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

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Date Published: 05/11/2017 09:00 PM
AB1341:v96#DOCUMENT

Amended  IN  Assembly  May 11, 2017
Amended  IN  Assembly  May 02, 2017
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 39719.3 to the Health and Safety Code, and to amend Section 17072 of, and to add and repeal Section 17060.3 of Sections 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. income tax credits: deduction.
(1) The Personal Income Tax Law allows various credits against the taxes imposed by that law.
This bill, for taxable years beginning on or after January 1, 2018, and before January 1, 2023, would 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 or leased in California a new near-zero-emission or zero-emission vehicle that is registered in California 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 require qualified taxpayers to obtain preapproval from the State Air Resources Board before purchasing or leasing a near-zero- or zero-emission vehicle, 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.
(2) 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, 2023, 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.

(2)

(3) 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, the Air Quality Improvement Fund, or the Alternative and Renewable Fuel and Vehicle Technology 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 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 39719.3 is added to the Health and Safety Code, to read:

39719.3.
 Moneys from the Greenhouse Gas Reduction Fund, the Air Quality Improvement Fund, or the Alternative and Renewable Fuel and Vehicle Technology 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 income tax credit in Section 17060.3 of the Revenue and Taxation Code.

SEC. 2.

 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, 2023, 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: paid or incurred for the purchase or lease in California of new vehicles that are registered in California:
(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.
(c) (1) A qualifying taxpayer purchasing a near-zero-emission or a zero-emission vehicle may assign the tax credit allowed by this section to a financing entity as follows:

(1)

(A) The assignment to the financing entity shall be completed at the time of purchase by entering the following information into an election statement:

(A)

(i) The vehicle identification number of the vehicle for which a credit is allowed by this section.

(B)

(ii) An affirmation that all the requirements of this subdivision have been met.

(2)

(B) 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)

(C) 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)

(D) The financing entity shall electronically submit a report containing the information in the election statement described in paragraph (1) subparagraph (A) to the Franchise Tax Board within 30 days of the purchase of a near-zero-emission or zero-emission vehicle.
(2) The Franchise Tax Board shall create the election statement and may request any information the Franchise Tax Board determines is necessary, but shall request, at a minimum, the information in subparagraph (A) of paragraph (1).
(3) A financing entity that is assigned the tax credit shall be allowed for each taxable year beginning on or after January 1, 2018, and before January 1, 2023, the tax credit assigned to it against the “net tax” as defined in Section 17039 or the “tax” as defined in Section 23036.
(d) (1) The qualified taxpayer shall first obtain the preapproval prescribed in paragraph (2).
(2) The State Air Resources Board shall implement a process to allow eligible applicants under subdivisions (a), (b), and (c) to obtain preapproval from the State Air Resources Board prior to purchasing or leasing a near-zero or zero-emission vehicle. The process shall provide the applicant a unique identifiable number, which the applicant can present to a dealer, and shall enable the unique identifiable number to be verified by a dealer at the time of purchase or lease. The verification of the applicant’s eligibility shall be provided to a dealer in an electronic or paper format.

(d)

(e) 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-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 determined 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.

(e)

(f) (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.

(f)

(g) A credit under this section, except for a credit assigned to a financing entity under subdivision (c), shall be allowed only on a timely filed original return of the qualified taxpayer.

(g)

(h) This section shall remain in effect only until December 1, 2023, and as of that date is repealed.
(i) The income eligibility provisions in Section 44274.3 of the Health and Safety Code shall remain in effect for purposes of qualifying for these income tax credits.

SEC. 3.

 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, 2023, 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. 4.

 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, 2023, there shall be allowed 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, 2023, and as of that date is repealed.