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2006 Legislative Session: 2nd Session, 38th Parliament

FIRST READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

HONOURABLE CAROLE TAYLOR

MINISTER OF FINANCE

BILL 2 – 2006

BUDGET MEASURES IMPLEMENTATION ACT, 2006

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Home Owner Grant Act

Section 1 of the Home Owner Grant Act, R.S.B.C. 1996, c. 194, is amended by adding the following definition:

"threshold amount" means the amount prescribed under

section 18 (2) (f).

2 Sections 2 (3), 3 (4), 4 (4) and 5 (4) are amended by striking out " $685 000 " in both places and substituting " the threshold amount ".

Section 18 is amended

(

a) in subsection (2) by adding the following paragraph:

(

f) prescribe an amount as the threshold amount for the purposes of sections 2 (3), 3 (4), 4 (4) and 5 (4). , and

(

b) by repealing subsection (3) and substituting the following:

(3) If made before December 31 in any year, regulations under subsection (2) may be made retroactive to January 1 of that year, and if made retroactive are deemed to have come into force on that date.

Schedule 1 is amended by striking out " $820 " in both places and substituting " $920 " and by striking out " $470 " and substituting " $570 ".

Schedule 2 is amended by striking out " $845 " in both places and substituting " $945 " and by striking out " $745 " and substituting " $845 ".

Income Tax Act

Section 4.5 (1) of the Income Tax Act, R.S.B.C. 1996, c. 215, is amended in the description of D by striking out " $5 000 " and substituting " $10 000 ".

Section 4.721 (1) is amended by repealing paragraph (

a) of the definition of "BC flow-through mining expenditure " and substituting the following:

(

a) would be a flow-through mining expenditure, of an individual, as defined in

section 127 (9) of the federal Act if

(

i) a reference in that definition to "October 17, 2000" were read as a reference to "July 30, 2001", and

(ii) a reference in that definition to "2006" were read as a reference to "2009", and .

Section 25.1 (1) is amended in paragraph (f.2) of the definition of "excluded expense"

(

a) in subparagraph (

i) by striking out " January 1, 2006 " and substituting " January 1, 2009 ", and

(

b) in subparagraph (ii) by striking out " after December 31, 2005 and before January 1, 2007 " and substituting " after December 31, 2008 and before January 1, 2010 ".

Section 47 is amended by adding the following subsection:

(3) Despite subsection (1), the time periods set out in sections 4.721 (5), 25.1 (7), 85 (2), 103 (2), 110 (2) and 114 (2) of this Act must not be extended.

Section 80 (5) is amended

(

a) in paragraph (

a) by striking out " April 1, 2006 " and substituting " April 1, 2008 ", and

(

b) by repealing paragraph (d).

Section 82.1 (6) (

a) is amended by striking out " April 1, 2006 " and substituting " June 1, 2008 ".

International Financial Activity Act

Section 19 (1) of the International Financial Activity Act, S.B.C. 2004, c. 49, is amended

(

a) by striking out " adjusted interest + ", and

(

b) by striking out the description of " adjusted interest ".

Mineral Tax Act

Section 8 of the Mineral Tax Act , R.S.B.C. 1996, c. 291, is amended by adding the following subsection:

(8) If an operator of a mine sells a mineral product from the mine to a related person operating the same mine to enable the related person to fulfill a pre-existing contract with a third party and the pre-existing contract price is greater than the price paid or payable by the related person, the operator's proportionate share of the transaction value of the mineral product for the purpose of subsection (1) (

a) must be determined in accordance with the following formula:

proportionate share = transaction value x

purchased mineral produce

total minteral produce

where:

transaction value

the transaction value for the mineral product disposed of by the related person to the third party, calculated under subsections (4) to (7);

purchased mineral product

the quantity of the mineral product produced from the mine that was purchased by the related person from the operator and was sold by the related person to the third party under the pre-existing contract;

total mineral product

the total quantity of the mineral product produced from the mine and sold to the third party by the related person under the pre-existing contract.

