california legislature 2017 18 regular session ASSEMBLY BILL No. 1341 Introduced by Assembly Member Calderon February 17, 2017 An act to add Section 44258.6 to the Health and Safety Code, and to amend Section 17072 of, to add Section 6012.4 to, and to add and repeal Sections 17060.3 and 17206.3 of, the Revenue and Taxation Code, relating to vehicular air pollution. legislative counsel s digest, as introduced, Calderon. Zero-emission and near-zero-emission vehicles: tax credits, deductions, 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 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.
2 This bill would specify that the exemption described in (2) 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 or zero-emission vehicle during the taxable year. 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
3 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. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. The people of the State of California do enact as follows: line 1 SECTION 1. Section 44258.6 is added to the Health and Safety line 2 Code, to read: line 3 44258.6. (a) On or before January 1, 2019, the state board line 4 shall develop and implement a comprehensive program to promote line 5 zero-emission and near-zero-emission vehicle deployment in the line 6 state to drastically increase the use of those vehicles and to meet line 7 the goals established by the Governor and the Legislature, line 8 including, but not limited to, the ZEV Action Plan by the line 9 Governor s Interagency Working Group on Zero-Emission line 10 Vehicles and the Charge Ahead California Initiative. line 11 (b) (1) The program shall consist of a portfolio of incentives, line 12 including, but not limited to, the following: line 13 (A) An employer incentive program, including, but not limited line 14 to, incentives targeted at companies located outside population line 15 centers or companies whose employees commute from a 50-mile line 16 radius. line 17 (B) An incentive program targeted at low-income individuals line 18 for the purchase or leasing of zero-emission or near-zero-emission line 19 vehicles. line 20 (C) Onroad incentives. line 21 (2) Incentives may include grants, loans, revolving loans, or line 22 other appropriate measures. line 23 (3) In implementing the program, the state board shall consult line 24 with the State Energy Resources Conservation and Development line 25 Commission to identify opportunities for coordination with line 26 investment in zero-emission and near-zero-emission vehicle line 27 infrastructure pursuant to Section 44272. line 28 (c) Moneys in the Greenhouse Gas Reduction Fund, the Air line 29 Quality Improvement Fund, or the Alternative and Renewable
4 line 1 Fuel and Vehicle Technology Fund shall be made available, upon line 2 appropriation by the Legislature, for the program. line 3 (d) The state board, in accordance with Section 9795 of the line 4 Government Code, shall submit an annual report to the Legislature line 5 regarding the efficacy of the program. line 6 SEC. 2. Section 6012.4 is added to the Revenue and Taxation line 7 Code, to read: line 8 6012.4. (a) On or after January 1, 2018, for purposes of this line 9 part, gross receipts and sales price do not include that portion line 10 of the cost of a new near-zero or zero-emission vehicle purchased line 11 by a low-income purchaser that does not exceed forty thousand line 12 dollars ($40,000). line 13 (b) For purposes of this section: line 14 (1) Low-income purchaser means an individual or individuals line 15 whose household income does not exceed 80% of the median line 16 income of the county in which they reside as determined by the line 17 United States Department of Housing and Urban Development. line 18 (2) Near-zero-emission vehicle means a vehicle that utilizes line 19 zero-emission technologies, enables technologies that provide a line 20 pathway to zero-emissions operations, or incorporates other line 21 technologies that significantly reduce criteria pollutants, toxic air line 22 contaminants, and greenhouse gas emissions, as defined by the line 23 State Air Resources Board in consultation with the State Energy line 24 Resources Conservation and Development Commission consistent line 25 with meeting the state s mid- and long-term air quality standards line 26 and climate goals. line 27 (3) Zero-emission vehicle means a vehicle that produces no line 28 emissions of criteria pollutants, toxic air contaminants, and line 29 greenhouse gases when stationary or operating, as determined by line 30 the State Air Resources Board. line 31 (c) Notwithstanding any provision of the Bradley-Burns Uniform line 32 Local Sales and Use Tax Law (Part 1.5 (commencing with Section line 33 7200)) or the Transactions and Use Tax Law (Part 1.6 line 34 (commencing with Section 7251)), the exemption established by line 35 this section shall not apply with respect to any tax levied by a line 36 county, city, or district pursuant to, or in accordance with, either line 37 of those laws. line 38 SEC. 3. Section 17060.3 is added to the Revenue and Taxation line 39 Code, to read:
