California Senate Bill SB295 Amended / Bill

 BILL NUMBER: SB 295AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 24, 2015 INTRODUCED BY Senator  De Len   Jackson   (   Principal coauthor:   Assembly Member  Williams   )  FEBRUARY 23, 2015  An act to amend Sections 17053.86 and 23686 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.   An act to amend Section 51013.5 of, and to add Section 51015.1 to, the Government Code, relating to pipeline safety.  LEGISLATIVE COUNSEL'S DIGEST SB 295, as amended,  De Len   Jackson  .  College Access Tax Credit Fund.   Pipeline safety: inspections.   Under the Elder California Pipeline Safety Act of 1981, the State Fire Marshal exercises safety regulatory jurisdiction over intrastate pipelines used for the transportation of hazardous or highly volatile liquid substances. The act authorizes the State Fire Marshal to exercise safety regulatory jurisdiction over portions of interstate pipelines located within the state and subject to an agreement between the United States Secretary of Transportation and the State Fire Marshal. The act requires those pipelines over 10 years of age to be hydrostatically tested every 3 or 5 years, as provided, except that high-risk pipelines, as designated by the State Fire Marshall, are to be tested every 2 years or annually, as provided.   This bill would require the State Fire Marshal, or an officer or employee authorized by the State Fire Marshal, to annually inspect all operators of intrastate pipelines under the jurisdiction of the State Fire Marshal. The bill would require pipelines over 5 years of age to be hydrostatically tested every 2 or 3 years, as provided, and would require all designated high-risk pipelines to be tested annually. The bill would require the State Fire Marshall, to the maximum extent possible, to become an inspection agent by entering into an agreement with the federal Pipeline and Hazardous Materials Safety Administration, as specified. The bill would require the State Fire Marshall to revise specified fees assessed to cover the costs associated with this measure. The bill would also delete obsolete provisions.   The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including, for taxable years beginning on or after January 1, 2014, and before January 1, 2017, a credit equal to a certain percentage of a contribution to the College Access Tax Credit Fund for specified education purposes, as provided.   This bill would extend the allowance of these credits to taxable years beginning before January 1, 2018.   This bill would take effect immediately as a tax levy.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 51013.5 of the   Government Code   is amended to read:  51013.5. (a) Every newly constructed pipeline, existing pipeline, or part of a pipeline system that has been relocated or replaced, and every pipeline that transports a hazardous liquid substance or highly volatile liquid substance, shall be tested in accordance with Subpart E (commencing with Section 195.300) of Part 195 of Title 49 of the Code of Federal Regulations. (b) Every pipeline not provided with properly sized automatic pressure relief devices or properly designed pressure limiting devices shall be hydrostatically tested annually. (c) Every pipeline over  10   five  years of age and not provided with effective cathodic protection shall be hydrostatically tested every  three   two  years, except for those on the State Fire Marshal's list of higher risk pipelines, which shall be hydrostatically tested annually. (d) Every pipeline over  10   five  years of age and provided with effective cathodic protection shall be hydrostatically tested every  five   three  years, except for those on the State Fire Marshal's list of higher risk pipelines which shall be hydrostatically tested  every two years.   annually.  (e) Piping within a refined products bulk loading facility served by pipeline shall be tested hydrostatically at 125 percent of maximum allowable operating pressure utilizing the product ordinarily transported in that piping if that piping is operated at a stress level of 20 percent or less of the specified minimum yield strength of the pipe. The frequency for pressure testing these pipelines shall be every five years for those pipelines with effective cathodic protection and every three years for those pipelines without effective cathodic protection. If that piping is observable, visual inspection may be the method of testing.  (f) Beginning on July 1, 1990, and continuing until the regulations adopted by the State Fire Marshal pursuant to subdivision (g) take effect, each pipeline within the State Fire Marshal's jurisdiction which satisfies any of the following sets of criteria shall be placed on the State Fire Marshal's list of higher risk pipelines until five years pass without a reportable leak due to corrosion or defect on that pipeline. Initially, pipelines on that list shall be tested by the next scheduled test date, or within two years of being placed on the list, whichever is first. On July 1, 1990, pipeline operators shall provide the State Fire Marshal with a list of all their pipelines which satisfy the criteria in this subdivision as of July 1, 1990. If any pipeline becomes eligible for the list of higher risk pipelines after that date, the pipeline company shall report that fact to the State Fire Marshal within 30 days, and the pipeline shall be placed on the list retroactively to the date on which it became eligible for listing. Pipelines which are found to belong on the list, but are not so reported by the operator to the State Fire Marshal, shall be placed on the list retroactively. Operators failing to properly report their pipelines shall be subject to penalties under Section 51018.6. Pipelines not covered under the risk criteria developed pursuant to subdivision (g) shall be deleted from the list when regulations are adopted pursuant to that subdivision. For purposes of this subdivision, a leak which is traceable to an external force, but for which corrosion is partly responsible, shall be deemed caused by corrosion, "defect" refers to manufacturing or construction defects, and "leak" or "reportable leak" means a rupture required to be reported pursuant to Section 51018. As long as all pipelines are tested in their entirety at least as frequently as standard risk pipelines under subdivisions (c) and (d), it shall suffice for additional tests on higher risk pipelines to cover 20 pipeline miles in all directions along an operator's pipeline from the position of the leak or leaks which led to the inclusion or retention of that pipeline on the higher risk list. The interim list shall include pipelines which meet any of the following criteria:   (1) Have suffered two or more reportable leaks, not including leaks during a certified hydrostatic pressure test, due to corrosion or defect in the prior three years.   (2) Have suffered three or more reportable leaks, not including leaks during a certified hydrostatic pressure test, due to corrosion, defects, or external forces, but not all due to external forces, in the prior three years.   (3) Have suffered a reportable leak, except during a certified hydrostatic pressure test, due to corrosion or defect of more than 50,000 gallons, or 10,000 gallons in a standard metropolitan statistical area, in the prior three years; or have suffered a leak due to corrosion or defect which the State Fire Marshal finds has resulted in more than 42 gallons of a hazardous liquid within the State Fire Marshal's jurisdiction entering a waterway in the prior three years; or have suffered a reportable leak of a hazardous liquid with a flashpoint of less than 140 degrees Fahrenheit, or 60 degrees centigrade, in the prior three years.   (4) Are less than 50 miles long, and have experienced a reportable leak, except during a certified hydrostatic pressure test, due to corrosion or a defect in the prior three years. For the purposes of this paragraph, the length of a pipeline with more than two termini shall be the longest distance between two termini along the pipeline.   (5) Have experienced a reportable leak in the prior five years due to corrosion or defect, except during a certified hydrostatic pressure test, on a section of pipe more than 50 years old. For pipelines which fall in this category, and no other category of higher risk pipeline, additional tests required by this subdivision shall be required only on segments of the pipe more than 50 years old as long as all pipe more than 50 years old which is within 20 pipeline miles from the leak in all directions along an operator's pipeline is tested.   (g)   (f)  The State Fire Marshal shall study indicators and precursors of serious pipeline accidents, and, in consultation with the Pipeline Safety Advisory Committee, shall develop criteria for identifying which hazardous liquid pipelines pose the greatest risk to people and the environment due to the likelihood of, and likely seriousness of, an accident due to corrosion or defect. The study shall give due consideration to research done by the industry, the federal government, academia, and to any other information which the State Fire Marshal shall deem relevant, including, but not limited to, recent leak history, pipeline location, and materials transported. Beginning January 1, 1992, using the criteria identified in that study, the State Fire Marshal shall maintain a list of higher risk pipelines, which exceed a standard of risk to be determined by the State Fire Marshal, and which shall be tested as required in subdivisions (c) and (d) as long as they remain on the list.  By January 1, 1992, after public hearings, the State Fire Marshal shall adopt regulations to implement this subdivision.   (h)   (g)  In addition to the requirements of subdivisions (a) to (e), inclusive, the State Fire Marshal may require any pipeline subject to this chapter to be subjected to a pressure test, or any other test or inspection, at any time, in the interest of public safety.  (i)   (h)  Test methods other than the hydrostatic tests required by subdivisions (b), (c), (d), and (e), including inspection by instrumented internal inspection devices, may be approved by the State Fire Marshal on an individual basis. If the State Fire Marshal approves an alternative to a pressure test in an individual case, the State Fire Marshal may require that the alternative test be given more frequently than the testing frequencies specified in subdivisions (b), (c), (d), and (e).  (j)   (i)  The State Fire Marshal shall adopt regulations  before January 1, 1992,  to establish what the State Fire Marshal deems to be an appropriate frequency for tests and inspections, including instrumented internal inspections, which, when permitted as a substitute for tests required under subdivisions (b), (c), and (d), do not damage pipelines or require them to be shut down for the testing period. That testing shall in no event be less frequent than is required by subdivisions (b), (c), and (d). Each time one of these tests is required on a pipeline, it shall be approved on the same individual basis as under subdivision  (i).   (h).  If it is not approved, a hydrostatic test shall be carried out at the time the alternative test would have been carried out, and subsequent tests shall be carried out in accordance with the time intervals prescribed by subdivision (b), (c), or (d), as applicable.  SEC. 2.   Section 51015.1 is added to the   Government Code   , to read:   51015.1. (a) The State Fire Marshal, or an officer or employee authorized by the State Fire Marshal, shall annually inspect all operators of intrastate pipelines under the jurisdiction of the State Fire Marshal to ensure compliance with applicable laws and regulations. (b) For portions of interstate pipelines that are not under the jurisdiction of the State Fire Marshal pursuant to Section 51010.6, the State Fire Marshal shall, to the maximum extent possible, become an inspection agent through entering into an interstate inspection agent agreement with the federal Pipeline and Hazardous Materials Safety Administration. (c) The State Fire Marshall shall revise the fee assessed pursuant to Section 51019 to a level sufficient to cover the costs associated with the implementation of this section and Section 51013.5, as amended by the act adding this section.   SECTION 1.  Section 17053.86 of the Revenue and Taxation Code is amended to read: 17053.86. (a) (1) For each taxable year beginning on or after January 1, 2014, and before January 1, 2018, there shall be allowed as a credit against the "net tax," as defined in Section 17039, an amount equal to the following: (A) For each taxable year beginning on and after January 1, 2014, and before January 1, 2016, 60 percent of the amount contributed by the taxpayer for the 2014 or 2015 taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority. (B) For each taxable year beginning on and after January 1, 2016, and before January 1, 2017, 55 percent of the amount contributed by the taxpayer for the 2016 taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority. (C) For each taxable year beginning on and after January 1, 2017, and before January 1, 2018, 50 percent of the amount contributed by the taxpayer for the 2017 taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority. (2) Contributions shall be made only in cash. (b) (1) The aggregate amount of credit that may be allocated and certified pursuant to this section and Section 23686 shall be an amount equal to the sum of all of the following: (A) Five hundred million dollars ($500,000,000) in credits for the 2014 calendar year and each calendar year thereafter. (B) The amount of previously unallocated and uncertified credits. (2) (A) For purposes of this section, the California Educational Facilities Authority shall do all of the following: (i) On or after January 1, 2014, and before January 1, 2018, allocate and certify tax credits to taxpayers under this section. (ii) Establish a procedure for taxpayers to contribute to the College Access Tax Credit Fund and to obtain from the California Educational Facilities Authority a certification for the credit allowed by this section. The procedure shall require the California Educational Facilities Authority to certify the contribution amount eligible for credit within 45 days following receipt of the contribution. (iii) Provide to the Franchise Tax Board a copy of each credit certificate issued for the calendar year by March 1 of the calendar year immediately following the year in which those certificates are issued. (B) (i) The