund for the costs of the sales tax exemption and the income tax credit in the bill.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.Section 44258.6 is added to the Health and Safety Code, to read:
44258.6.

(a)On or before January 1, 2019, the state board shall develop and implement a comprehensive program to promote zero-emission and near-zero-emission vehicle deployment in the state to drastically increase the use of those vehicles and to meet the goals established by the Governor and the Legislature, including, but not limited to, the ZEV Action Plan by the Governor’s Interagency Working Group on Zero-Emission Vehicles and the Charge Ahead California Initiative.

(b)(1)The program shall consist of a portfolio of incentives, including, but not limited to, the following:

(A)An employer incentive program, including, but not limited to, incentives targeted at companies located outside population centers or companies whose employees commute from a 50-mile radius.

(B)An incentive program targeted at low-income individuals for the purchase or leasing of zero-emission or near-zero-emission vehicles.

(C)Onroad incentives.

(2)Incentives may include grants, loans, revolving loans, or other appropriate measures.

(3)In implementing the program, the state board shall consult with the State Energy Resources Conservation and Development Commission to identify opportunities for coordination with investment in zero-emission and near-zero-emission vehicle infrastructure pursuant to Section 44272.

(c)Moneys in the Greenhouse Gas Reduction Fund, the Air Quality Improvement Fund, or the Alternative and Renewable Fuel and Vehicle Technology Fund shall be made available, upon appropriation by the Legislature, for the program.

(d)The state board, in accordance with Section 9795 of the Government Code, shall submit an annual report to the Legislature regarding the efficacy of the program.

SECTION 1.

 Section 39719.3 is added to the Health and Safety Code, to read:

39719.3.
 Moneys from the Greenhouse Gas Reduction Fund, upon appropriation by the Legislature, may be transferred to the General Fund for purposes of reimbursing the General Fund for the costs of the sales tax exemption in Section 6012.4 of the Revenue and Taxation Code and the income tax credit in Section 17060.3 of the Revenue and Taxation Code.

SEC. 2.

 Section 6012.4 is added to the Revenue and Taxation Code, to read:

6012.4.
 (a) On or after January 1, 2018, for purposes of this part, “gross receipts” and “sales price” do not include that portion of the cost of a new near-zero used near-zero-emission or zero-emission vehicle purchased by a low-income purchaser that does not exceed forty thousand dollars ($40,000).
(b) For purposes of this section:
(1) “Low-income purchaser” means an individual or individuals whose household income does not exceed 80% 80 percent of the median income of the county in which they reside as determined by the United States Department of Housing and Urban Development.
(2) “Near-zero-emission vehicle” means a vehicle that utilizes zero-emission technologies, enables technologies that provide a pathway to zero-emissions operations, or incorporates other technologies that significantly reduce criteria pollutants, toxic air contaminants, and greenhouse gas emissions, as defined by the State Air Resources Board in consultation with the State Energy Resources Conservation and Development Commission consistent with meeting the state’s mid- and long-term air quality standards and climate goals.
(3) “Zero-emission vehicle” means a vehicle that produces no emissions of criteria pollutants, toxic air contaminants, and greenhouse gases when stationary or operating, as determined by the State Air Resources Board.
(c) Notwithstanding any provision of the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)), the exemption established by this section shall not apply with respect to any tax levied by a county, city, or district pursuant to, or in accordance with, either of those laws.

SEC. 3.

 Section 17060.3 is added to the Revenue and Taxation Code, to read:

17060.3.
 (a) For each taxable year beginning on or after January 1, 2018, and before January 1, 2026, there shall be allowed to a qualified taxpayer a credit against the “net tax,” as defined in Section 17039, in an amount equal to the following amounts for new vehicles:
(1) One thousand five hundred dollars ($1,500) for plug-in hybrid electric vehicles with an electric range of more than 20 miles.
(2) Two thousand five hundred dollars ($2,500) for battery electric vehicles.
(3) Five thousand dollars ($5,000) for hydrogen fuel cell electric vehicles.
(b) In addition to the credit allowed pursuant to subdivision (a), a qualified taxpayer who is a low-income purchaser shall be allowed a credit of five hundred dollars ($500) for each eligible vehicle type identified in subdivision (a). For purposes of this subdivision, “low-income purchaser” means an individual or individuals whose household income does not exceed 80 percent of the median income of the county in which they reside as determined by the United States Department of Housing and Urban Development.

