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2008 Legislative Session: 4th 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 – 2008

BUDGET MEASURES IMPLEMENTATION ACT, 2008

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

Arts Council Act

SECTION 1: [Arts Council Act,

section 3] imposes a duty on the British Columbia Arts Council to make recommendations to the minister respecting the payment of amounts out of the BC150 Cultural Fund Sub-account of the BC Arts and Culture Endowment special account.

Section 3 (1) of the Arts Council Act, R.S.B.C. 1996, c. 19, is amended by striking out " and " at the end of paragraph (

b) and by adding the following paragraph:

(b.1) make recommendations to the minister under

section 9 (5) (

b) of the Special Accounts Appropriation and Control Act respecting the payment of amounts out of the BC150 Cultural Fund Sub-account of the BC Arts and Culture Endowment special account, and .

SECTION 2: [Arts Council Act,

section 6] imposes a duty on the British Columbia Arts Council to state in its annual financial statement the amounts paid out of the BC150 Cultural Fund Sub-account of the BC Arts and Culture Endowment special account on the recommendation of the British Columbia Arts Council.

Section 6 (1) (

b) is repealed and the following substituted:

(

b) a financial statement showing for the preceding fiscal year

(

i) all money allocated by the council under

section 3 (1) (b), and

(ii) all money paid out of the BC150 Cultural Fund Sub-account of the BC Arts and Culture Endowment special account on the council's recommendation under

section 3 (1) (b.1).

British Columbia Railway Act

SECTION 3: [British Columbia Railway Act,

section 6] provides authority for the company

to pay grants in place of school taxes to the Province.

Section 6 of the British Columbia Railway Act , R.S.B.C. 1996, c. 36, is amended

(

a) in subsection (3) by adding " and subject to any conditions specified by the Lieutenant Governor in Council " after " Lieutenant Governor in Council ", and

(

b) by adding the following subsections:

(4) Despite the exemption from tax referred to in subsection (1) and

section 16, with the approval of the Lieutenant Governor in Council and subject to any conditions specified by the Lieutenant Governor in Council, the company may make to the Surveyor of Taxes annual grants in place of school taxes in relation to property of the company or a subsidiary.

(5) An annual grant under subsection (4) must be paid to the Surveyor of Taxes, whether or not the property of the company or a subsidiary is within a rural area.

Budget Measures Implementation Act, 2003

SECTION 4: [Budget Measures Implementation Act, 2003,

section 59] is consequential to

changing the title of the Corporation Capital Tax Act .

Section 59 (1) of the Budget Measures Implementation Act, 2003 , S.B.C. 2003, c. 3, is amended by repealing paragraph (

a) of the definition of "tax Acts" and substituting the following:

(

a) Financial Institutions Minimum Tax Act , .

Corporation Capital Tax Act

SECTION 5: [Corporation Capital Tax Act, title] is self explanatory.

5 The title of the Corporation Capital Tax Act , R.S.B.C. 1996, c. 73, is repealed and the following substituted:

FINANCIAL INSTITUTIONS MINIMUM TAX ACT .

SECTION 6: [Corporation Capital Tax Act,

section 1] modifies the definition of "financial corporation" and adds

definitions of "financial institution" and "minimum tax payable".

Section 1 (1) is amended

(

a) by repealing the definition of "financial corporation" and substituting the following:

"financial corporation" has the same meaning as "financial institution";

"financial institution" means

(

a) a bank, trust company or credit union, and

(

b) the agent, assignee, trustee, liquidator, receiver or other official in whose hands, or under whose control, all or any part of the property of a bank, trust company or credit union is placed; , and

(

b) by adding the following definition:

"minimum tax payable" means tax payable under

section 3.6 and does not include penalties and interest that are, or may be, added to that tax; .

SECTION 7: [Corporation Capital Tax Act, sections 1 and 4] replaces references to "financial corporations" with "financial institutions".

7 Sections 1 (4) (

a) and (

b) and 4 (3) are amended by striking out " financial corporations " wherever it appears and substituting " financial institutions ".

SECTION 8: [Corporation Capital Tax Act, sections 3.21 and 3.22]

provides for a deduction from a financial corporation's tax payable under sections 3 to 3.2 of the Act in an amount that corresponds to

a deduction of 1/3 of the tax payable in respect of the period from April 1, 2008 to March 31, 2009,

a deduction of 2/3 of the tax payable in respect of the period from April 1, 2009 to March 31, 2010, and

a deduction of the tax payable in respect of the part of a taxation year that ends after March 31, 2010 if the taxation year includes March 31, 2010;

provides that sections 3 to 3.21 do not apply in respect of a taxation year that begins after March 31, 2010.

8 The following sections are added:

Deduction from tax payable –

transition to minimum tax

3.21

(1) In this section, "capital tax payable" means a financial corporation's tax payable under

section 3, 3.1 or 3.2 for a taxation year.

(2) A financial corporation may deduct from the financial corporation's capital tax payable for a taxation year the amount determined by the following formula:

Amount =

x CTP x

DT1

x CTP x

DT2

CTP x

DT3

DTY

DTY

DTY

where

CTP

the financial corporation's capital tax payable for the taxation year;

DT1

the number of days in the financial corporation's taxation year that are after March 31, 2008 and before April 1, 2009;

DTY

the number of days in the financial corporation's taxation year;

DT2

the number of days in the financial corporation's taxation year that are after March 31, 2009 and before April 1, 2010;

DT3

in respect of the financial corporation's taxation year that includes and ends after March 31, 2010, the number of days in that taxation year that are after March 31, 2010.

Sections 3 to 3.21 cease to apply

3.22 Sections 3 to 3.21 do not apply to a financial corporation in respect of a taxation year that begins after March 31, 2010.

SECTION 9: [Corporation Capital Tax Act, sections 3.6 to 3.8]

effective for taxation years ending after March 31, 2010, imposes a minimum tax on a financial institution in an amount equal to 1% of the financial institution's B.C. paid up capital for a taxation year if the financial institution

has or had a permanent establishment in British Columbia in the taxation year, and

has, at the end of the taxation year, net paid up capital that is equal to or greater than the prescribed amount;

allows a financial institution to deduct from its minimum tax payable for a taxation year any tax payable under the Income Tax Act for the taxation year and any unused corporate income tax credits for its 7 taxation years immediately before (but ending after March 31, 2010) and its 3 taxation years immediately after the taxation year.

9 The following sections are added:

Minimum tax

3.6

(1) A financial institution must, for each taxation year that the financial institution has or had a permanent establishment in British Columbia, pay to the government a tax calculated in accordance with this Act if the financial institution has, at the end of the taxation year, net paid up capital that is equal to or greater than the prescribed amount.

(2) The tax imposed on and payable by the financial institution under subsection (1) for the taxation year is an amount equal to 1% of the B.C. paid up capital of the financial institution for that taxation year.

(3) This

section applies to a financial institution in respect of a taxation year that ends on or after April 1, 2010.

Deductions from minimum tax payable

3.7

(1) Subject to subsection (2), a financial institution may deduct from the financial institution's minimum tax payable for a taxation year an amount equal to the total of that part of the following amounts claimed by the financial institution:

(

a) the financial institution's net income tax payable for the taxation year;

(

b) the financial institution's unused corporate income tax credits for its 7 taxation years immediately before and its 3 taxation years immediately after the taxation year.

(2) For the purposes of subsection (1), the following rules apply:

(

a) an amount may not be claimed under subsection (1) (

b) unless all of the amount claimable under subsection (1) (

a) for the taxation year has been claimed;

(

b) subject to paragraph (c), an amount may not be claimed under subsection (1) (

b) for a taxation year in respect of a financial institution's unused corporate income tax credits for another taxation year unless all of the financial institution's unused corporate income tax credits for taxation years preceding the other taxation year have been claimed;

(

c) an amount may not be claimed under subsection (1) (

b) in respect of a financial institution's unused corporate income tax credits for a taxation year ending before April 1, 2010;

(

d) an amount may be claimed under subsection (1) (

b) for a particular taxation year in respect of a financial institution's unused corporate income tax credits for another taxation year, only to the extent that the amount that may be claimed exceeds the total of all amounts each of which is the amount claimed in respect of that unused corporate income tax credit for a taxation year preceding the particular taxation year;

(

e) the amount deducted under subsection (1) for a taxation year may not exceed the financial institution's minimum tax payable for the taxation year.

(3) A financial institution's net income tax payable for a taxation year is the greater of

(

a) zero, and

(

b) the financial institution's tax payable under sections 14 to 16 [corporation income tax; corporate straddle provision; small business rate] of the Income Tax Act for the taxation year, not including any penalties and interest that are, or may be, added to the tax payable under that Act, less any deductions made by the financial institution under the sections referred to in

section 18.1 [order of making deductions from tax payable] of that Act for the taxation year.

(4) A financial institution's unused corporate income tax credits for a taxation year is the amount, if any, by which the financial institution's net income tax payable for the taxation year exceeds the financial institution's minimum tax payable for the taxation year.

Transition for taxation year including

and ending after March 31, 2010

3.8 For the purpose of applying sections 3.6 and 3.7 to a financial institution for a taxation year that includes and ends after March 31, 2010,

(

a) the minimum tax payable by the financial institution for the taxation year is equal to that proportion of the minimum tax otherwise payable under

section 3.6 for the taxation year by the financial institution, if this

section did not apply, that the number of days in the taxation year occurring after March 31, 2010 bears to the total number of days in the taxation year, and

(

b) the financial institution's net income tax payable for the taxation year is equal to that proportion of the net income tax otherwise payable under

section 3.7 (3) for the taxation year by the financial institution, if this

section did not apply, that the number of days in the taxation year occurring after March 31, 2010 bears to the total number of days in the taxation year.

SECTION 10: [Corporation Capital Tax Act,

section 7] subject to a continued exception for credit unions, provides that the capital stock of a financial corporation includes all shares in the financial corporation.