California Educational Facilities Authority shall adopt any regulations necessary to implement this paragraph. (ii) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any regulation adopted by the California Educational Facilities Authority pursuant to clause (i). (c) (1) 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 five years if necessary, until the credit is exhausted. (2) A deduction shall not be allowed under this part for amounts taken into account under this section in calculating the credit allowed by this section. (d) (1) The College Access Tax Credit Fund is hereby created as a special fund in the State Treasury. All revenue in this special fund shall be allocated as follows: (A) First to the General Fund in an amount equal to the aggregate amount of certified credits allowed pursuant to this section and Section 23686 for the taxable year. Funds allocated to the General Fund shall be considered General Fund revenues for purposes of Sections 8 and 8.5 of Article XVI of the California Constitution. (B) Second, upon appropriation, as follows: (i) To the Franchise Tax Board, the California Educational Facilities Authority, the Controller, and the Student Aid Commission for reimbursement of all administrative costs incurred by those agencies in connection with their duties under this section, Section 23686, and Section 69432.7 of the Education Code. (ii) To the Student Aid Commission for purposes of awarding Cal Grants to students pursuant to Section 69431.7 of the Education Code. (2) The tax credit allowed by subdivision (a) of this section and subdivision (a) of Section 23686 for donations to the College Access Tax Credit Fund shall be known as the College Access Tax Credit. (e) This section shall remain in effect only until December 1, 2018, and as of that date is repealed.   SEC. 2.   Section 23686 of the Revenue and Taxation Code is amended to read: 23686. (a) (1) For each taxable year beginning on or after January 1, 2014, and before January 1, 2018, there shall be allowed as a credit against the "tax," as defined in Section 23036, an amount equal to the following: (A) For each taxable year beginning on and after January 1, 2014, and before January 1, 2016, 60 percent of the amount contributed by the taxpayer for the 2014 or 2015 taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority. (B) For each taxable year beginning on and after January 1, 2016, and before January 1, 2017, 55 percent of the amount contributed by the taxpayer for the 2016 taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority. (C) For each taxable year beginning on and after January 1, 2017, and before January 1,2018, 50 percent of the amount contributed by the taxpayer for the 2017 taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority. (2) Contributions shall be made only in cash. (b) (1) The aggregate amount of credit that may be allocated and certified pursuant to this section and Section 17053.86 shall be an amount equal to the sum of all of the following: (A) Five hundred million dollars ($500,000,000) in credits for the 2014 calendar year and each calendar year thereafter. (B) The amount of previously unallocated and uncertified credits. (2) (A) For purposes of this section, the California Educational Facilities Authority shall do all of the following: (i) On or after January 1, 2014, and before January 1, 2018, allocate and certify tax credits to taxpayers under this section. (ii) Establish a procedure for taxpayers to contribute to the College Access Tax Credit Fund and to obtain from the California Educational Facilities Authority a certification for the credit allowed by this section. The procedure shall require the California Educational Facilities Authority to certify the contribution amount eligible for credit within 45 days following receipt of the contribution. (iii) Provide to the Franchise Tax Board a copy of each credit certificate issued for the calendar year by March 1 of the calendar year immediately following the year in which those certificates are issued. (B) (i) The California Educational Facilities Authority shall adopt any regulations necessary to implement this paragraph. (ii) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any regulation adopted by the California Educational Facilities Authority pursuant to clause (i). (c) (1) In the case where the credit allowed by this section exceeds the "tax," the excess may be carried over to reduce the "tax" in the following year, and succeeding five years if necessary, until the credit is exhausted. (2) A deduction shall not be allowed under this part for amounts taken into account under this section in calculating the credit allowed by this section. (d) This section shall remain in effect only until December 1, 2018, and as of that date is repealed.   SEC. 3.   This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.