Motor Fuel Tax Act

Section 1 of the Motor Fuel Tax Act , R.S.B.C. 1996, c. 317, is amended in the

definitions of "marine diesel fuel" and "motive fuel" by adding " or biodiesel fuel " after " diesel fuel " wherever it appears.

Section 13 (1) and (2) is amended by striking out " 12 ".

Section 15 (1) is amended

(

a) by striking out " Subject to

section 15.1, a " and substituting " A ",

(

b) by repealing paragraph (i.1),

(

c) in paragraph (

k) by striking out " (i.1) " in both places and substituting " (m) ", and

(

d) by adding the following paragraph:

(

m) a motor vehicle that is not licensed to operate on a highway.

Section 15.1 is repealed.

Section 45.3 (1) is amended by striking out " or 15.1 ".

Property Transfer Tax Act

Section 14 of the Property Transfer Tax Act , R.S.B.C. 1996, c. 378, is amended

(

a) in subsection (1) by repealing paragraph (

c) of the definition of "family farm" and substituting the following:

(

c) for the purpose of an exemption claimed under subsection (3) (c), (c.1), (c.2), (d), (d.1) or (d.2) or subsection (4) (p.22) (ii) (B), was used, owned and farmed by the settlor or the deceased; ,

(

b) in subsection (1) by repealing the definition of "family farm corporation" and substituting the following:

"family farm corporation" means a corporation of which

(

a) the principal activity is farming farm land, and

(

b) no shareholder is a corporation; ,

(

c) in subsection (1) by repealing paragraph (a) (ii) of the definition of "recreational residence" and substituting the following:

(ii) if an exemption is claimed under subsection (3) (

c) or (

d) or subsection (4) (p.21) (iii) (B), the settlor or the deceased usually resided on a seasonal basis for recreational purposes, ,

(

d) in subsection (3) (c.2) (ii) (

C) by striking out " the deceased; " and substituting " the deceased, and ",

(

e) by repealing subsection (4) (p.2) and substituting the following:

(p.2) a transfer to the Public Guardian and Trustee, if

(

i) the land transferred is to be held in trust by the Public Guardian and Trustee for the sole benefit of a minor,

(ii) the minor is a related individual of

(

A) the transferor, or

(

B) the person whose estate is the transferor, and

(iii) the land transferred was

(

A) the principal residence of the transferor,

(

B) the principal residence of the person whose estate is the transferor, or

(

C) the principal residence of the minor;

(p.21) a transfer to the Public Guardian and Trustee, if

(

i) the land transferred is to be held in trust by the Public Guardian and Trustee for the sole benefit of a minor,

(ii) the minor is a related individual of

(

A) the transferor, or

(

B) the person whose estate is the transferor, and

(iii) the land transferred was

(

A) a recreational residence of the transferor, or

(

B) the recreational residence of the person whose estate is the transferor;

(p.22) a transfer to the Public Guardian and Trustee, if

(

i) the land transferred is to be held in trust by the Public Guardian and Trustee for the sole benefit of a minor,

(ii) the minor is a related individual, or a sibling or a spouse of a sibling, of

(

A) the transferor, or

(

B) the person whose estate is the transferor, and

(iii) the land transferred was a family farm; ,

(

f) in subsection (4) by adding the following paragraph:

(

w) a transfer referred to in paragraph (

f) of the definition of "taxable transaction", if

(

i) the amalgamation was effected under

section 17 of the Society Act , and

(ii) at the request of the administrator and within the time period specified by the administrator, the new society files with the administrator a certificate of incorporation respecting the amalgamation. , and

(

g) by repealing subsection (5) and substituting the following:

(5) For the purposes of an exemption under subsection (3) (

c) or (

d) or subsection (4) (p.21), no more than one recreational residence may be claimed in respect of the deceased's estate or, as the case may be, the trust referred to in subsection (3) (d).

