Bill Text: CA AB2127 | 2015-2016 | Regular Session | Enrolled

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Bill Title: Taxation: motor vehicle fuel: use fuel: alcohol fuels.

Spectrum: Bipartisan Bill

Status: (Vetoed) 2016-09-13 - Vetoed by Governor. [AB2127 Detail]

Download: California-2015-AB2127-Enrolled.html

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BILL NUMBER: AB 2127	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 16, 2016
	PASSED THE ASSEMBLY  MAY 27, 2016
	AMENDED IN ASSEMBLY  MAY 12, 2016

INTRODUCED BY   Assembly Members O'Donnell and Brough

                        FEBRUARY 17, 2016

   An act to amend, repeal, and add Sections 7318 and 8651.8 of the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2127, O'Donnell. Taxation: motor vehicle fuel: use fuel:
alcohol fuels.
   Existing law subjects fuels, including alcohol fuels, used to
propel a motor vehicle on a highway to either the Motor Vehicle Fuel
Tax Law or the Use Fuel Tax Law. Existing law subjects alcohol fuels
containing no more than 15% gasoline to the Use Fuel Tax Law at the
tax rate of 9 cents per gallon. Existing law subjects gasohol, which
includes alcohol containing more than 15% gasoline, to the Motor
Vehicle Fuel Tax Law, which through June 30, 2016, is taxed at the
rate of 30 cents per gallon.
   The Motor Vehicle Fuel Tax Law imposes a tax upon each gallon of
motor vehicle fuel removed from a refinery or terminal rack in this
state, entered into this state, or sold in this state. That law also
provides a refund to any person who buys and uses tax-paid gasoline
to produce a blended alcohol fuel of no more than 15% gasoline, which
is taxed as a use fuel.
   The Use Fuel Tax Law imposes an excise tax for the use of certain
fuels, including an alcohol fuel that is ethanol or methanol
containing not more than 15% gasoline. The tax is imposed on the user
and requires the vendor who sells and delivers the fuel into a fuel
tank of the user to collect the tax and give the user a receipt.
   This bill instead, until January 1, 2022, would change the
gasoline content percentage in both laws to 18 percent. By increasing
the allowable percentage of gasoline in alcohol fuels subject to the
Use Fuel Tax Law, this bill additionally would subject to that tax,
users of alcohol fuels that contain more than 15% and not more than
18% gasoline.
   This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
   This bill would take effect immediately as a tax levy.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 7318 of the Revenue and Taxation Code is
amended to read:
   7318.  (a) "Gasohol" means all blends of gasoline, and alcohol
containing more than 18 percent gasoline.
   (b) This section shall become inoperative and shall be repealed on
January 1, 2022.
  SEC. 2.  Section 7318 is added to the Revenue and Taxation Code, to
read:
   7318.  (a) "Gasohol" means all blends of gasoline, and alcohol
containing more than 15 percent gasoline.
   (b) This section shall become operative on January 1, 2022.
  SEC. 3.  Section 8651.8 of the Revenue and Taxation Code is amended
to read:
   8651.8.  (a) Notwithstanding Section 8651, the excise tax imposed
upon ethanol or methanol containing not more than 18 percent gasoline
or diesel fuels shall be one-half the rate prescribed by Section
8651 for each gallon of fuel used.
   (b) All references in this code to Section 8651 shall be deemed,
with respect to the rate imposed upon ethanol or methanol, to also
refer to this section.
   (c) This section shall become inoperative and shall be repealed on
January 1, 2022.
  SEC. 4.  Section 8651.8 is added to the Revenue and Taxation Code,
to read:
   8651.8.  (a) Notwithstanding Section 8651, the excise tax imposed
upon ethanol or methanol containing not more than 15 percent gasoline
or diesel fuels shall be one-half the rate prescribed by Section
8651 for each gallon of fuel used.
   (b) All references in this code to Section 8651 shall be deemed,
with respect to the rate imposed upon ethanol or methanol, to also
refer to this section.
   (c) This section shall become operative on January 1, 2022.
  SEC. 5.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.