Decarbonizing Fuels Incentive.

Existing law, the Use Fuel Tax Law (UFTL) , imposes a state excise tax on the use of fuel, as defined, at specified rates. This bill would establish in the state treasury the Carbon Neutrality Fund, and would require, for taxable years beginning on or after January 1, 2023, and before January 1, 2029, the California Department of Tax and Fee Administration to pay annually from the fund an incentive payment to a qualified taxpayer on a first-come-first-served basis, as prescribed. The bill would, among other things, require the incentive payment for a taxable year to be an amount equal to the applicable amount, as determined based on the carbon intensity of a transportation fuel, multiplied by the number of diesel gallons equivalent or gasoline gallons equivalent of qualified liquid or gaseous transportation fuel sold by the qualified taxpayer during a taxable year, reported as prescribed. The bill would prohibit the incentive payment in a taxable year from exceeding the amount of tax paid by the qualified taxpayer pursuant to the UFTL in that taxable year and would prohibit the aggregate amount of incentive payments in a taxable year from exceeding $500,000,000.