Section 7 (2) is repealed and the following substituted:

(2) Despite

section 1 (5), for the purposes of subsection (1) of this section,

(

a) subject to paragraph (b), the capital stock of a financial corporation includes all shares in the financial corporation, and

(

b) the capital stock of a credit union does not include its non-equity shares as defined by the Financial Institutions Act .

SECTION 11: [Corporation Capital Tax Act,

section 12] replaces references to "corporation" with "financial institution" and "authorized foreign bank" as appropriate.

Section 12 is amended

(

a) in subsection (1) by striking out " the corporation " and substituting " the financial institution ", and

(

b) in subsection (2) by striking out " corporation " and substituting " authorized foreign bank ".

SECTION 12: [Corporation Capital Tax Act,

section 19]

(

a) specifies that, in determining estimated tax payable for the purposes of installment payments, tax payable must be computed as if there was no deduction from tax payable in respect of unused corporate income tax credits from a subsequent taxation year, and

(

b) provides for the computation of interest in respect of a taxation year if there is a deduction from tax payable for the taxation year of unused corporate income tax credits from a subsequent taxation year.

Section 19 is amended

(

a) by repealing subsection (6) (

a) and substituting the following:

(

a) this Act had been in force, except

section 3.7 (1) (

b) insofar as that

section authorizes the financial institution to deduct from its minimum tax payable for a taxation year an amount equal to that

part claimed of its unused corporate income tax credits for its 3 taxation years immediately after the taxation year, and , and

(

b) by adding the following subsections:

(12.1) Despite subsection (12), subsections (12.3) and (12.4) apply if in computing a financial institution's tax payable for a taxation year the financial institution deducts an amount under

section 3.7 (1) in respect of an amount claimed under

section 3.7 (1) (

b) for the financial institution's 3 taxation years immediately after the taxation year.

(12.2) In subsection (12.3), "adjusted tax payable" means a financial institution's tax payable for a taxation year if no deduction were made for the taxation year under

section 3.7 (1) in respect of an amount claimed under

section 3.7 (1) (

b) for the financial institution's 3 taxation years immediately after the taxation year.

(12.3) If the aggregate amount of the installments paid by a financial institution under this

section exceeds the adjusted tax payable for the taxation year in respect of which the installments were paid, the amount by which an installment exceeded 25% of the amount of the financial institution's adjusted tax payable for that taxation year earns interest from the later of the due date of the installment and the date that the overpayment was made.

(12.4) If in computing a financial institution's tax payable for a taxation year the financial institution deducts an amount under

section 3.7 (1) in respect of an amount claimed under

section 3.7 (1) (

b) for a particular taxation year that is one of the financial institution's 3 taxation years immediately after the taxation year, the amount deducted earns interest from the date that is 61 days after the date the financial institution delivers a return for that particular year to the administrator.

SECTION 13: [Corporation Capital Tax Act,

section 29] replaces a reference to "corporation's" with "financial institution's".

Section 29 (4) (b) (i) (

A) is amended by striking out " corporation's " and substituting " financial institution's ".

SECTION 14: [Corporation Capital Tax Act,

section 40] amends the definition of "savings institution" to remove a reference to a financial institution that accepts deposits from the public in the normal course of its business.

Section 40 (13) is amended by adding " and " at the end of paragraph (c), by striking out " and " at the end of paragraph (

d) and by repealing paragraph (e).

SECTION 15: [Corporation Capital Tax Act, various sections] replaces references to "financial corporation" with "financial institution".

15 The provisions listed in Column 1 of the

Schedule to this Act are amended by striking out " financial corporation " wherever it appears and substituting " financial institution ".

SECTION 16: [Corporation Capital Tax Act, various sections] replaces references to "financial corporation's" with "financial institution's".

16 The provisions listed in Column 2 of the

Schedule to this Act are amended by striking out " financial corporation's " wherever it appears and substituting " financial institution's ".

Crown Proceeding Act

SECTION 17: [Crown Proceeding Act,

section 3] is consequential to changing the title of the Corporation Capital Tax Act .

Section 3 (1) (a) (ii) of the Crown Proceeding Act, R.S.B.C. 1996, c. 89, is repealed and the following substituted:

(ii) the Financial Institutions Minimum Tax Act , or .

Financial Administration Act

SECTION 18: [Financial Administration Act,

section 21] allows for payments out of the consolidated revenue fund for government vehicles and expenses.

Section 21 (2) of the Financial Administration Act, R.S.B.C. 1996, c. 138, is amended by adding " , (c.1) and (d) " after " 27 (1) (c) ".

SECTION 19: [Financial Administration Act,

section 27] clarifies the power of the Treasury Board to make regulations relating to the payment of expenses for Ministers, Parliamentary Secretaries, Members of the Legislative Assembly and other persons in relation to the discharge of official duties.

Section 27 is amended

(

a) by repealing subsection (1) (

d) and substituting the following:

(

d) make regulations establishing amounts or allowances, to be paid out of an appropriation, for the reasonable out-of-pocket, travelling and other expenses incurred by

(

i) despite

section 7 of the Members' Remuneration and Pensions Act , members of the Legislative Assembly

(

A) acting as a member of a board, council, commission, body or other entity created or established by the Executive Council,

(

B) attending or acting in an official capacity at a meeting, conference, task force, committee, visitation, function or work on any project if designated to do so by a minister on behalf of the Executive Council, or

(

C) acting as members of the Executive Council or as parliamentary secretaries, and

(ii) other persons in relation to the discharge of official duties. , and

(

b) by adding the following subsection:

(1.1) A regulation under subsection (1) (

d) may

(

a) establish different amounts or allowances for different persons or circumstances, and

(

b) establish amounts or allowances by reference to a directive of the Treasury Board.

Home Owner Grant Act

SECTION 20: [Home Owner Grant Act,

section 1] adds a definition for "permanent resident" and amends paragraph (

b) of the definition of "spouse" to add that persons must have been cohabiting for at least 2 years prior to filing an application for a low-income grant supplement in order satisfy the definition.

Section 1 of the Home Owner Grant Act, R.S.B.C. 1996, c. 194, is amended

(

a) by adding the following definition:

"permanent resident" has the same meaning as in the Immigration and Refugee Protection Act (Canada); , and

(

b) by repealing the definition of "spouse" and substituting the following:

"spouse" means a person who

(

a) is married to another person, or

(

b) is living and cohabiting with another person in a marriage-like relationship, including a marriage-like relationship between persons of the same gender, for a period of at least 2 years before

(

i) the death or either of them,

(ii) the filing of an application by either of them under

section 8, or

(iii) the filing of an application by either of them for a low-income grant supplement,

as the case may be, but does not include persons who are spouses as defined in paragraph (

a) who are separated and living apart, and

(

c) have entered into a written agreement under which they have agreed to live apart, or

(

d) are subject to an order of the court recognizing the separation; .

SECTION 21: [Home Owner Grant Act,

section 2] amends

section 2 (1) of the Act to substitute the requirement that an owner be a Canadian citizen or a "permanent resident", as newly defined in the Act by this Bill, and ordinarily resident in British Columbia in order to be entitled to a home owner grant.

Section 2 (1) (

a) and (

b) is repealed and the following substituted:

(

a) is a Canadian citizen or a permanent resident,

(

b) is ordinarily resident in British Columbia, and

(

c) subject to

section 5.1, occupies the eligible residence as his or her principal residence.

SECTION 22: [Home Owner Grant Act,

section 2] makes a similar amendment to

section 2 (6) with respect to the residency requirements for the spouse or relative of a deceased owner of an eligible residence.

Section 2 (6) is amended

(

a) in paragraph (

a) by striking out " permanently resident in British Columbia, " and substituting " a Canadian citizen or a permanent resident and ordinarily resident in British Columbia, ",

(

b) in paragraph (

b) by adding " subject to

section 5.1, " before " the spouse ", and

(

c) by striking out " and " at the end of paragraph (b), by adding " , and " at the end of paragraph (

c) and by adding the following paragraph:

(

d) the deceased owner met the requirements under subsection (1) at the time of the deceased owner's death.

SECTION 23: [Home Owner Grant Act,

section 3] amends

section 3 (2) of the Act to reflect that an owner of an eligible building is entitled to a grant in respect of every eligible occupant of an eligible apartment or housing unit who is a Canadian citizen or a "permanent resident", as newly defined in the Act by this Bill, and ordinarily resident in British Columbia.

Section 3 (2) (

a) and (

b) is repealed and the following substituted:

(

a) is a Canadian citizen or a permanent resident,

(

b) is ordinarily resident in British Columbia, and

(

c) subject to

section 5.1, occupies the apartment or housing unit as his or her principal residence.

SECTION 24: [Home Owner Grant Act,

section 3] makes a similar amendment to

section 3 (6) with respect to the residency requirements for the spouse or relative of a deceased eligible occupant of an eligible apartment or housing unit.

Section 3 (6) is amended

(

a) in paragraph (

a) by adding " subject to

section 5.1, " before " the spouse ", and

(

b) in paragraph (

b) by striking out " permanently resident " and substituting " a Canadian citizen or a permanent resident and ordinarily resident ".

SECTION 25: [Home Owner Grant Act,

section 4] amends

section 4 (2) of the Act to reflect that an owner of a land cooperative is entitled to a grant in respect of every eligible occupant of an eligible land cooperative residence who is a Canadian citizen or a "permanent resident", as newly defined in the Act by this Bill, and ordinarily resident in British Columbia.

Section 4 (2) (

a) and (

b) is repealed and the following substituted:

(

a) is a Canadian citizen or a permanent resident,

(

b) is ordinarily resident in British Columbia, and

(

c) subject to

section 5.1, occupies that residence as his or her principal residence.

SECTION 26: [Home Owner Grant Act,

section 4] makes a similar amendment to

section 4 (6) with respect to the residency requirements for the spouse or relative of a deceased eligible occupant of an eligible land cooperative residence.