Section 15 (1) and (3) is amended by adding " or (4) (p.2) " after " 14 (3) (

b) to (e) ".

Social Service Tax Act

Section 1 of the Social Service Tax Act , R.S.B.C. 1996, c. 431, is amended

(

a) in the definition of "software" by striking out " or modifications to such programs " and " or modifications ", by repealing paragraph (

a) and by striking out " paragraph (a), (

b) or (c) " and substituting " paragraph (

b) or (c) ", and

(

b) by adding the following

definitions:

"short term rental vehicle" means a vehicle used, during a vehicle licence year, as prescribed by regulation;

"vehicle licence year" means the period beginning on a date on which a licence is issued for a vehicle and ending on the expiry date for the licence established on that licensing date; .

Section 1 is amended in the definition of "tangible personal property" by striking out " and " at the end of paragraph (c), by adding " , and " at the end of paragraph (

d) and by adding the following paragraph:

(

e) heat; .

23 Sections 6 (3), 10 (1) (b), 20 (1) (

b) and 37 (2) (

b) are amended

(

a) by striking out " $49 000 " in both places and substituting " $55 000 ",

(

b) by striking out " $50 000 " in both places and substituting " $56 000 ", and

(

c) by striking out " $51 000 " in both places and substituting " $57 000 ".

Section 9 (2) (

a) and (

b) is amended by striking out "

section 73 " and substituting "

section 73 (1) ".

Section 20 is amended

(

a) in subsection (1) by striking out " Subject to subsection (3) " and substituting " Subject to this

section ",

(

b) in subsection (1) (

a) by striking out " or multijurisdictional vehicle ", and

(

c) by adding the following subsection:

(4) Subsection (1) does not apply to a multijurisdictional vehicle, other than a short term rental vehicle.

Section 28 is amended by repealing the definition of "vehicle licence year" .

27 The following

section is added:

Refund for short term rental vehicles

33.3

(1) This

section applies to a short term rental vehicle that

(

a) is a multijurisdictional vehicle because it is licensed to travel in British Columbia under a licence to which a prorating agreement under

section 10 of the Commercial Transport Act applies, and

(

b) during a vehicle licence year is leased primarily for the purpose of the lessees transporting goods.

(2) On application and on receipt of evidence satisfactory to the commissioner, the commissioner may provide a refund of the tax paid under this Division on the short term rental vehicle in respect of a licence year if tax was collected as required under

section 20 on its leasing during the licence year.

(3) A refund under subsection (2) may be paid out of the consolidated revenue fund.

Section 38 (2) is amended by striking out "

section 73 " in both places and substituting "

section 73 (1) ".

Section 66 is amended by repealing the definition of "pneumatic tire" .

Section 67 is amended

(

a) by repealing subsection (1),

(

b) in subsection (3) by striking out " a new pneumatic tire or ", and

(

c) by repealing subsections (4) and (5) and substituting the following:

(4) For the purposes of this section,

(

a) any sale of tangible personal property to which one or more new lead-acid batteries are attached, or in connection with which one or more new lead-acid batteries are supplied, is a sale of each of the new lead-acid batteries, and

(

b) a lead-acid battery is to be considered as new from the time of its manufacture until immediately after its acquisition at its first retail sale anywhere.

(5) A person who

(

a) acquired, in British Columbia, a new lead-acid battery in a transaction in which a levy was not payable under this section, and

(

b) becomes, for any period, a user of that battery

is deemed, at the time the person becomes a user, to be a purchaser at the first retail sale of that battery and must pay the appropriate levy under this section.

Section 76 (1) is amended by adding the following paragraphs:

(j.1) software that is

(

i) referred to in paragraph (

b) or (

c) of the definition of "software",

(ii) sold by a person who retains no rights or interests in the software, and

(iii) sold as part of a business sold as a going concern;

(j.2) software that

(

i) is referred to in paragraph (j.1) (ii) and (iii),

(ii) was modified in a manner that involved changes to the source code, and

(iii) was modified solely to meet the requirements of a specific person and

(

A) the purchase price or lease price, as applicable, of the modifications was separate from that of the unmodified software, and

(

B) the purchase price or lease price of the modifications was greater than the purchase price or lease price, as applicable, of the software in its unmodified form; .

