BILL NUMBER: SB 480 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 29, 2015
INTRODUCED BY Senator Pan
FEBRUARY 26, 2015
An act to add and repeal Section 97.83 to,
of, and to add and repeal Part 11
(commencing with Section 5500) to of
Division 1 of, the Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 480, as amended, Pan. Taxation: qualified heavy equipment.
The California Constitution authorizes the Legislature to classify
personal property for differential taxation or for exemption by
means of a statute approved by a 2/3 vote of the membership of each
house.
This bill would, pursuant to this constitutional authorization, on
and after July 1, 2016, to before July 1, 2026, impose a
tax on every qualified renter for the privilege of renting qualified
heavy equipment in this state at the rate of 0.75% of the rental
price from the renting of qualified heavy equipment. This bill would
require a qualified renter to pay and remit the tax, as provided.
This bill would provide that this tax shall be in lieu of any
personal property tax on qualified heavy equipment. This bill would
require the tax to be administered by the State Board of Equalization
and to be collected pursuant to the procedures set forth in the Fee
Collection Procedures Law. This bill would require all revenues,
interest, penalties, and other amounts, less refunds and the board's
costs of administration, derived from the imposition of the tax to be
deposited in the General Fund.
Existing property tax law requires the county auditor, in each
fiscal year, to allocate property tax revenue to local jurisdictions
in accordance with specified formulas and procedures, and generally
requires that each jurisdiction be allocated an amount equal to the
total of the amount of revenue allocated to that jurisdiction in the
prior fiscal year, subject to certain modifications, and that
jurisdiction's portion of the annual tax increment, as defined.
Existing property tax law also reduces the amounts of ad valorem
property tax revenue that would otherwise be annually allocated to
the county, cities, and special districts pursuant to these general
allocation requirements by requiring, for purposes of determining
property tax revenue allocations in each county for the 1992-93 and
1993-94 fiscal years, that the amounts of property tax revenue deemed
allocated in the prior fiscal year to the county, cities, and
special districts be reduced in accordance with certain formulas. It
requires that the revenues not allocated to the county, cities, and
special districts as a result of these reductions be transferred to
the Educational Revenue Augmentation Fund in that county for
allocation to school districts, community college districts, and the
county office of education.
This bill would, for the 2016-17 fiscal year and for each
fiscal year thereafter, to the 2025-26 fiscal year,
inclusive, require the county auditor to increase the total
amount of ad valorem property tax revenue that is otherwise required
to be allocated among the county and each city and special district
in the county by the qualified heavy equipment reimbursement amount,
as defined, and to commensurately decrease the amount of ad valorem
property tax revenue that is otherwise required to be allocated to
the county Educational Revenue Augmentation Fund and, if necessary,
the amount of those revenue revenues
otherwise required to be allocated to school districts, as specified,
by the qualified heavy equipment reimbursement amount.
By expanding the application of the Fee Collection Procedures Law,
the violation of which is a crime, and by imposing new duties upon
local officials in the allocation of ad valorem property tax
revenues, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Section 2229 of the Revenue and Taxation Code requires the
Legislature to reimburse local agencies annually for certain property
tax revenues lost as a result of any exemption or classification of
property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 97.83 is added to the Revenue and Taxation
Code, to read:
97.83. (a) (1) Notwithstanding any other law, for the 2016-17
fiscal year and for each fiscal year thereafter,
to the 2025-26 fiscal year, inclusive, the auditor of each
county shall do both of the following:
(A) Increase the total amount of ad valorem property tax revenue
that is otherwise required to be allocated among the county and each
city and special district in the county by the qualified heavy
equipment reimbursement amount. The qualified heavy equipment
reimbursement amount shall be allocated among the county, cities, and
special districts in proportion to the amounts of ad valorem
property tax revenue otherwise allocated among those local agencies.
(B) Decrease the total amount of ad valorem property tax revenue
that is otherwise required to be allocated to the county's
Educational Revenue Augmentation Fund by the qualified heavy
equipment reimbursement amount.
(2) (A) In the event that the county's Educational Revenue
Augmentation Fund does not have sufficient funds to offset the
qualified heavy equipment reimbursement amount, the auditor shall, to
the extent that those funds are insufficient, decrease the total
amount of ad valorem property tax that is allocated to local school
districts providing instruction for kindergarten and grades 1 to 12,
inclusive, that are excess tax school entities, in proportion to
their allocations of ad valorem property tax revenue allocated to
school districts providing instruction for kindergarten and grades 1
to 12, inclusive, in the county, and allocate that amount among the
county, cities, and special districts in proportion to the amounts of
ad valorem property tax revenues otherwise allocated among those
local agencies.
(B) In the event that the amount of ad valorem property tax
revenues allocated to the Educational Revenue Augmentation Fund,
together with the allocations to those school districts providing
instruction for kindergarten and grades 1 to 12, inclusive, that are
excess tax school entities, is insufficient to offset the qualified
heavy equipment reimbursement amount, the auditor may also decrease
the amount of ad valorem property tax revenues allocated to school
districts providing instruction for kindergarten and grades 1 to 12,
inclusive, that are not excess tax school entities, and allocate that
amount among the county, cities, and special districts in proportion
to the amounts of ad valorem property tax revenue otherwise
allocated among those local agencies.
(b) For purposes of this section, "qualified heavy equipment
reimbursement amount" means the total amount of ad valorem property
tax revenue received by the county and each city and special district
in the county in the 2014-15 fiscal year from renters of qualified
heavy equipment, as defined in Part 11 (commencing with Section 5500)
of Division 1.
