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


SECTION 1.
(a) The Legislature finds and declares:
(1) California’s complex freight transportation system is responsible for one-third of the state’s economy and jobs, with freight-dependent industries accounting for over $700 billion in revenue and over 5 million jobs in 2013, and is home to the largest gateway for international trade and domestic commerce in the nation, with an interconnected system of ports, railroads, highways, and roads that allow goods from around the world to move throughout the state.
(2) Significant investments in freight inssions technology at California’s public seaports and to eliminate taxes imposed on the purchase of that equipment that further increase the costs of purchasing and maintaining zero-emission equipment and supporting infrastructure, which are already of significantly greater expense than conventional equipment and infrastructure.
SEC. 2.
Section 6377.5 is added to the Revenue and Taxation Code, to read:
6377.5.
(a) On or after January 1, 2017, and before January 1, 2030, there are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, any of the following:
(1) Qualified tangible personal property purchased for use by a qualified person to be used primarily in, at, or on a marine terminal of a California public port for carriage, handling, or movement of freight, cargo, and goods.
(2) Qualified tangible personal property purchased for use by a qualified person to be used primarily to maintain, repair, measure, or test any qualified tangible personal property described in paragraph (1).
(b) For purposes of this section:
(1) “Primarily” means 50 percent or more of the time.
(2) “Qualified person” means a person that is a stevedore, marine terminal operator, operator of a
port
port, rail ramp, rail yard, intermodal facility,
or freight yard, or any other person that is engaged in cargo and freight loading, delivery, movement, storage, and conveyance at or within a California public seaport.
(3) “Qualified tangible personal property” includes both of the following:
(A) All zero-emission or near-zero-emission equipment used in conjunction with the movement of goods or freight, including, but not limited to, computers, data-processing equipment, and computer software, required to operate, control, regulate, or maintain the zero-emission or near-zero-emission equipment, together with all repair and replacement parts with a useful life of one or more years therefor, whether purchased separately or in conjunction with the equipment and regardless of whether the machine or component parts are assembled by the qualified person or another party.
(B) Special purpose buildings and foundations used as an integral part of the process of utilization of zero-emission equipment or near-zero-emission equipment constitute qualified tangible personal property to the extent that the sale of, or storage, use, or other consumption is subject to the imposition of sales or use tax.
(4) “Zero-emission or near-zero-emission equipment” means equipment,
off-road
vehicles, and related technologies used
at a
within the boundaries of a
California public seaport that reduce or eliminate greenhouse gas emissions and improve air quality when compared with conventional or fully commercialized alternatives, as identified by the State Air Resources Board in consultation with the State Energy Resources Conservation and Development Commission. “Zero-emission and near-zero-emission equipment” may include, but is not limited to, enabling technologies that provide a pathway to emission reductions, advanced or alternative fuel engines, and hybrid or alternative fuel technologies for seaport equipment.
(c) An exemption shall not be allowed under this section unless the purchaser furnishes the retailer with an exemption certificate, completed in accordance with any instructions or regulations as the board may prescribe, and the retailer retains the exemption certificate in its records and furnishes it to the board upon request.
(d) (1) Notwithstanding the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)) and the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)), the exemption established by this section shall not apply with respect to any tax levied by a county, city, or district pursuant to, or in accordance with, either of those laws.
(2) Notwithstanding subdivision (a), the exemption established by this section shall not apply with respect to any tax levied pursuant to Section 6051.2 or 6201.2, pursuant to Sections 35 and 36 of Article XIII of the California Constitution, or any tax levied pursuant to Sections 6051 or 6201 that is deposited in the State Treasury to the credit of the Local Revenue Fund 2011 pursuant to Sections 6051.15 or 6201.15.
(e) Notwithstanding subdivision (a), the exemption provided by this section shall not apply to any sale or storage, use, or other consumption of property that, within one year from the date of purchase, is removed from California, converted from an exempt use under subdivision (a) to some other use not qualifying for exemption, or otherwise used in a manner not qualifying for exemption.
(f) This section shall apply to leases of qualified tangible personal property classified as “continuing sales” and “continuing purchases” in accordance with Sections 6006.1 and 6010.1. The exemption established by this section shall apply to the rentals payable pursuant to the lease, provided the lessee is a qualified person and the tangible personal property is qualified tangible personal property used in an activity described in subdivision (a).
(g) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of exemptions that will be taken for each calendar year, or any portion thereof, for which this section provides an exemption.
(2) No later than each March 1 next following a calendar year for which this section provides an exemption, the board shall provide to the Joint Legislative Budget Committee a report of the total dollar amount of exemptions taken under this section for the immediately preceding calendar year. The report shall compare the total dollar amount of exemptions taken under this section for that calendar year with the department’s estimate for that same calendar year. If that total dollar amount taken is less than the estimate for that calendar year, the report shall identify options for increasing exemptions taken so as to meet estimated amounts.
SEC. 3.
This act provides for a tax levy within the meaning of Article IV of the
California
Constitution and shall go into immediate effect.
Existing sales and use tax laws impose 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, and provides various exemptions from those taxes.
The bill would exempt from those taxes, on and after January 1, 2017, and before January 1, 2030, the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased by a qualified person, as defined, for use primarily in, at, or on a marine terminal or qualified tangible personal property used primarily to maintain, repair, or test the above-described equipment, as provided. The bill would require the purchaser to furnish the retailer with an exemption certificate, as specified.
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 in conformity with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Exemptions from state sales and use taxes are incorporated into these laws.
This bill would specify that this exemption does not apply to local sales and use taxes, transactions and use taxes, and specified state taxes from which revenues are deposited into the Local Public Safety Fund, the Education Protection Account, the Local Revenue Fund, or the Local Revenue Fund 2011.
This bill would take effect immediately as a tax levy.
An act to add Section 6377.5 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.