California Assembly Bill AB1374

California 2017-2018 Regular Session

• Introduced: 2/17/17
• Refer: 3/13/17
• Failed: 2/1/18

Caption

Diesel taxes: biofuel.

Impact

By limiting the claims for tax refunds for biodiesel to only those complying with the new standards, AB 1374 would likely increase tax revenue from diesel, directly impacting both taxpayers and the biofuel industry. As a change that results in a higher tax classification within the context of California's constitutional tax law, it will necessitate a two-thirds legislative majority for passage. This emphasizes the bill's anticipated impact on taxpayers and the potential for increased revenue that could then be allocated for broader environmental initiatives or infrastructure projects.

Summary

Assembly Bill 1374, introduced by Assembly Member Salas, seeks to amend the Diesel Fuel Tax Law by redefining biodiesel and adjusting the tax implications associated with it. This bill establishes a more stringent definition of biodiesel as a fuel derived from specific vegetable oils or animal fats that must conform to certain ASTM standards. The purpose of this amendment is to ensure that only fuels meeting stringent quality criteria benefit from tax provisions previously afforded under existing law, thereby aiming to enhance the integrity of biofuel incentives and improve environmental outcomes for diesel fuel use in California.

Contention

The bill's introduction has raised notable points of contention, particularly among stakeholders in the biofuel industry. Proponents argue that the updated standards will prevent subpar biodiesel from being marketed as a renewable fuel, thereby protecting consumers and incentivizing the production of truly sustainable fuel sources. Critics, however, may contend that these more stringent definitions and tax implications could hinder small biodiesel producers who struggle to meet the new requirements, potentially leading to reduced competition and fewer options for consumers seeking renewable fuel alternatives.