(c) For the 2017-18 fiscal year and for each fiscal year
thereafter, to the 2025-26 fiscal year, inclusive,
ad valorem property tax revenue allocations made pursuant to
Sections 96.1 and 96.5, or any successor to either of those
provisions, shall not incorporate the allocation adjustments made by
this section.
(d) This section shall be repealed on January 1, 2027.
SEC. 2. Part 11 (commencing with Section 5500) is added to
Division 1 of the Revenue and Taxation Code, to read:
PART 11. Taxation of Qualified Heavy Equipment
5500. For purposes of this part, all of the following definitions
shall apply:
(a) "Rental price" means the total amount of the charge for
renting the qualified heavy equipment, excluding any separately
stated charges that are not rental charges, including, but not
limited to, separately stated charges for delivery and pickup fees,
damage waivers, environmental mitigation fees, or use taxes.
(b) (1) "Qualified heavy equipment" means any construction,
earthmoving, or industrial equipment that is mobile and rented by a
qualified renter, including attachments for the equipment or other
ancillary equipment, including, but not limited to, all of the
following:
(A) A self-propelled vehicle that is not designed to be driven on
the highway.
(B) Industrial electrical generation equipment or portable
heating, ventilating, and air-conditioning equipment.
(C) Industrial lift equipment.
(D) Industrial material equipment.
(E) Equipment used in shoring, shielding, and ground trenching.
(F) Equipment or vehicles not subject to the fee imposed pursuant
to the Vehicle License Fee Law (Part 5 (commencing with Section
10701) of Division 2).
(2) Qualified heavy equipment is mobile if the qualified heavy
equipment is not intended to be permanently affixed to real property
for the purpose of using the qualified heavy equipment for its
intended use. Qualified heavy equipment is mobile if it is intended
to be moved among worksites as needed.
(c) "Qualified renter" means a renter that satisfies all of the
following:
(1) The principal business of the renter is the rental of
qualified heavy equipment.
(2) Is engaged in a line of business described in Code 532412 of
the North American Industry Classification System published by the
United States Office of Management and Budget, 2012 edition.
(d) "Renting" or "rent" means a rental for a period of less than
365 days or for an undefined period, or an open-ended contract.
5501. (a) On and after July 1, 2016, and before July 1,
2026, there is hereby imposed a tax on every qualified renter
for the privilege of renting qualified heavy equipment in this state
at the rate of 0.75 percent of the rental price from the renting of
qualified heavy equipment.
(b) The qualified renter shall pay and remit the tax to the board
as required by this part.
(c) The board shall administer and collect the tax imposed by this
part pursuant to the Fee Collection Procedures Law (Part 30
(commencing with Section 55001) of Division 2). For purposes of this
part, the references in the Fee Collection Procedures Law to "fee"
shall include the tax imposed by this part, and references to
"feepayer" shall include a person liable for the payment of the taxes
imposed by this part and collected pursuant to that law.
5502. Every qualified renter shall register with the board. Every
application for registration shall be made upon a form prescribed by
the board and shall set forth the name under which the applicant
transacts or intends to transact business, the location of its place
or places of business, and other information as the board may
require. An application for an account shall be authenticated in a
form or pursuant to methods as may be prescribed by the board.
5503. The board may prescribe, adopt, and enforce regulations
relating to the administration and enforcement of this part,
including, but not limited to, collections, reporting, refunds, and
appeals.
5504. The taxes imposed by this part are due and payable to the
board quarterly on or before the last day of the month next
succeeding each quarterly period.
5505. (a) On or before the last day of the month following each
quarterly period of three months, a return for the preceding
quarterly period shall be filed using electronic media with the
board.
(b) The board may prescribe those forms and reporting requirements
as are necessary to implement the tax.
(c) Returns shall be authenticated in a form or pursuant to
methods as may be prescribed by the board.
5505.5. A qualified renter is relieved from liability for the tax
imposed by this part that became due and payable, insofar as the
measure of tax on the rental of qualified heavy equipment is
represented by accounts which have been found worthless and charged
off for income tax purposes. If the qualified renter has previously
paid the amount of the tax, the qualified renter may, under the rules
and regulations prescribed by the board, take as a deduction the
amount found worthless and charged of by the retailer. If any such
accounts are thereafter in whole or in part collected by the
qualified renter, the amount so collected shall be included in the
first return filed after such collection and the tax shall be paid
with the return.
5506. All revenues, interest, penalties, and other amounts
collected pursuant to this part, less refunds and the board's costs
of administration, shall be deposited in the General Fund.
5507. (a) For the 2016-17 fiscal year and for each
fiscal year thereafter, to the 2025-26 fiscal year,
inclusive, the tax imposed pursuant to this part shall be in
lieu of any property tax on qualified heavy equipment subject to
taxation pursuant to this part.
(b) Property of a qualified renter that is not subject to the tax
imposed pursuant to this part shall remain subject to any applicable
property taxes.
5508. This part shall be repealed on January 1, 2027.
SEC. 3. The repeal of Part 11 (commencing with
Section 5500) of Division 1 of the Revenue and Taxation Code by the
act adding this section shall not affect any act done or any right
accruing or accrued, or any suit or proceeding had or commenced in
any civil cause, before such repeal; but all rights and liabilities
under such law shall continue, and may be enforced in the same
manner, as if such repeal had not been made.
SEC. 3. SEC. 4. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution for certain costs that may be incurred by a
local agency or school district because, in that regard, this act
creates a new crime or infraction, eliminates a crime or infraction,
or changes the penalty for a crime or infraction, within the meaning
of Section 17556 of the Government Code, or changes the definition of
a crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.
SEC. 4. SEC. 5. Notwithstanding
Section 2229 of the Revenue and Taxation Code, no appropriation is
made by this act and the state shall not reimburse any local agency
for any property tax revenues lost by it pursuant to this act.