(b)

(c) A qualifying taxpayer purchasing a near-zero near-zero-emission or a zero-emission vehicle may assign the tax credit allowed by this section to a financing entity as follows:
(1) The assignment to the financing entity shall be completed at the time of purchase by entering the following information into an election statement:
(A) The vehicle identification number of the vehicle for which a credit is allowed by this section.
(B) An affirmation that all the requirements of this subdivision have been met.
(2) The qualified taxpayer electing the assignment must assign the tax credit to the financing entity and forfeit the right to claim the tax credit on the qualified taxpayer’s tax return in exchange for good and valuable consideration.
(3) The financing entity shall compensate the qualified taxpayer for the full nominal value of the tax credit. The compensation paid to the qualified taxpayer shall be considered a refund of state taxes and shall not be considered as income.
(4) The financing entity shall electronically submit a report containing the information in the election statement described in paragraph (1) to the Franchise Tax Board within 30 days of the purchase of a near-zero near-zero-emission or zero-emission vehicle.

(5)The Franchise Tax Board shall make the information transmitted pursuant to paragraph (4) available to the State Air Resources Board for purposes of reporting on the efficacy and effectiveness of the program as described in Section 44258.6 of the Health and Safety Code.

(c)

(d) For the purposes of this section:
(1) “Qualified taxpayer” means an individual or individuals who meet the income eligibility requirements specified by the State Air Resources Board pursuant to subparagraph (B) of paragraph (3) of subdivision (c) of Section 44258.4 of the Health and Safety Code and who purchased a near-zero near-zero-emission or zero-emission vehicle during the taxable year.
(2) “Near-zero-emission vehicle” means a vehicle that utilizes zero-emission technologies, enables technologies that provide a pathway to zero-emissions operations, or incorporates other technologies that significantly reduce criteria pollutants, toxic air contaminants, and greenhouse gas emissions, as defined by the State Air Resources Board in consultation with the State Energy Resources Conservation and Development Commission consistent with meeting the state’s mid- and long-term air quality standards and climate goals.
(3) “Zero-emission vehicle” means a vehicle that produces no emissions of criteria pollutants, toxic air contaminants, and greenhouse gases when stationary or operating, as determined by the State Air Resources Board.

(d)

(e) (1) Subject to paragraph (2), in the case where the credit allowed by this section exceeds the “net tax” the excess may be carried over to reduce the “net tax,” in the following year, and succeeding six years if necessary, until the credit is exhausted.
(2) It is the intent of the Legislature to enact legislation to provide that in the case where the credit allowed by this section exceeds the “net tax,” the excess, in lieu of the carry forward pursuant to paragraph (1), may be refunded to taxpayers, upon appropriation by the Legislature.

(e)

(f) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.

SEC. 4.Section 17072 of the Revenue and Taxation Code is amended to read:
17072.

(a)Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.

(b)Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.

(c)Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.

(d)For taxable years beginning on or after January 1, 2018, and before January 1, 2026, Section 62(a) of the Internal Revenue Code is modified to provide that the deduction under Section 17206.3 shall be allowed in determining adjusted gross income.

SEC. 5.Section 17206.3 is added to the Revenue and Taxation Code, to read:
17206.3.

(a)For taxable years beginning on or after January 1, 2018, and before January 1, 2026, there shall be allowed as a deduction to a qualified taxpayer who, during the taxable year, purchased a used near-zero or zero-emission vehicle, in the following amounts:

(1)One thousand five hundred dollars ($1,500) for plug-in hybrid electric vehicles with an electric range of more than 20 miles.

(2)Two thousand five hundred dollars ($2,500) for battery electric vehicles.

(3)Five thousand dollars ($5,000) for hydrogen fuel cell electric vehicles.

(b)For the purposes of this section:

(1)“Qualified taxpayer” means an individual or individuals who meet the income eligibility requirements specified by the State Air Resources Board pursuant to subparagraph (B) of paragraph (3) of subdivision (c) of Section 44258.4 of the Health and Safety Code.

(2)“Near-zero-emission vehicle” means a vehicle that utilizes zero-emission technologies, enables technologies that provide a pathway to zero-emissions operations, or incorporates other technologies that significantly reduce criteria pollutants, toxic air contaminants, and greenhouse gas emissions, as defined by the State Air Resources Board in consultation with the State Energy Resources Conservation and Development Commission consistent with meeting the state’s mid- and long-term air quality standards and climate goals.

(3)“Zero-emission vehicle” means a vehicle that produces no emissions of criteria pollutants, toxic air contaminants, and greenhouse gases when stationary or operating, as determined by the State Air Resources Board.

(c)This section shall remain in effect only until December 1, 2026, and as of that date is repealed.

SEC. 6.

(a)In accordance with Section 41 of the Revenue and Taxation Code, on or before January 1, 2019, and each January 1 thereafter until January 1, 2027, the Franchise Tax Board, in consultation with the State Board of Equalization, shall annually prepare a written report to the Legislature regarding the efficacy of Sections 6012.4, 17060.3, and 17206.3 of the Revenue and Taxation Code, as added by Sections 2, 3, and 54 of this act.

(b)A report submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.