Section 4 (6) is amended

(

a) in paragraph (

a) by adding " subject to

section 5.1, " before " the spouse ", and

(

b) in paragraph (

b) by striking out " permanently resident " and substituting " a Canadian citizen or a permanent resident and ordinarily resident ".

SECTION 27: [Home Owner Grant Act,

section 5] amends

section 5 (2) of the Act to reflect that an owner of multi dwelling leased parcel is entitled to a grant in respect of every eligible occupant of an eligible multi dwelling leased parcel residence who is a Canadian citizen or a "permanent resident", as newly defined in the Act by this Bill, and ordinarily resident in British Columbia.

Section 5 (2) (

a) and (

b) is repealed and the following substituted:

(

a) is a Canadian citizen or a permanent resident,

(

b) is ordinarily resident in British Columbia, and

(

c) subject to

section 5.1, occupies that residence as his or her principal residence.

SECTION 28: [Home Owner Grant Act,

section 5] makes a similar amendment to

section 5 (6) with respect to the residency requirements for the spouse or relative of a deceased eligible occupant of an eligible multi dwelling leased parcel residence.

Section 5 (6) is amended

(

a) in paragraph (

a) by adding " subject to

section 5.1, " before " the spouse ", and

(

b) in paragraph (

b) by striking out " permanently resident " and substituting " a Canadian citizen or a permanent resident and ordinarily resident ".

SECTION 29: [Home Owner Grant Act, sections 5.1 to 5.4]

permits eligible persons to continue to be entitled to a home owner grant or the benefit of a grant, or eligible for a low-income grant supplement, despite an extended absence from the principal residence, in certain circumstances;

limits to 2 taxation years the period for which an eligible person may continue to receive a grant, the benefit of a grant or a low-income grant supplement in circumstances of an extended absence;

establishes the requirements that must be met for an eligible person to continue to receive a grant, the benefit of a grant or a low-income grant supplement during an extended absence;

provides for recovery of the amount received by a person for a grant or low-income grant supplement if an eligible person fails to resume occupancy of the residence as his or her principal residence at the end of an extended absence, as required under the Act;

imposes an obligation on eligible persons to provide the grant administrator with any information or evidence the administrator requires in order to determine whether the person meets the requirements under the new provisions proposed by this Bill.

29 The following sections are added:

Extended absence from principal residence

5.1

(1) In this section, and in sections 5.2 to 5.4, "eligible person" means

(

a) an owner of an eligible residence,

(

b) a spouse or relative, as described in

section 2 (6), of a deceased owner of an eligible residence,

(

c) an eligible occupant of an eligible apartment or eligible housing unit,

(

d) a spouse or relative, as described in

section 3 (6), of a deceased eligible occupant of an eligible apartment or eligible housing unit,

(

e) an eligible occupant of an eligible land cooperative residence,

(

f) a spouse or relative, as described in

section 4 (6), of a deceased eligible occupant of an eligible land cooperative residence,

(

g) an eligible occupant of an eligible multi dwelling leased parcel residence, or

(

h) a spouse or relative, as described in

section 5 (6), of a deceased eligible occupant of an eligible multi dwelling leased parcel residence.

(2) For the purposes of sections 2 (1) (c), 2 (6) (b), 3 (2) (c), 3 (6) (a), 4 (2) (c), 4 (6) (a), 5 (2) (

c) and 5 (6) (a), an eligible person must be considered to continue to occupy his or her principal residence if

(

a) the principal residence has been destroyed or substantially damaged by fire or a flood or other natural disaster, and the eligible person ceases to occupy the principal residence while that residence is under reconstruction or repair, or

(

b) the eligible person ceases to occupy the principal residence for an extended period for any other reason, unless the eligible person is absent for a period of incarceration.

(3) Subsection (2) applies only in the following tax years:

(

a) for an eligible person described in subsection (1) (

a) or (

b) who has not applied for or received a grant under

section 2 or a low-income grant supplement for the tax year in which the eligible person ceases to occupy the residence, in that tax year and in the subsequent tax year, if the period of the eligible person's absence from the residence continues on an uninterrupted basis into the subsequent tax year;

(

b) for an eligible person described in subsection (1) (

a) or (

b) who has applied for or received a grant under

section 2 or a low-income grant supplement for the tax year in which the eligible person ceases to occupy the residence, in each of the subsequent 2 tax years that the period of the eligible person's absence from the residence continues on an uninterrupted basis;

(

c) for an eligible person described in subsection 1 (

c) to (

h) who has not qualified

(

i) an apartment as an eligible apartment,

(ii) a housing unit as an eligible housing unit,

(iii) a residence on a land cooperative as an eligible land cooperative residence, or

(iv) a residence on a multi dwelling leased parcel as an eligible multi dwelling leased parcel residence, or

applied for and received a low-income grant supplement for the tax year in which the eligible person ceases to occupy the residence, in that tax year and in the subsequent tax year, if the period of the eligible person's absence from the residence continues on an uninterrupted basis into the subsequent tax year;

(

d) for an eligible person described in subsection (1) (

c) to (

h) who has qualified

(

i) an apartment as an eligible apartment,

(ii) a housing unit as an eligible housing unit,

(iii) a residence on a land cooperative as an eligible land cooperative residence, or

(iv) a residence on a multi dwelling leased parcel as an eligible multi dwelling leased parcel residence, or

applied for and received a low-income grant supplement for the tax year in which the eligible person ceases to occupy the residence, in each of the subsequent 2 tax years that the period of the eligible person's absence from the residence continues on an uninterrupted basis.

(4) This

section applies only if the requirements set out in

section 5.2 are met.

Additional requirements – extended absences

5.2

(1) The eligible person must have occupied the residence as his or her principal residence immediately before the eligible person ceased to occupy the residence.

(2) During the eligible person's absence, the residence must be

(

a) vacant, in the case of an absence under

section 5.1 (2) (a), or

(

b) occupied by the spouse or relative of the eligible person, if, in the case of an absence under

section 5.1 (2) (

b) by an eligible person described in

section 5.1 (1) (a), (c), (

e) or (g), the spouse or relative of the eligible person occupied the residence as his or her principal residence at the time the eligible person ceased to occupy the residence.

(3) During the period of the eligible person's extended absence, in the case of

(

a) an eligible residence, the residence must not be for sale,

(

b) an apartment referred to in paragraph (

a) of the definition of "eligible apartment", the share or shares and other securities in the corporation must not be for sale,

(

c) a land cooperative, the share or shares and other securities in the corporation must not be for sale,

(

d) a multi dwelling leased parcel, the residence on the parcel must not be for sale,

(

e) a housing unit that is or is located in a housing cooperative building, the share in the association must not be for sale, or

(

f) a housing unit that is or is located in a housing society building, the right to occupy the housing unit must not be for sale.

(4) For an absence under

section 5.1 (2) (b),

(

a) if the eligible person is a person described in

section 5.1 (1) (

a) or (b), the eligible person must, in the tax year immediately before the tax year in which the eligible person ceased to occupy the residence, have applied for and received, with respect to that residence, a grant under

section 2 or a low-income grant supplement, or

(

b) if the eligible person is a person described in

section 5.1 (1) (

c) to (h), the eligible person must, in the tax year immediately before the tax year in which the eligible person ceased to occupy the residence, with respect to that residence,

(

i) have qualified

(

A) an apartment as an eligible apartment,

(

B) a housing unit as an eligible housing unit,

(

C) a residence on a land cooperative as an eligible land cooperative residence, or

(

D) a residence on a multi dwelling leased parcel as an eligible multi dwelling leased parcel residence, or

(ii) have applied for and received a low-income grant supplement.

(5) The eligible person must intend to occupy the residence as his or her principal residence at the end of the eligible person's extended absence.

Repayment – failure to resume occupancy of principal residence

5.3 If a person has received a grant or a low-income grant supplement as a result of the application of

section 5.1 to an eligible person, and the eligible person, for reasons other than his or her death, fails to occupy the residence as his or her principal residence

(

a) at the end of the eligible person's extended absence for reconstruction or repair of the residence, or

(

b) in the tax year immediately following the last tax year in which the eligible person was entitled, under

section 5.1, to receive a grant, a low-income grant supplement or a benefit under

section 7 (1),

as the case may be,

section 17 applies as if the grant or low-income grant supplement received were an amount the person was not entitled to receive.

Obligation to provide information to grant administrator

5.4 An eligible person must supply the grant administrator with any information or documentary evidence the grant administrator considers necessary in order for the grant administrator to determine whether

section 5.1 applies to the eligible person in the tax year in respect of which an application for a grant under

section 2 or a low-income grant supplement is made.

SECTION 30: [Home Owner Grant Act,

section 6] adds restrictions regarding the eligibility for home owner grants and low-income grant supplements, so that a person cannot receive a home owner grant or low-income grant supplement if that person's spouse received a full low-income grant supplement or home owner grant, respectively, on the same property in the same tax year, and to prohibit a person from receiving a grant on a property if either that person or the person's spouse has already received a low-income grant supplement on another property in the same tax year.

Section 6 is amended by adding the following subsections:

(5) If in a year an owner of an eligible residence has received a low-income grant supplement, the spouse of the owner is not entitled, during that year, to

(

a) a grant under

section 2, with respect to the eligible residence, unless the grant is affected by a reduction under

section 2 (3),

(

b) a grant under

section 2, with respect to another eligible residence, or

(

c) the benefit under

section 7 (1) with respect to an eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence.

(6) If in a year an eligible occupant of an eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence has received a low-income grant supplement, the spouse of the eligible occupant is not entitled, during that year, to

(

a) the benefit under

section 7 (1), with respect to the eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence, unless the eligible occupant is affected by a reduction in the benefit under

section 7 (3),

(

b) the benefit under

section 7 (1), with respect to another eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence, or

(

c) a grant under

section 2, with respect to an eligible residence.

(7) If in a year an owner of an eligible residence

(

a) is affected by a grant reduction under

section 2 (3), and

(

b) has not applied for or received a low-income grant supplement,

the spouse of the owner may qualify during that year for a low-income grant supplement, with respect to the eligible residence, in an amount not to exceed the reduction in the grant.