Section 88 (a) (

i) and (ii) is amended by striking out "

section 73 " and substituting "

section 73 (1) ".

33 The following

section is added:

Hybrid electric buses

90.3

(1) In this section, "passenger bus" , "shuttle bus" and "hybrid electric vehicle" have the meanings prescribed in the regulations.

(2) On application by a person who

(

a) purchases parts required for the modification of a passenger bus or shuttle bus so that the bus

(

i) qualifies as a hybrid electric vehicle, or

(ii) operates exclusively on hydrogen-enriched compressed natural gas,

(

b) pays tax under

section 5, and

(

c) satisfies the commissioner that the person qualifies under this section,

the commissioner must refund to that person out of the consolidated revenue fund an amount determined in accordance with the regulations.

Section 130 is amended by adding the following paragraph:

(a.1) prescribing the circumstances in which a vehicle is a short term rental vehicle; .

Section 138 (1) is amended by adding the following paragraph:

Transitional Provisions

Deemed designation under the Health Authorities Act

(1) The following real property is deemed to have been designated under

section 15.01 (2) (a) [exemption from property taxes in relation to future hospital requirements] of the Health Authorities Act for the purposes of the 2006 taxation year:

Parcel identifier: 007-368-704

Lot 1, except that part shown as dedicated road on Plan BCP1915, Block 376, District Lot 526, Plan 16793.

(2) The change effected by subsection (1) is to be treated as if it were an error or omission in the assessment roll, and must be corrected under

section 12 (4) of the Assessment Act .

(3) This

section is retroactive to the extent necessary to give it effect for the purposes of assessment and taxation during the 2006 taxation year.

Transitional – Motor Fuel Tax Act

37 If made before December 31, 2006, regulations that are consequential to the repeal of

section 15.1 of the Motor Fuel Tax Act may be made retroactive to February 22, 2006, and if made retroactive are deemed to have come into force on that date.

Taxation of heat under Social Service Tax Act

38 If made before December 31, 2006, regulations under

(a)

section 73 (1) (

b) of the Social Service Tax Act in relation to heat, or

(b)

section 138 (1) (n.1) of that Act

may be made retroactive to February 21, 2000, and if made retroactive are deemed to have come into force on that date.

Taxation of short term rental vehicles under Social Service Tax Act

39 If made before December 31, 2006, regulations under

section 130 (a.1) of the Social Service Tax Act may be made retroactive to February 22, 2006, and if made retroactive are deemed to have come into force on that date.

Transitional – Social Service Tax Act

(1) If made before July 1, 2006, regulations under

section 76 (1) (

k) or 90.3 of the Social Service Tax Act may be made retroactive to a date on or after July 31, 2001, and if made retroactive are deemed to have come into force on the specified date.

(2) The definition of "software" in

section 1 of the Social Service Tax Act , as amended by this Act, applies with respect to the tax on the purchase of software if the purchase occurred before the coming into force of this Act but the purchase price is neither paid nor payable until after this Act comes into force.

Commencement

41 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table:

Item

Column 1

Provisions of Act

Column 2

Commencement

Anything not elsewhere covered by this table

The date of Royal Assent

Sections 1 and 2

January 1, 2006

Section 3 (

a) January 1, 2006

Sections 4 and 5

January 1, 2006

Section 6

By regulation of the Lieutenant Governor in Council and, when brought into force by regulation,

section 6 is deemed to have come into force on January 1, 2005 and is retroactive to the extent necessary to give it effect on and after that date

Sections 7 and 8

January 1, 2006

Section 9

November 17, 2005

Sections 10 and 11

The date of Royal Assent or March 31, 2006, whichever is earlier

Section 12

September 1, 2004

Section 13

January 1, 2006

Sectons 14 to 18

February 22, 2006

Section 19 to 21

February 22, 2006

Section 22

February 21, 2000

Section 23

February 22, 2006

Sections 25 to 27

February 22, 2006

Sections 29 and 30

By regulation of the Lieutenant Governor in Council

Section 31

February 22, 2006

Section 33

February 22, 2006

Explanatory Notes

Home Owner Grant Act

SECTION 1: [Home Owner Grant Act,

section 1] adds a definition of "threshold amount".