5 line 1 17060.3. (a) For each taxable year beginning on or after line 2 January 1, 2018, and before January 1, 2026, there shall be allowed line 3 to a qualified taxpayer a credit against the net tax, as defined in line 4 Section 17039, in an amount equal to the following amounts for line 5 new vehicles: line 6 (1) One thousand five hundred dollars ($1,500) for plug-in line 7 hybrid electric vehicles with an electric range of more than 20 line 8 miles. line 9 (2) Two thousand five hundred dollars ($2,500) for battery line 10 electric vehicles. line 11 (3) Five thousand dollars ($5,000) for hydrogen fuel cell electric line 12 vehicles. line 13 (b) A qualifying taxpayer purchasing a near-zero or a line 14 zero-emission vehicle may assign the tax credit allowed by this line 15 section to a financing entity as follows: line 16 (1) The assignment to the financing entity shall be completed line 17 at the time of purchase by entering the following information into line 18 an election statement: line 19 (A) The vehicle identification number of the vehicle for which line 20 a credit is allowed by this section. line 21 (B) An affirmation that all the requirements of this subdivision line 22 have been met. line 23 (2) The qualified taxpayer electing the assignment must assign line 24 the tax credit to the financing entity and forfeit the right to claim line 25 the tax credit on the qualified taxpayer s tax return in exchange line 26 for good and valuable consideration. line 27 (3) The financing entity shall compensate the qualified taxpayer line 28 for the full nominal value of the tax credit. The compensation paid line 29 to the qualified taxpayer shall be considered a refund of state taxes line 30 and shall not be considered as income. line 31 (4) The financing entity shall electronically submit a report line 32 containing the information in the election statement described in line 33 paragraph (1) to the Franchise Tax Board within 30 days of the line 34 purchase of a near-zero or zero-emission vehicle. line 35 (5) The Franchise Tax Board shall make the information line 36 transmitted pursuant to paragraph (4) available to the State Air line 37 Resources Board for purposes of reporting on the efficacy and line 38 effectiveness of the program as described in Section 44258.6 of line 39 the Health and Safety Code. line 40 (c) For the purposes of this section:
6 line 1 (1) Qualified taxpayer means an individual or individuals line 2 who meet the income eligibility requirements specified by the line 3 State Air Resources Board pursuant to subparagraph (B) of line 4 paragraph (3) of subdivision (c) of Section 44258.4 of the Health line 5 and Safety Code and who purchased a near-zero or zero-emission line 6 vehicle during the taxable year. line 7 (2) Near-zero-emission vehicle means a vehicle that utilizes line 8 zero-emission technologies, enables technologies that provide a line 9 pathway to zero-emissions operations, or incorporates other line 10 technologies that significantly reduce criteria pollutants, toxic air line 11 contaminants, and greenhouse gas emissions, as defined by the line 12 State Air Resources Board in consultation with the State Energy line 13 Resources Conservation and Development Commission consistent line 14 with meeting the state s mid- and long-term air quality standards line 15 and climate goals. line 16 (3) Zero-emission vehicle means a vehicle that produces no line 17 emissions of criteria pollutants, toxic air contaminants, and line 18 greenhouse gases when stationary or operating, as determined by line 19 the State Air Resources Board. line 20 (d) (1) Subject to paragraph (2), in the case where the credit line 21 allowed by this section exceeds the net tax the excess may be line 22 carried over to reduce the net tax, in the following year, and line 23 succeeding six years if necessary, until the credit is exhausted. line 24 (2) It is the intent of the Legislature to enact legislation to line 25 provide that in the case where the credit allowed by this section line 26 exceeds the net tax, the excess, in lieu of the carry forward line 27 pursuant to paragraph (1), may be refunded to taxpayers, upon line 28 appropriation by the Legislature. line 29 (e) This section shall remain in effect only until December 1, line 30 2026, and as of that date is repealed. line 31 SEC. 4. Section 17072 of the Revenue and Taxation Code is line 32 amended to read: line 33 17072. (a) Section 62 of the Internal Revenue Code, relating line 34 to adjusted gross income defined, shall apply, except as otherwise line 35 provided. line 36 (b) Section 62(a)(2)(D) of the Internal Revenue Code, relating line 37 to certain expenses of elementary and secondary school teachers, line 38 shall not apply. line 39 (c) Section 62(a)(21) of the Internal Revenue Code, relating to line 40 attorneys fees relating to awards to whistleblowers, shall not apply.