(8) If in a year an eligible occupant of an eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence

(

a) is affected by a reduction, under

section 7 (3), in the benefit under

section 7 (1), and

(

b) has not applied for or received a low-income grant supplement,

the spouse of the eligible occupant may qualify during that year for a low-income grant supplement, with respect to the eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence, in an amount not to exceed the reduction in the benefit.

(9) If in a year an individual or the individual's spouse

(

a) has received a grant under

section 2 with respect to an eligible residence, or

(

b) is entitled to the benefit under

section 7 (1) with respect to an eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence,

the individual is not eligible for a low-income grant supplement with respect to another eligible residence, eligible apartment, eligible housing unit, eligible land cooperative residence or eligible multi dwelling leased parcel residence.

Hotel Room Tax Act

SECTION 31: [Hotel Room Tax Act,

section 2] adjusts the accommodation tax rate to 5%.

Section 2 (1) and (3) of the Hotel Room Tax Act, R.S.B.C. 1996, c. 207, is amended by striking out " 6.35% " and substituting " 5% ".

SECTION 32: [Hotel Room Tax Act,

section 3.1] adjusts the Tourism British Columbia tax rate to 3%.

Section 3.1 is amended by striking out " 1.65% " and substituting " 3% ".

Hydro and Power Authority Act

SECTION 33: [Hydro and Power Authority Act,

section 21] is consequential to the repeal of

section 25 of the Act.

Section 21 (1) and (14) of the Hydro and Power Authority Act, R.S.B.C. 1996, c. 212, is amended by striking out " and within the borrowing limitation set out in

section 25 ".

SECTION 34: [Hydro and Power Authority Act,

section 25] repeals the section.

Section 25 is repealed.

Income Tax Act

SECTION 35: [Income Tax Act,

section 1] maintains references to Canada in provisions of the Income Tax Act (Canada) that apply for the purposes of the Act.

Section 1 (8) of the Income Tax Act, R.S.B.C. 1996, c. 215, is amended by adding the following paragraphs:

(c.1) the definition of "return of income" in

section 122.5 (1) of the federal Act as that definition applies for the purposes of

section 8.1 of this Act;

(c.2)

section 122.5 (6.2) as that

section applies for the purposes of

section 8.1 of this Act;

(d.2) the definition of "non-resident" in

section 248 (1) of the federal Act as that definition applies for the purposes of

section 122.5 (6.2) of the federal Act, as that

section applies for the purposes of

section 8.1 of this Act; .

SECTION 36: [Income Tax Act,

section 4.1] reduces for the 2008 taxation year the personal income tax rates applied to the 2 lowest taxable income ranges.

Section 4.1 (1) is amended

(

a) in paragraph (

a) by striking out " 5.35% " and substituting " 5.24% ", and

(

b) in paragraph (b) (ii) by striking out " 8.15% " and substituting " 7.98% ".

SECTION 37: [Income Tax Act,

section 4.1] reduces for the 2009 and subsequent taxation years the personal income tax rates applied to the 2 lowest taxable income ranges.

Section 4.1 (1) is amended

(

a) by striking out " 2008 " and substituting " 2009 ",

(

b) in paragraph (

a) by striking out " 5.24% " and substituting " 5.06% ", and

(

c) in paragraph (b) (ii) by striking out " 7.98% " and substituting " 7.7% ".

SECTION 38: [Income Tax Act,

section 4.52] provides for the indexing of amounts expressed in dollars in the specified provision.

Section 4.52 (1) is amended by adding the following paragraph:

(

f) except in respect of the 2007 taxation year, the description of deduction in

section 8.1 (3) [low income climate action tax credit] .

SECTION 39: [Income Tax Act,

section 4.69] reduces for the 2009 and subsequent taxation years the percentage applied in determining the dividend tax credit.

Section 4.69 is amended

(

a) in paragraph (

a) by striking out " 25.5% " and substituting " 21% ", and

(

b) in paragraph (

b) by striking out " 38 2/3% " and substituting " 35 4/9% ".

SECTION 40: [Income Tax Act,

section 8.1] establishes a tax credit that is to be administered with the goods and services tax credit under the Income Tax Act (Canada). The amount of the tax credit is deemed to have been paid on account of tax payable under the Act and is reduced for individuals with an adjusted income exceeding a specified amount.

40 The following

section is added:

Low income climate action tax credit

8.1

(1) In this section, "eligible individual" , in relation to a month specified for a taxation year, means an individual, other than a trust,

(

a) who

(

i) has, before the specified month, attained the age of 19 years, or

(ii) was, at any time before the specified month,

(

A) a parent who resided with their child, or

(

B) married or in a common-law partnership, and

(

b) who was resident in British Columbia on the first day of the specified month and the preceding specified month.

(2) Section 122.5 of the federal Act, except the definition of "eligible individual" in subsection (1) and subsection (3), applies for the purposes of this

section in relation to a month specified for the 2007 and subsequent taxation years.

(3) If, in relation to a month specified for a taxation year, an eligible individual files a return of income for the taxation year, the eligible individual is deemed to have paid during the specified month, on account of the eligible individual's tax payable under this Act for the taxation year, an amount equal to 25% of the amount, if any, determined by the following formula:

amount = total credits – deduction

where

total credits = the total of the following:

(

a) the prescribed amount;

(

b) the prescribed amount, if the individual has a qualified relation in relation to the specified month;

(

c) the prescribed amount, if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under

section 118 (1) of the federal Act because of paragraph (

b) of the description of "B" in that

section in respect of a qualified dependant of the individual in relation to the specified month;

(

d) the prescribed amount multiplied by the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (

c) in computing the total for the specified month;

deduction = 2% of the amount, if any, by which the individual's adjusted income for the taxation year in relation to the specified month exceeds,

(

a) if the individual has no qualified relation or qualified dependant in relation to the specified month, $30 000, or

(

b) in any other case, $35 000.

(4) In applying

section 122.5 (3.1) [when advance payment applies] of the federal Act for the purposes of this section, the references to an amount expressed in dollars in that

section must be read as a reference to $10.

(5) Despite

section 122.5 (5) of the federal Act, as it applies for the purposes of this Act, the individual who is the eligible individual, in relation to a specified month, under

section 122.5 (5) of the federal Act, as it applies for the purposes of that Act, is the individual who is the eligible individual, in relation to that specified month, for the purposes of this section.

(6) Despite

section 122.5 (6) of the federal Act, as it applies for the purposes of this Act, a person who is the qualified dependant of an individual, in relation to a specified month, under

section 122.5 (6) of the federal Act, as it applies for the purposes of that Act, is the qualified dependant of that individual, in relation to that specified month, for the purposes of this section.

(7) In applying

section 122.5 (6.1) of the federal Act for the purposes of this section, that

section must be read as including the following paragraph:

(

d) an individual becomes or ceases to be resident in British Columbia.

(8) Without limiting

section 48 (1) and (2), the Lieutenant Governor in Council may make regulations prescribing amounts for the purposes of subsection (3) of this section.

SECTION 41: [Income Tax Act, sections 13.01 to 13.06] provides for a climate action dividend in the amount of

$100 for an individual who is not an eligible individual in respect of a qualified dependant, and

$100 for an eligible individual and $100 for each qualified dependant of the eligible individual.

41 The following sections are added:

Definitions for climate action dividend

13.01 In this

section and sections 13.02 to 13.06:

"cohabiting spouse or common-law partner" has the same meaning as in

section 122.6 of the federal Act;

"eligible individual" , in respect of a qualified dependant, means a person who, on January 1, 2008,

(

a) resides with the qualified dependant,

(

b) is the parent of the qualified dependant who primarily fulfils the responsibility for the care and upbringing of the qualified dependant, and

(

c) is not described in

section 149 (1) (

a) or (

b) of the federal Act,

and for the purpose of this definition,

(

d) if a qualified dependant resides with the dependant's female parent, the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent,

(

e) the presumption referred to in paragraph (

d) does not apply in the circumstances prescribed for the purposes of paragraph (

g) of the definition of "eligible individual" in

section 122.6 of the federal Act, and

(

f) the factors prescribed for the purposes of paragraph (

h) of the definition of "eligible individual" in

section 122.6 of the federal Act must be considered in determining what constitutes care and upbringing;

"individual" does not include a trust;

"qualified dependant" means a person who

(

a) on December 31, 2007, has not attained the age of 18 years,

(

b) is not a person in respect of whom an amount was deducted under paragraph (

a) of the description of "B" in

section 118 (1) of the federal Act in computing the tax payable by the person's spouse or common-law partner for the taxation year that includes December 31, 2007, and

(

c) is not a person in respect of whom a special allowance under the Children's Special Allowances Act (Canada) is payable for December 2007,

but does not include a person who, on January 1, 2008, is an eligible individual in respect of another person who is a qualified dependant;

"refund of an overpayment" means a refund of an amount deemed under

section 13.02 to be an overpayment.

Climate action dividend

13.02

(1) An individual is deemed to have made an overpayment on account of the individual's liability under this Act for the 2006 taxation year if

(

a) on December 31, 2007, the individual

(

i) is resident in British Columbia, or

(ii) is not resident in British Columbia but is in a prescribed class of individuals, and

(

b) the individual

(

i) is at least 18 years of age on December 31, 2007,

(ii) is less than 18 years of age on December 31, 2007 and is an eligible individual in respect of a qualified dependant, or

(iii) is in a prescribed class of individuals and meets the prescribed conditions on December 31, 2007.

(2) The amount that an individual is deemed to have overpaid under subsection (1) is

(

a) in the case of an individual who is not an eligible individual in respect of a qualified dependant, $100, or

(

b) in the case of an individual who is an eligible individual in respect of one or more qualified dependants, $100 plus $100 for each qualified dependant.

(3) Despite subsection (1), an individual is not deemed to have made an overpayment on account of the individual's liability under this Act for the 2006 taxation year if the individual is confined to a prison or similar institution for a period of at least 90 days that includes January 1, 2008.