SECTION 2: [Home Owner Grant Act, sections 2 to 5] removes the threshold amount from

the Act so that it can be set by regulation.

SECTION 3: [Home Owner Grant Act,

section 18] adds a power to set the threshold

amount by regulation and repeals and replaces the provision authorizing retroactive

regulations.

SECTION 4: [Home Owner Grant Act,

Schedule 1] increases the home owner grant.

SECTION 5: [Home Owner Grant Act,

Schedule 2] increases the additional home owner

grant.

Income Tax Act

SECTION 6: [Income Tax Act,

section 4.5] in accordance with changes to the Income Tax

Act (Canada), provides for an increase in the amount that a taxpayer may claim

in respect of the medical expenses incurred on behalf of a dependant.

SECTION 7: [Income Tax Act,

section 4.721] extends to the end of 2008 the date that an

expense can be a flow-through mining expenditure for the purposes of calculating

the BC mining flow-through share tax credit.

SECTION 8: [Income Tax Act,

section 25.1] is consequential to the amendment made to

section 4.721 of the Act by this Bill.

SECTION 9: [Income Tax Act,

section 47] clarifies that time periods for claiming certain

tax credits must not be extended.

SECTION 10: [Income Tax Act,

section 80] extends the additional basic tax credit in the

amount of 10% of the qualified BC labour expenditure in respect of eligible

productions for which principal photography begins after December 31, 2004

and before April 1, 2008, and repeals transition rules made obsolete by the

extension of the additional basic tax credit.

SECTION 11: [Income Tax Act,

section 82.1] extends the additional production services tax

credit in the amount of 7% of the accredited qualified BC labour expenditure

in respect of accredited productions for which principal photography begins

after December 31, 2004 and before June 1, 2008.

International Financial Activity Act

SECTION 12: [International Financial Activity Act,

section 19] removes adjusted interest

from the formula to calculate adjusted IFB income.

Mineral Tax Act

SECTION 13: [Mineral Tax Act,

section 8] clarifies the determination of gross revenues

from the operation of a mine for cases where mineral products from the mine

are sold to a related person operating the same mine and the sale is for the purpose

of fulfilling a pre-existing contract.

Motor Fuel Tax Act

SECTION 14: [Motor Fuel Tax Act,

section 1] adds biodiesel fuel to the

definitions of

"marine diesel fuel" and "motive fuel".

SECTION 15: [Motor Fuel Tax Act,

section 13] deletes the reference to

section 12 from subsections

(1) and (2).

SECTION 16: [Motor Fuel Tax Act,

section 15] authorizes the use of coloured fuel in all

unlicensed motor vehicles.

SECTION 17: [Motor Fuel Tax Act,

section 15.1] repeals the section, which will become

redundant as a consequence to the amendment to

section 15 (1).

SECTION 18: [Motor Fuel Tax Act,

section 45.3] is consequential to the repeal of

section 15.1.

Property Transfer Tax Act

SECTION 19: [Property Transfer Tax Act,

section 14]

adds needed cross reference changes to the

definitions of "family farm" and "recreational residence" to deal with circumstances in which transfers are made from an estate to the Public Guardian and Trustee for the benefit of a minor;

excludes corporations that have a corporate shareholder from being family farm corporations under the Act;

corrects the punctuation and ending of a clause in subsection (3) (c.2) (ii);

replaces the current subsection (4) (p.2), dealing with transfers to the Public Guardian and Trustee for the benefit of a minor, with separate provisions for exemptions in relation to principal residences, recreational residences and family farms to make the exemptions in relation to family farms parallel those that would apply to direct transfers to the minor;

provides an exemption from tax under the Act if the land transfer that would otherwise be taxable is the result of 2 or more societies amalgamating under the Society Act to become a new society;

makes consequential cross reference changes to subsection (5).

