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SB-43 Carbon taxes.(2019-2020)

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Date Published: 05/21/2019 09:00 PM
SB43:v96#DOCUMENT

Amended  IN  Senate  May 21, 2019
Amended  IN  Senate  April 29, 2019
Amended  IN  Senate  April 22, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill No. 43


Introduced by Senator Allen

December 03, 2018


An act to add Section 38561.5 to the Health and Safety Code, relating to greenhouse gases.


LEGISLATIVE COUNSEL'S DIGEST


SB 43, as amended, Allen. Carbon taxes.
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 state board is required to approve a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020 and to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.

The act requires the state board to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and to update the scoping plan at least once every 5 years.

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 in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state.
This bill would require the state board, in consultation with the California Department of Tax and Fee Administration, board, no later than January 1, 2022, to submit a report to the Legislature on the results of findings from a study, as specified, to propose, and to determine the feasibility and practicality of, a system to replace of assessing the carbon intensity of all retail products subject to the tax imposed pursuant to the Sales and Use Tax Law with an assessment on retail products sold or used in the state based on the carbon intensity of the product to encourage the use of less carbon-intensive products. The bill would require the state board to revise, as necessary, the 2017 scoping plan to reflect the carbon emission reduction benefits that may be realized through the imposition of the assessment based on carbon intensities of products and to consider the results of the study in future updates to the scoping plan. Law.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 38561.5 is added to the Health and Safety Code, to read:
38561.5.

(a)(1)On or before January 1, 2021, the state board, in consultation with the California Department of Tax and Fee Administration, shall submit a report to the Legislature on the results of a study to propose, and to determine the feasibility and practicality of, a system to replace the tax imposed pursuant to Sections 6051, 6051.3, 6201, and 6201.3 of the Revenue and Taxation Code with an assessment on retail products sold or used in the state based on the carbon intensity of the product to encourage the use of less carbon-intensive products.

38561.5.
 (a) On or before January 1, 2022, the state board shall submit a report to the Legislature on the findings from a study to determine the feasibility and practicality of assessing the carbon intensity of all retail products subject to the Sales and Use Tax Law (Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code) sold or offered for sale in the state. In conducting the study, the state board shall do all of the following:
(1) Make a determination whether there are feasible and practicable mechanisms for assessing and assigning carbon intensity to retail products subject to the Sales and Use Tax Law (Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code). In the report, the state board shall specifically discuss the feasibility of calculating the carbon intensity for all retail products subject to the Sales and Use Tax Law (Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code). That determination shall include both of the following:
(A) Whether a separate or modified mechanism is needed for evaluating the carbon intensity of categories of retail products imported into the state for sale.
(B) A consideration of transportation emissions to import products for sale to the state.
(2) Identify the availability of the data needed to develop a mechanism identified in paragraph (1), which may include, but need not be limited to, any of the following:
(A) Production processes and technology.
(B) Energy and fuel sources used for production.
(C) Transportation modes.
(3) Identify mechanisms for the collection, use, and protection of the data required to conduct an assessment.
(4) Consider other studies or programs that assess taxes or fees based on the carbon intensity of retail products.
(5) Identify, to the extent feasible, whether limiting the mechanism to certain retail product types or categories would provide the greatest carbon emissions reduction benefits if the state replaces the tax imposed pursuant to the Sales and Use Tax Law (Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code) with a revenue-neutral carbon tax.
(6) Discuss, to the extent feasible, the advantages and the disadvantages, along with any potential impacts, of a revenue-neutral carbon tax on current carbon emissions reduction policies.
(7) Identify the necessary statutory changes to implement the proposed system.
(8) Make the data and assumptions used in conducting the study available to the general public.
(9) Consult with the public, including entities regulated under this division, Section 38566, Assembly Bill 398 (Ch. 135, Stats. 2017), and the Clean Energy and Pollution Reduction Act of 2015 (Ch. 547, Stats. 2015).
(10) Hold at least three public meetings prior to developing the report to be submitted.

(2)

(b) The state board and the California Department of Tax and Fee Administration shall consult with other agencies to address questions that the state board and the department would not be able to address otherwise. otherwise in the process of conducting the study.

(3)

(c) (1) The report required pursuant to paragraph (1) subdivision (a) shall be submitted in accordance with Section 9795 of the Government Code.

(4)

(2) Pursuant to Section 10231.5 of the Government Code, the requirement to submit the report pursuant to paragraph (1) subdivision (a) shall be inoperative on January 1, 2025. 2026.

(b)In conducting the study, the state board shall do all of the following:

(1)Identify a feasible and practicable mechanism for assessing a carbon tax on retail products in lieu of the sales and use tax.

(2)Identify, to the extent feasible, the carbon impacts of retail products subject to the Sales and Use Tax Law.

(3)Identify appropriate product types or categories that would provide the greatest carbon emission reduction benefit if an assessment on retail products based on carbon intensity is imposed on the product in lieu of the sales and use tax.

(4)Identify carbon emission reduction benefits that may be realized through the imposition of an assessment on retail products based on carbon intensity of products in lieu of a sales and use tax.

(5)Ensure that the proposed system to replace the sales and use tax would generate an equivalent amount of revenues generated by the sales and use tax, making the change from a sales and use tax to a carbon tax revenue neutral.

(6)Identify necessary statutory changes to implement the proposed system.

(7)Identify and explore the impacts of a revenue neutral carbon tax on various income levels and ways to ensure that it does not disproportionately impact low-income consumers.

(8)Identify to the extent feasible a cost estimate for the private sector to comply with the new tax system and identify the needed technologies and systems for compliance.

(c)(1)The state board shall revise, as necessary, the 2017 scoping plan prepared pursuant to Section 38561 to reflect the carbon emission reduction benefits that may be realized through the imposition of an assessment on retail products in lieu of a sales and use tax.

(2)The state board shall consider the results of the study conducted pursuant to subdivision (a) in any updates to the scoping plan.