Climate action dividend cannot

be attached or assigned

13.03 A refund of an overpayment

(

a) cannot be charged or given as security,

(

b) cannot be assigned except under a prescribed Act,

(

c) cannot be garnished or attached,

(

d) is exempt from execution or seizure, and

(

e) cannot be retained by way of deduction or set-off under the Financial Administration Act .

Climate action dividend – general

13.04

(1) Despite sections 34 and 40 (1.1), the following sections of the federal Act, as they apply for the purposes of this Act, do not apply to a refund of an overpayment:

(

a) section 160.1 (1) (b) [interest if excess refunded] ;

(b)

section 164 (2) [application of refund or repayment to other debts] ;

(c)

section 164 (3) [interest on refunds] .

(2) Despite

section 40 (1), and

section 164 (1) (

b) of the federal Act as it applies for the purposes of this Act,

(

a) if an overpayment on account of an individual's liability under this Act is deemed to have arisen under

section 13.02 (1) (a) (

i) and (b) (

i) of this Act, the minister must, without application and with all due dispatch, refund the amount of the overpayment after the minister is provided with the information and records required by the regulations, and

(

b) subject to subsection (3), if an overpayment on account of an individual's liability under this Act is deemed to have arisen under

section 13.02 (1) of this Act, the Provincial minister must, with all due dispatch, refund the amount of the overpayment after

(

i) an application is filed in the form, and containing the information, required by the Commissioner of Income Tax, and

(ii) the Commissioner of Income Tax is provided with the information and records required by the regulations.

(3) Subsection (2) (

b) does not apply if the minister has refunded the amount of the overpayment to the individual under subsection (2) (a).

(4) Despite sections 41 and 42, no objection or appeal lies in respect of the determination of the entitlement of an individual to a refund of an overpayment.

(5) Without limiting any provision of this Act or the federal Act, for the purpose of determining the entitlement of an individual to a refund of an overpayment, the Commissioner of Income Tax has powers equivalent to the federal minister under sections 231, 231.1 and 233 (1) of the federal Act, and for that purpose those sections apply.

(6) If an individual receives a refund of an overpayment to which the individual is not entitled, the individual must repay the amount to

(

a) the minister, if the minister refunded the amount under subsection (2) (a), and

(

b) the Provincial minister, if the Provincial minister refunded the amount under subsection (2) (b).

Climate action dividend – no further

assessments, determinations or decisions

13.05

(1) Despite any other provision of this Act or the federal Act, as it applies for the purposes of this Act, an assessment, determination or decision may not be made on or after the prescribed date with respect to the entitlement of an individual to a refund of an amount deemed under

section 13.02 to be an overpayment.

(2) The date prescribed for the purposes of subsection (1) may not be a date before August 1, 2010.

Climate action dividend regulations

13.06

(1) Without limiting

section 48 (1) and (2), the Lieutenant Governor in Council may make regulations as follows:

(

a) prescribing classes of individuals for the purposes of

section 13.02 (1) (a) (ii);

(

b) prescribing classes of individuals for the purposes of

section 13.02 (1) (b) (iii);

(

c) prescribing conditions for the purposes of

section 13.02 (1) (b) (iii);

(

d) prescribing Acts for the purposes of

section 13.03 (b);

(

e) respecting the information and records to be provided under

section 13.04 (2) to the minister or Commissioner of Income Tax;

(

f) prescribing a date for the purposes of

section 13.05 (1).

(2) In making regulations under subsection (1) (c), the Lieutenant Governor in Council may make different regulations for any different classes of individuals prescribed for the purposes of

section 13.02 (1) (b) (iii).

(3) In making regulations under subsection (1) (e), the Lieutenant Governor in Council may delegate a matter to or confer a discretion on the minister or Commissioner of Income Tax.

SECTION 42: [Income Tax Act, sections 13.01 to 13.04, 13.06 and 38] in conjunction with the commencement section, provides for the repeal of provisions, by regulation, on or after August 1, 2010.

42 Sections 13.01 to 13.04, 13.06 (1) (

a) to (e), (2) and (3) and 38 (1.01) are repealed.

SECTION 43: [Income Tax Act, sections 14, 16 and 25] effective July 1, 2008,

reduces from 12% to 11% the corporate income tax rate established by

section 14 (2) of the Act, and

replaces references to the existing corporate income tax rate with references to the reduced corporate income tax rate in provisions relating to the foreign tax credit [section 14 (3.1) (a)] and to the tax to be paid by small businesses [section 16 (1) (b)] , credit unions [section 16 (2) (b)] and qualifying environmental trusts [section 25 (2)] .

43 Sections 14 (2) and (3.1) (a), 16 (1) (

b) and (2) (

b) and 25 (2) are amended by striking out " 12% " and substituting " 11% ".

SECTION 44: [Income Tax Act,

section 14] provides for the adjustment of the percentage used in determining amounts in respect of foreign investment income that a corporation may deduct from tax otherwise payable if there is a change to that percentage during the taxation year of the corporation.

Section 14 is amended by adding the following subsections:

(5.1) In subsection (5.2), "deduction calculation change" means any amendment to this Act that effects a change to the percentage referred to in the formula in subsection (3.1) (a).

(5.2) If, during the taxation year of a corporation, there are one or more deduction calculation changes, the corporation must determine the amounts under subsection (3.1) for that taxation year as if the percentage referred to in the formula in subsection (3.1) (

a) were the percentage determined in accordance with the following:

(

a) the corporation must divide its taxation year into notional taxation years as follows:

(

i) the first of those notional taxation years begins on the first day of the corporation's taxation year and ends on the day before the day on which the first deduction calculation change that occurs in its taxation year takes effect;

(ii) subject to subparagraph (iii), a notional taxation year will begin on each day in the corporation's taxation year on which a deduction calculation change takes effect and will end on the day before the day in its taxation year on which the next deduction calculation change takes effect;

(iii) the last notional taxation year begins on the day on which the last deduction calculation change that occurs in the corporation's taxation year takes effect and ends on the last day of its taxation year;

(

b) the corporation must, for each notional taxation year within the corporation's taxation year,

(

i) multiply the percentage referred to in the formula in subsection (3.1) (a), as that subsection read on the first day of that notional taxation year, by the fraction obtained by dividing the number of days in that notional taxation year by the number of days in the corporation's taxation year, and

(ii) round the result to the nearest one-thousandth of one percent or, if the result obtained is equidistant from 2 consecutive one-thousandths, to the higher one-thousandth;

(

c) the corporation must add to the percentage determined under paragraph (

b) for the first notional taxation year within the corporation's taxation year the percentage determined under paragraph (

b) for each of the other notional taxation years within its taxation year;

(

d) the total percentage determined under paragraph (

c) is the percentage to be used in the formula in subsection (3.1) (

a) in respect of the corporation's taxation year.

SECTION 45: [Income Tax Act,

section 16] reduces the small business tax rate from 4.5% to 3.5% effective July 1, 2008.

Section 16 (1) (

a) and (b), (2) (

a) and (

b) and (4) is amended by striking out " 4.5% " and substituting " 3.5% ".

SECTION 46: [Income Tax Act,

section 29] provides for the assessment and reassessment of the amounts deemed to have been paid in respect of the low income climate action tax credit under

section 8.1 of the Act.

Section 29 is amended

(

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

(i.1)

section 8.1 (3) [low income climate action tax credit] ; , and

(

b) in subsection (3) by adding the following clause in paragraph (d) (i):

(A.1)

section 8.1 (3) [low income climate action tax credit] ; .

SECTION 47: [Income Tax Act,

section 29] is consequential to changing the title of the Corporation Capital Tax Act .

Section 29 (2.1) is amended in clause (c) (i) (

B) by striking out " Corporation Capital Tax Act " and substituting " Financial Institutions Minimum Tax Act ".

SECTION 48: [Income Tax Act,

section 34] by applying provisions of the Income Tax Act (Canada), provides that, without limiting their liability under other provisions, an individual and the individual's qualified relation are jointly and severally liable if the individual receives an amount under

section 8.1 of the Act that is in excess of the amount to which the individual is entitled.

Section 34 is amended by adding " (1.1), (2), " after " 160.1 (1), ".

SECTION 49: [Income Tax Act,

section 38] by removing the references to paragraphs and applying all of

section 163 (2) of the federal Act for the purposes of the Act, applies the penalty provisions of the Income Tax Act (Canada) in respect of misleading statements and omissions to information provided in a return filed in respect of the low income climate action tax credit.

Section 38 (1) is amended by striking out " (a), (c), (c.2) and (

d) to (g) ".

SECTION 50: [Income Tax Act,

section 38] applies the penalty provisions of the Income Tax Act (Canada) in respect of misleading statements and omissions to information provided in a form filed in respect of the climate action dividend.

Section 38 is amended by adding the following subsection:

(1.01) In applying

section 163 (2) of the federal Act for the purposes of this Act, that

section must be read as including the following paragraph:

(

h) the amount, if any, by which

(

i) the amount that would be deemed under

section 13.02 of this Act to be an overpayment on account of the person's liability under this Act for the 2006 taxation year if that amount were calculated by reference to the information provided in the application filed under

section 13.04 (2) (b) (

i) of this Act

exceeds

(ii) the amount that is deemed under

section 13.02 of this Act to be an overpayment on account of the person's liability under this Act for the 2006 taxation year.

SECTION 51: [Income Tax Act,

section 42] provides for an appeal from an assessment in respect of the determination of the amount of an individual's low income climate action tax credit.

Section 42 (2) (

a) is amended by adding the following subparagraph:

(ii.1) the amount that, under

section 8.1 (3), the individual is deemed to have paid on account of the individual's tax payable under this Act for a taxation year, .

SECTION 52: [Income Tax Act,

section 79] adds a definition.

Section 79 (1) is amended by adding the following definition:

"distant location" means a prescribed area of British Columbia that is outside of the designated Vancouver area; .

