SB 1135

Bill Subjects

Abstract

Existing law, the California Global Warming Solutions Act of 2006, designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include in its regulation of those emissions the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund. Existing law continuously appropriates the annual proceeds of the fund to the various purposes. This bill, in the 2025–26 fiscal year through the 2035–36 fiscal year, would transfer 1% of the annual proceeds of the Greenhouse Gas Reduction Fund, not to exceed $120,000,000 per fiscal year, to the California Compost Tax Credit Fund, which the bill would establish. Existing law, the Personal Income Tax Law and the Corporation Tax Law, allows various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2036, would allow a credit against those taxes for each taxable year to a qualified taxpayer in an amount equal to amounts paid or incurred during the taxable year for the application of compost on agricultural lands, ranchlands, or rangelands to improve soils, sequester carbon, and reduce greenhouse gas emissions. The bill would require the Department of Food and Agriculture to allocate the credits to qualified taxpayers through an application process, as specified, and would limit the aggregate amount of credits allocated per fiscal year to the amount appropriated from the Greenhouse Gas Reduction Fund to the California Compost Tax Credit Fund, minus specified distributions, as provided. This bill would require the moneys from the California Compost Tax Credit Fund to be used for the purpose of refunding the General Fund for tax revenue lost due to the credits claimed and would continuously appropriate moneys in the fund to the Department of Food and Agriculture for refunds to qualified taxpayers whose credit exceeds their tax liability, as provided. This bill would additionally continuously appropriate up to 20% of moneys in the California Compost Tax Credit Fund, not to exceed $24,000,000 per fiscal year, for existing composting infrastructure grant programs and existing healthy soils programs, as specified. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. This bill would also make findings and declarations related to a gift of public funds.