7 line 1 (d) For taxable years beginning on or after January 1, 2018, line 2 and before January 1, 2026, Section 62(a) of the Internal Revenue line 3 Code is modified to provide that the deduction under Section line 4 17206.3 shall be allowed in determining adjusted gross income. line 5 SEC. 5. Section 17206.3 is added to the Revenue and Taxation line 6 Code, to read: line 7 17206.3. (a) For taxable years beginning on or after January line 8 1, 2018, and before January 1, 2026, there shall be allowed as a line 9 deduction to a qualified taxpayer who, during the taxable year, line 10 purchased a used near-zero or zero-emission vehicle, in the line 11 following amounts: line 12 (1) One thousand five hundred dollars ($1,500) for plug-in line 13 hybrid electric vehicles with an electric range of more than 20 line 14 miles. line 15 (2) Two thousand five hundred dollars ($2,500) for battery line 16 electric vehicles. line 17 (3) Five thousand dollars ($5,000) for hydrogen fuel cell electric line 18 vehicles. line 19 (b) For the purposes of this section: line 20 (1) Qualified taxpayer means an individual or individuals line 21 who meet the income eligibility requirements specified by the line 22 State Air Resources Board pursuant to subparagraph (B) of line 23 paragraph (3) of subdivision (c) of Section 44258.4 of the Health line 24 and Safety Code. line 25 (2) Near-zero-emission vehicle means a vehicle that utilizes line 26 zero-emission technologies, enables technologies that provide a line 27 pathway to zero-emissions operations, or incorporates other line 28 technologies that significantly reduce criteria pollutants, toxic air line 29 contaminants, and greenhouse gas emissions, as defined by the line 30 State Air Resources Board in consultation with the State Energy line 31 Resources Conservation and Development Commission consistent line 32 with meeting the state s mid- and long-term air quality standards line 33 and climate goals. line 34 (3) Zero-emission vehicle means a vehicle that produces no line 35 emissions of criteria pollutants, toxic air contaminants, and line 36 greenhouse gases when stationary or operating, as determined by line 37 the State Air Resources Board. line 38 (c) This section shall remain in effect only until December 1, line 39 2026, and as of that date is repealed.
8 line 1 SEC. 6. (a) In accordance with Section 41 of the Revenue and line 2 Taxation Code, on or before January 1, 2019, and each January 1 line 3 thereafter until January 1, 2027, the Franchise Tax Board, in line 4 consultation with the State Board of Equalization, shall annually line 5 prepare a written report to the Legislature regarding the efficacy line 6 of Sections 6012.4, 17060.3, and 17206.3 of the Revenue and line 7 Taxation Code, as added by Sections 2, 3, and 54 of this act. line 8 (b) A report submitted pursuant to subdivision (a) shall be line 9 submitted in compliance with Section 9795 of the Government line 10 Code. O