SECTION 53: [Income Tax Act,

section 79] for eligible productions for which principal photography begins after February 19, 2008, amends the definition of "BC-based individual" to provide that the residency status of an individual is determined for each year the tax credit is claimed in respect of the production rather than the year in which principal photography of the production begins.

Section 79 (1) is amended by repealing the definition of "BC-based individual" and substituting the following:

"BC-based individual" means,

(

a) in relation to an eligible production for which principal photography begins before February 20, 2008, an individual who, by reason of being an individual described in

section 2 (1) (a), is subject to tax under

section 2 for the year preceding the year in which principal photography of the production begins, or

(

b) in relation to an eligible production for which principal photography begins after February 19, 2008, an individual who was resident in British Columbia at the end of December 31 of the year preceding the end of the taxation year for which a tax credit is claimed under this

Part in respect of the production; .

SECTION 54: [Income Tax Act,

section 80] extends the basic (film and television) tax credits by 5 years by offering the credits to productions for which principal photography of the production begins before April 1, 2013.

Section 80 (1) (a) (iii) and (5) (

a) is amended by striking out " April 1, 2008 " and substituting " April 1, 2013 ".

SECTION 55: [Income Tax Act,

section 80] provides for an additional basic tax credit in the amount of 5% of the qualified BC labour expenditure in respect of eligible productions for which principal photography begins before January 1,

Section 80 is amended

(

a) in subsection (3) by striking out " subsections (2) (

a) and (4) (a), " and substituting " subsections (2) (a), (4) (

a) and (6) (a), ", and

(

b) by adding the following subsections:

(6) In addition to the tax credits that may be claimed under subsections (2) and (4) but subject to subsection (7), the amount of the tax credit that may be claimed by a qualifying corporation under this

section is,

(

a) in the case of a production that is an interprovincial co-production, 5% of the corporation's qualified BC labour expenditure for the taxation year in respect of the production multiplied by the percentage of the copyright in the production that is owned by the corporation, or

(

b) in any other case, 5% of the corporation's qualified BC labour expenditure for the taxation year in respect of the production.

(7) For a qualifying corporation to claim a tax credit in the amount calculated under subsection (6) in respect of an eligible production, the following rules apply:

(

a) in addition to the other requirements in subsection (1), principal photography of the production must begin before January 1, 2010;

(

b) the references to "March 31, 1998" in the definition of "BC labour expenditure" in

section 79 (1) must be read as "December 31, 2007";

(

c) despite

section 79 (2) (a), if the production is intended for television broadcast as a series and principal photography of a cycle of the series begins before January 1, 2010 and is completed after December 31, 2009,

(

i) all the episodes of the cycle are to be considered a single production, if there are no more than 13 episodes in that cycle,

(ii) all the episodes of the cycle are to be considered a single production, if there are more than 13 episodes in that cycle and principal photography of each episode of that cycle begins before January 1, 2010, or

(iii) the greater of

(

A) all the episodes of the cycle for which principal photography of those episodes begins before January 1, 2010, and

(

B) the first 13 episodes of the cycle

are to be considered a single production, if there are more than 13 episodes in that cycle and principal photography of at least one episode of that cycle begins after December 31, 2009.

SECTION 56: [Income Tax Act,

section 81.11] establishes the eligibility for the distant location regional tax credit and provides for the calculation of the tax credit.

56 The following

section is added:

Distant location regional tax credit

81.11

(1) A corporation is eligible for a distant location regional tax credit for a taxation year in respect of an eligible production if

(

a) the corporation is eligible for, and has made or is making an application in accordance with

section 85 for, a tax credit in relation to the production under sections 80 and 81.1,

(

b) principal photography of the production begins after February 19, 2008,

(

c) principal photography of the production, or, in the case of a production that is intended for television broadcast as a series and that comprises a cycle of at least 3 episodes, principal photography of 3 or more of those episodes, all of which are qualifying episodes referred to in

section 81.1 (1) (c) (the "distant location qualifying episodes"), is done in a distant location for at least one day,

(

d) the corporation has obtained a valid eligibility certificate issued to it under

section 86 in respect of the production and the claimed tax credit, and

(

e) the corporation makes application for the distant location regional tax credit in accordance with

section 85.

(2) The amount of the tax credit that may be claimed by a qualifying corporation under this

section is,

(

a) subject to paragraph (b), 6% of the amount determined by the formula

QLE x

DLD

where

QLE

is the corporation's qualified BC labour expenditure for the taxation year in respect of the production,

DLD

is the number of days during which principal photography of the production is done in a distant location, and

is the number of days during which principal photography of the production is done in British Columbia, or

(

b) for a film or video production referred to in subsection (1) (

c) that is intended for television broadcast as a series, 6% of the amount determined by the formula

QLE x

DLD

where

QLE

is the corporation's qualified BC labour expenditure for the taxation year in respect of the distant location qualifying episodes referred to in subsection (1) (c),

DLD

is the number of days during which principal photography of the distant location qualifying episodes is done in a distant location, and

is the number of days during which principal photography of the distant location qualifying episodes is done in British Columbia.

(3) For the purpose of determining the amount of the tax credit under subsection (2), the references to "March 31, 1998" in the definition of "BC labour expenditure" in

section 79 (1) must be read as "December 31, 2007".

SECTION 57: [Income Tax Act,

section 82.1] extends the production services (film and television) tax credits by 5 years by offering credits to productions for which principal photography of the production begins before June 1,

Section 82.1 (1) (a) (iii) and (6) (

a) is amended by striking out " June 1, 2008 " and substituting " June 1, 2013 ".

SECTION 58: [Income Tax Act,

section 82.1] provides for an 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 before January 1,

Section 82.1 is amended by adding the following subsections:

(7) In addition to the tax credits that may be claimed under subsections (2) and (5) but subject to subsection (8), the amount of the tax credit that may be claimed by an accredited production corporation under this

section is 7% of the accredited qualified BC labour expenditure of the corporation for the taxation year in respect of the accredited production.

(8) For an accredited production corporation to claim a tax credit in the amount calculated under subsection (7) in respect of an accredited production, the following rules apply:

(

a) in addition to the other requirements in subsection (1), principal photography of the production must begin before January 1, 2010;

(

b) despite paragraph (

a) in the definition of "accredited BC labour expenditure" in

section 79 (1), the references to "March 31, 1998" in the definition of "BC labour expenditure" in

section 79 (1) must be read as "December 31, 2007".

SECTION 59: [Income Tax Act,

section 82.21] establishes the eligibility for the distant location production services tax credit and provides for the calculation of the tax credit.

59 The following

section is added:

Distant location production services tax credit

82.21

(1) A corporation is eligible for a distant location production services tax credit for a taxation year in respect of an accredited production if

(

a) the corporation is eligible for, and has made or is making an application in accordance with

section 85 for, a tax credit in relation to the production under sections 82.1 and 82.2,

(

b) principal photography of the production begins after February 19, 2008,

(

c) principal photography of the production is done in a distant location for at least one day,

(

d) the corporation has obtained an accreditation certificate issued under

section 87.1 in respect of the production and the claimed tax credit, and

(

e) the corporation makes application for the distant location production services tax credit in accordance with

section 85.

(2) The amount of the tax credit that may be claimed by an accredited production corporation under this

section is 6% of the amount determined by the formula

AQLE x

DLD

where

AQLE

is the corporation's accredited qualified BC labour expenditure for the taxation year in respect of the accredited production,

DLD

is the number of days during which principal photography of the production is done in a distant location, and

is the number of days during which principal photography of the production is done in British Columbia.

(3) For the purpose of determining the amount of the tax credit under subsection (2), the references to "March 31, 1998" in the definition of "BC labour expenditure" in

section 79 (1) must be read as "December 31, 2007".

SECTION 60: [Income Tax Act,

section 96] authorizes the Lieutenant Governor in Council to prescribe an area as a distant location.

Section 96 (2) is amended by adding the following paragraph:

(

e) prescribing as a distant location an area of British Columbia that is outside of the designated Vancouver area.

International Financial Activity Act

SECTION 61: [International Financial Activity Act,

section 1]

excludes from the meaning of business an adventure or concern in the nature of trade;

removes the requirement that an international financial business be carried on by a corporation as part of an active business of the corporation and adds a requirement that the international financial business be a qualifying business, as defined in the regulations.

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

(

a) by repealing the definition of "active business" and substituting the following:

"qualifying business" means a qualifying business as defined in the regulations; ,

(

b) in the definition of "business" by adding " but does not include an adventure or concern in the nature of trade " after " federal Act ", and

(

c) by repealing the definition of "international financial business" and substituting the following:

"international financial business" , in relation to a corporation, means a business

(

a) that is a qualifying business carried on by the corporation through a fixed place of business in British Columbia, and

(

b) all the activities of which are international financial activities; .

SECTION 62: [International Financial Activity Act,

section 1] as a result of the amendments to

section 19 of the Act by this Bill, adds the definition of "securities corporation" which is currently in

section 2 of the Act.

Section 1 is amended by adding the following definition:

"securities corporation" means

(

a) a savings institution, or

(

b) a corporation registered under the Securities Act as a dealer or underwriter; .

SECTION 63: [International Financial Activity Act,

section 2] removes the definition of "securities corporation", which is added to

section 1 of the Act by this Bill.

Section 2 (1) is amended by repealing the definition of "securities corporation" .

SECTION 64: [International Financial Activity Act,

section 2]

(

a) excludes a specified investment business from the international financial activity and replaces a reference to the acquisition or disposition of securities for a prescribed purpose with a reference to the acquisition or disposition of prescribed securities, and

(

b) adds an item relating to management services to the list of international financial activities.

Section 2 (2) is amended

(

a) in paragraph (g) (ii) by striking out " securities corporation, " and substituting " securities corporation and is not a specified investment business, as defined in

section 248 (1) of the federal Act, " and by striking out " securities for a prescribed purpose, " and substituting " prescribed securities, ", and

(

b) by adding the following paragraph:

(r.1) providing, to a non-resident person, prescribed management services that are directly related to the business operations of the non-resident person; .