SECTION 20: [Property Transfer Tax Act,

section 15] extends the special valuation rules of

this

section to transfers to the Public Guardian and Trustee under the proposed

section 14 (4) (p.2) of the Act.

Social Service Tax Act

SECTION 21: [Social Service Tax Act,

section 1]

(

a) amends the definition of "software" to exclude modifications to packaged or pre-written software programs;

(

b) adds

definitions for the purposes of the proposed

section 33.3 of the Act.

SECTION 22: [Social Service Tax Act,

section 1] clarifies that heat is tangible personal property

and so subject to taxation under the Act.

SECTION 23: [Social Service Tax Act, sections 6, 10, 20 and 37] increases the thresholds for

the higher tax rates that apply to passenger vehicles.

SECTION 24: [Social Service Tax Act,

section 9] makes cross reference corrections.

SECTION 25: [Social Service Tax Act,

section 20] makes taxes under this

section inapplicable

to multijurisdictional vehicles other than short term rental vehicles.

SECTION 26: [Social Service Tax Act,

section 28] is consequential to moving this definition

section 1 of the Act.

SECTION 27: [Social Service Tax Act,

section 33.3] allows persons who have paid multijurisdictional

vehicle tax on short term rental vehicles to obtain refunds of that

tax.

SECTION 28: [Social Service Tax Act,

section 38] makes cross reference corrections.

SECTION 29: [Social Service Tax Act,

section 6 6] removes a definition related to environmental levies on tires.

SECTION 30: [Social Service Tax Act,

section 67] removes the aspects of this

section that

establish environmental levies on the purchase of new tires.

SECTION 31: [Social Service Tax Act,

section 76] exempts from tax software sold as part of

a sale of a business, if the software is referred to in paragraphs (

b) and (

c) in

the definition of "software" or the software was modified for a specific person.

SECTION 32: [Social Service Tax Act,

section 88] makes cross reference corrections.

SECTION 33: [Social Service Tax Act,

section 90.3] provides a refund to purchasers of prescribed

parts for the modification of a passenger bus or shuttle bus so that the

bus qualifies as a hybrid electric vehicle or operates exclusively on hydrogen-

enriched compressed natural gas.

SECTION 34: [Social Service Tax Act,

section 130] authorizes regulations for the purposes

of the proposed

section 33.3 of the Act.

SECTION 35: [Social Service Tax Act,

section 138] authorizes regulations establishing circumstances

in which heat is exempted from taxation under the Act.

SECTION 36: [Deemed designation under the Health Authorities Act] provides the

described property with a tax exemption under

section 15.01 (2) of the Health

Authorities Act for the 2006 taxation year and mandates the preparation of a

corrected assessment roll in relation to this change.

SECTION 37: [Transitional – Motor Fuel Tax Act] adds a provision permitting retroactive

regulations.

SECTION 38: [Taxation of heat under Social Service Tax Act] for a limited time period,

allows regulations respecting the taxation of heat under the Social Service Tax

Act to be made retroactive.

SECTION 39: [Taxation of short term rental vehicles under Social Service Tax Act] for a

limited time period, allows for retroactive regulations for the purposes of the

proposed

section 33.3 of the Act.

SECTION 40: [Transitional – Social Service Tax Act]

allows for regulations under sections 76 (1) (

k) and 90.3 of the Act to be made retroactive to July 31, 2001, if made before July 1, 2006, and

applies the new definition of "software" to purchases made before the date this Bill comes into force but for which the purchase price is paid or becomes payable after that date.

Copyright (c) 2007: Queen’s Printer, Victoria, British Columbia, Canada