SECTION 65: [International Financial Activity Act, sections 13 and 21] excludes the activity added to

section 2 of the Act by this Bill from applying in relation to an individual who is an IFA specialist.

65 Sections 13 (1) (

a) and (

b) and 21 (

d) are amended by striking out " (r) " and substituting " (r), (r.1) ".

SECTION 66: [International Financial Activity Act,

section 19] for a corporation that is not a securities corporation, includes within the meaning of IFB income any income or loss incurred because of a fluctuation in the value of a foreign currency relative to Canadian currency in respect of a prescribed foreign currency agreement that is incident to an international financial activity the income from which is otherwise included in IFB income.

Section 19 (1) is amended by repealing the description of "IFB income" and substituting the following:

IFB income

the total of the following:

(

a) the income or loss, as determined under Subdivision b of Division B of

Part I of the federal Act, of the international financial business as if the business's income for the taxation year was only from international financial activities, other than those activities referred to in

section 2 (2) (q.1) or (q.2), for that part of the taxation year that the corporation was a registered corporation;

(

b) if the corporation is not a securities corporation, the income earned or loss incurred by the international financial business in the taxation year because of a fluctuation in the value of a currency of a country other than Canada relative to Canadian currency in respect of a prescribed foreign currency agreement that is incident to an international financial activity the income from which is included in paragraph (

a) of this description; .

SECTION 67: [International Financial Activity Act,

section 19] makes the same amendment as made in the previous amendment to

section 19 in this Bill in respect of the meaning of IFB income for the international financial activities relating to patents.

Section 19 (1.1) is amended by repealing the description of "IFB income" and substituting the following:

IFB income

the total of the following:

(

a) the income or loss, as determined under Subdivision b of Division B of

Part I of the federal Act, of the international financial business as if the business's income for the taxation year was only from international financial activities referred to in

section 2 (2) (q.1) or (q.2) for that part of the taxation year that the corporation was a registered corporation;

(

b) if the corporation is not a securities corporation, the income earned or loss incurred by the international financial business in the taxation year because of a fluctuation in the value of a currency of a country other than Canada relative to Canadian currency in respect of a prescribed foreign currency agreement that is incident to an international financial activity the income from which is included in paragraph (

a) of this description; .

SECTION 68: [International Financial Activity Act,

section 65] authorizes the making of retroactive regulations under

section 19 of the Act.

Section 65 (4) is amended by striking out " 9 (1) (

d) and 13 (1) (d) " and substituting " 9 (1) (d), 13 (1) (

d) and 19 (1) and (1.1) ".

SECTION 69: [International Financial Activity Act,

section 74] is consequential to the definition of "securities corporation" moving from

section 2 to

section 1 of the Act.

Section 74 is amended by striking out "Section 2 (1)" and substituting "Section 1".

Motor Fuel Tax Act

SECTION 70: [Motor Fuel Tax Act,

section 1] makes changes to the

definitions relating to farm vehicles, locomotive fuel, marine diesel fuel and motive fuel and expands the definition of "persons with disabilities" to include permanent mental disabilities.

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

(

a) by repealing the

definitions of "family farm" , "family farm truck" , "family farm truck emblem" and "farmer" and substituting the following:

"farm" means land that is classified as a farm under the Assessment Act ;

"farm truck" means a farm vehicle, as defined in the Commercial Transport Regulations, that is licensed as a farm vehicle under the Commercial Transport Act ;

"farmer" means a person who operates a farm; ,

(

b) by repealing the definition of "locomotive fuel" and substituting the following:

"locomotive fuel" means fuel, other than biodiesel fuel, for use in an internal combustion engine in any rolling stock or other vehicle when run on rails; ,

(

c) in the

definitions of "marine diesel fuel" and "motive fuel" by striking out " or biodiesel fuel " wherever it appears,

(

d) in the definition of "motive fuel" by adding " , locomotive fuel " after " alternative motor fuel ", and

(

e) in the definition of "person with disabilities" by adding the following paragraph:

(f.1) has been certified by a medical practitioner as suffering from a permanent mental disability to the extent that it would be hazardous for the person to use public transportation, .

SECTION 71: [Motor Fuel Tax Act,

section 5] is consequential to the amendments to

section 15 (1) (

j) of the Motor Fuel Tax Act made by this Bill.

Section 5 (3) is amended by striking out " bona fide farmer under the Social Service Tax Act " and substituting " farmer ".

SECTION 72: [Motor Fuel Tax Act,

section 6] clarifies that a tax is payable on the difference between the clear fuel tax rate and the locomotive fuel tax rate for high rail vehicles when run on rails.

Section 6 is amended by adding the following subsections:

(4) A person who uses locomotive fuel other than in any rolling stock or other vehicle when run on rails must pay to the government, on or before the 15th day of the month following the month in which the fuel is used, tax equal to the difference between

(

a) the tax that the person would have paid on that fuel if the fuel had not been taxed as locomotive fuel, and

(

b) the tax paid by the person on that fuel.

(5) The tax payable under subsection (4) is in addition to any tax payable under the other provisions of this section.

SECTION 73: [Motor Fuel Tax Act,

section 12.1] increases the Victoria regional transit service area tax on motive fuel.

Section 12.1 (2) is amended by striking out " 2.5¢ per litre " and substituting " 3.5¢ per litre ".

SECTION 74: [Motor Fuel Tax Act,

section 15] amends the provision relating to coloured fuel to include all farm trucks that are used for the purposes of a farm.

Section 15 (1) (

j) is repealed and the following substituted:

(

j) a farm truck being used by a farmer or other person in the operation of the farm; .

SECTION 75: [Motor Fuel Tax Act,

section 22] is consequential to the amendments to

section 15 (1) (

j) of the Motor Fuel Tax Act made by this Bill.

Section 22 (1) is amended by striking out " family farm truck " and substituting " farm truck ".

SECTION 76: [Motor Fuel Tax Act,

section 43] allows the director to make assessments of tax with respect to fuel taxed as locomotive fuel.

Section 43 is amended by adding the following subsection:

(2.01) If it appears from an inspection, audit or examination or from information available to the director that fuel on which a person has paid tax under

section 6 has been used other than in any rolling stock or other vehicle when run on rails, the director must

(

a) determine the difference between the tax paid by the person on that fuel and the tax that the person would have paid on that fuel if the fuel had not been taxed as locomotive fuel, and

(

b) assess the person for the difference determined under paragraph (

a) of this subsection.

SECTION 77: [Motor Fuel Tax Act,

section 71] is consequential to the amendments to

section 15 (1) (

j) of the Motor Fuel Tax Act made by this Bill.

Section 71 (2) is amended

(

a) by adding " and " at the end of paragraph (e) (ii) and by repealing paragraph (e) (iii), and

(

b) in paragraph (

f) by striking out " , family farm truck emblems ".

Park Act

SECTION 78: [Park Act,

section 27]

expands the purposes for which the minister may accept gifts and bequests under the

section to include purposes of recreation areas, ecological reserves and areas protected under the Environment and Land Use Act ;

authorizes the minister to dispose of property, except real property, accepted under the section.

Section 27 of the Park Act, R.S.B.C. 1996, c. 344, is amended

(

a) in subsection (1) by striking out " for park or conservancy purposes. " and substituting " for purposes of parks, conservancies, recreation areas, ecological reserves or areas protected under the Environment and Land Use Act and administered by the minister. ", and

(

b) by adding the following subsection:

(3) Subject to the terms of a gift or bequest under subsection (1), the minister may dispose of property, other than land, accepted under that subsection.

SECTION 79: [Park Act,

section 29] is consequential to providing the minister with authority to establish the prices at which specified merchandise may be sold.

Section 29 (3) (

g) is amended by striking out " or other improvement, and " at the end of subparagraph (

i) and substituting " or other improvement; " and by repealing subparagraph (ii).

SECTION 80: [Park Act,

section 29] is consequential to authorizing the minister to establish fees, rates and charges, or ranges of fees, rates and charges, for uses in or of, or services provided in, a park, conservancy or recreation area.

Section 29 (3) is amended by repealing paragraphs (

g) to (

i) and substituting the following:

(

h) providing for the collection of the fees established by regulation under paragraph (

f) or the fees, rates or charges established by regulation or directive under

section 29.2; .

SECTION 81: [Park Act,

section 29.1]

authorizes the minister to sell or otherwise provide protected-area-related products to the public;

authorizes the minister to authorize a person to sell or dispose of such products on the minister's behalf;

authorizes the minister to sell such products to others for resale;

authorizes the minister to sell advertising space in protected-area-related publications;

authorizes the minister to establish the price at which products and advertising space may be sold.

81 The following

section is added:

Selling merchandise and advertising space

29.1

(1) The minister may

(

a) sell or otherwise dispose of to the public, or authorize a person or organization to sell or otherwise dispose of to the public, maps, informational material, services or promotional or educational products, related to parks, conservancies, recreation areas, ecological reserves or areas protected under the Environment and Land Use Act and administered by the minister,

(

b) sell products referred to in paragraph (

a) to a person for resale or other disposition,

(

c) sell or otherwise dispose of advertising space in those products, and

(

d) establish the prices at which those products and services, and that advertising space, may be sold or otherwise disposed of.

(2) The minister may establish different prices for different classes of services or products, including advertising space, for different types of dispositions or for disposition to different classes of persons.

SECTION 82: [Park Act,

section 29.2]

authorizes the minister to establish by regulation, with the approval of the Treasury Board, fees, rates and charges, or ranges of fees, rates and charges, for specified uses in or of, or services provided in, a park, conservancy or recreation area;

authorizes the minister to establish a particular fee within a range approved by the Treasury Board;

authorizes different regulations or different fees, rates or charges for different parks, conservancies or recreation areas or parts or classes of them, for different uses or services or classes of them and for different classes of persons;

authorizes the minister to exempt by regulation classes of persons from fees, rates or charges established under the

section and, in making those regulations, to grant a discretion to a park officer.

82 The following

section is added:

Fees and charges for uses and services

29.2

(1) With the prior approval of the Treasury Board, the minister may make regulations prescribing a fee, rate or charge, or a range of fees, rates or charges, payable to the government or to another person for

(

a) the use of a park, conservancy or recreation area,

(

b) the use of a natural resource or facility, including without limitation any land, campsite, road, parking facility, structure, work, installation or other improvement, in a park, conservancy or recreation area, or

(

c) a service provided by the government or another person in a park, conservancy or recreation area,

other than for a use that under this Act must be authorized by a park use permit or resource use permit.

(2) If the minister prescribes a range under subsection (1), the minister may establish by directive a fee, rate or charge for a use or service within the range prescribed for the use or service under subsection (1).

(3) Regulations under subsection (1) and fees, rates and charges established under subsection (2) may be different

(

a) for different uses and services or classes of uses and services,

(

b) for different parks, conservancies and recreation areas, parts of parks, conservancies and recreation areas or classes of parks, conservancies and recreation areas, and

(

c) for different classes of persons.

(4) Regulations under subsection (1) may

(

a) exempt different classes of persons from paying all or a portion of a fee, rate or charge, or a fee, rate or charge within a range, prescribed under that subsection, and

(

b) for the purposes of exemptions under paragraph (a), grant a discretion to a park officer.

(5) The minister must make available to the public a

schedule of fees prescribed or established under this

section

(

a) annually, and

(

b) whenever a particular fee, rate or charge is changed.

Ports Property Tax Act

SECTION 83: [Ports Property Tax Act,

section 3] continues the property tax rate cap on designated port property until the 2018 taxation year.

Section 3 (2) of the Ports Property Tax Act, S.B.C. 2004, c. 7, is amended by striking out " 2008 taxation years " and substituting " 2018 taxation years ".

SECTION 84: [Ports Property Tax Act,

section 4] continues providing a lower cap for municipal tax rates in relation to new investment in designated port property.

Section 4 (2) is amended by striking out " 2009 taxation years " and substituting " 2019 taxation years ".

SECTION 85: [Ports Property Tax Act,

section 5] is consequential to the addition of

section 5.1 by this Bill.

Section 5 (1) is amended by adding " with respect to the 2004 through 2008 taxation years " after " under that

section ".

SECTION 86: [Ports Property Tax Act,

section 5.1] provides for compensation to local governments for the 2009 to 2018 taxation years.

86 The following

section is added before the heading "Transitional Provisions":

Compensation to local governments

for 2009 to 2018 taxation years

5.1

(1) In this section, "consumer price index" or "CPI" means, for any 12-month period, the result arrived at by

(

a) aggregating the Consumer Price Index for British Columbia, as published by Statistics Canada under the authority of the Statistics Act (Canada), adjusted in the manner that may be prescribed, for each month in that period,

(

b) dividing the aggregate obtained under paragraph (

a) by 12, and

(

c) rounding the result obtained under paragraph (

b) to the nearest one-thousandth or, if the result obtained is equidistant from 2 consecutive one-thousandths, to the higher one-thousandth.

(2) If property in a municipality listed in paragraph (

a) is designated for the purposes of

section 3, then, for the purpose of compensating the municipality in relation to the municipal tax rate restriction under that section,

(

a) with respect to the 2009 taxation year, the minister must pay out of the consolidated revenue fund to that municipality, in accordance with subsection (4), the amount indicated opposite the name of the municipality multiplied by (1 + inflation adjustment) and, rounded to the nearest dollar or, if equidistant from 2 dollar amounts, to the higher nearest dollar:

Municipality

Annual Payment

The Corporation of Delta

$313 704

The Corporation of the City of North Vancouver

$1 351 600

The Corporation of the District of North Vancouver

$764 036

City of Port Moody

$532 109

City of Prince Rupert

$1 490 251

District of Squamish

$371 766

City of Vancouver

$44 826

where

inflation adjustment

subject to subsection (3), a number calculated in accordance with the following formula, rounded to the nearest one-thousandth or, if the result obtained is equidistant from 2 consecutive one-thousandths, to the higher one-thousandth:

CPI for the 2008 taxation year

– 1

CPI for the 2007 taxation year

and

(

b) with respect to the 2010 to 2018 taxation years, the minister must pay out of the consolidated revenue fund to that municipality, in accordance with subsection (4), an annual payment for each taxation year determined by the following formula:

annual payment

previous year's annual payment

x (1 + inflation adjustment)

where

previous year's

annual payment

the annual payment for the previous taxation year, and

inflation adjustment

subject to subsection (3), a number calculated in accordance with the following formula, rounded to the nearest one-thousandth or, if the result obtained is equidistant from 2 consecutive one-thousandths, to the higher one-thousandth:

CPI for the preceding taxation year

– 1

CPI for the second preceding taxation year

(3) If the inflation adjustment calculated under subsection (2) (

a) or (

b) is less than zero, the inflation adjustment is deemed to be equal to zero.

(4) A payment under subsection (2) is to be made in each taxation year for which the property is designated, ending not later than the 2018 taxation year.

SECTION 87: [Ports Property Tax Act,

section 5.2] provides that the property tax rate cap does not apply to property that is subject to a revitalization tax exemption under the Community Charter or Vancouver Charter .

87 The following

section is added before the heading "Transitional Provisions":

Revitalization tax exemptions

5.2 If a revitalization tax exemption under

section 226 of the Community Charter or

section 396E of the Vancouver Charter applies to a designated eligible port property,

(

a) sections 3 and 4 of this Act do not apply to that property, and

(

b) for greater certainty,

section 5.1 of this Act continues to apply to that property.

Property Transfer Tax Act

SECTION 88: [Property Transfer Tax Act,

section 4] repeals three

definitions, as a consequence of the repeal by this Bill of the mortgage requirements for the first time home buyers' exemption under the Act, and increases the qualifying value for the purposes of the first time home buyers' exemption from $375 000 to $425 000.

Section 4 (1) of the Property Transfer Tax Act, R.S.B.C. 1996, c. 378, is amended

(

a) by repealing the

definitions of "critical illness or injury insurance" , "eligible indebtedness" and "eligible security" , and

(

b) in the definition of "qualifying value" by striking out " $375 000 " and substituting " $425 000 ".

SECTION 89: [Property Transfer Tax Act,

section 4.1] amends the criteria for establishing the fair market value of a home transferred from Habitat for Humanity, as a consequence of the repeal of the definition of "eligible security" and the removal of the mortgage registration deadline by this Bill.

Section 4.1 (

b) is repealed and the following substituted:

(

b) the principal amount secured by the first ranking of the mortgages that

(

i) secure financing applied to a transfer effected by an eligible transaction, and

(ii) are between the transferee and Habitat for Humanity.

SECTION 90: [Property Transfer Tax Act,

section 5] removes the requirement for a mortgage in order to qualify for the first time home buyers' exemption under the Act.

Section 5 is amended

(

a) in subsection (1) by adding " and " at the end of paragraph (a), by striking out " , and " at the end of paragraph (

b) and by repealing paragraph (c), and

(

b) by repealing subsection (2) (

b) and substituting the following:

(

b) disclose that the property is a qualifying property, and .

SECTION 91: [Property Transfer Tax Act,

section 8] removes the mortgage-related requirements for a homeowner to retain eligibility for the first time home buyers' exemption under the Act, as a consequence of the repeal by this Bill of the mortgage requirements for the first time home buyers' exemption.

Section 8 is amended

(

a) by repealing subsection (1) and substituting the following:

(1) A transferee who has applied for an exemption under

section 5 or 6 or a refund under

section 7 must establish a qualifying residence on the property within the meaning of subsection (2) of this section. , and

(

b) by repealing subsections (3) and (4).

SECTION 92: [Property Transfer Tax Act,

section 9] removes the mortgage-related criteria for disqualification from exemption for the first time home buyers' exemption under the Act, as a consequence of the repeal by this Bill of the mortgage requirements for the first time home buyers' exemption.

Section 9 is amended

(

a) in subsection (1) (

a) by striking out " or (c) ",

(

b) by repealing subsection (1.1) and substituting the following:

(1.1) If a transferee does not meet the obligations under

section 8 only because the transferee, before the first anniversary of the registration date, fails to establish a qualifying residence as required under

section 8 (2) (a) (ii) or (2) (b) (i) (

B) as applicable, the transferee is liable under subsection (2.1) of this

section from the date of the failure to establish a qualifying residence. , and

by repealing subsection (4).

SECTION 93: [Property Transfer Tax Act,

section 10] removes exemptions from mortgage-related disqualification from the first time home buyers' exemption under the Act, as a consequence of the repeal by this Bill of the mortgage requirements for the first time home buyers' exemption.

Section 10 is repealed and the following substituted:

Exemption retained

Section 9 (1) to (2.1) does not apply to a transferee who has obtained an exemption under

section 5 or 6 or a refund under

section 7 if the transferee does not comply with

section 8 (2) (

a) or (

b) only because

(

a) the transferee dies before the first anniversary date of the registration date, or

(

b) the property is transferred by the transferee pursuant to a written separation agreement or a court order under the Family Relations Act .

SECTION 94: [Property Transfer Tax Act,

section 11] amends the relative priority of a lien filed under this Act to remove reference to the mortgage requirement, as a consequence of the repeal by this Bill of the mortgage requirements for the first time home buyers' exemption under the Act.

Section 11 (4) is repealed and the following substituted:

(4) A lien created on the property under subsection (2) or renewed under subsection (3) (

b) has priority over all other claims of every person except any claims secured by liens, charges or encumbrances registered against the property before the date on which the lien form referred to in subsection (1) was registered to create the lien.

Social Service Tax Act

SECTION 95: [Social Service Tax Act,

section 1]

amends the definition of "purchase price" consequential to the amendment to

section 74 of the Act made by this Bill;

moves the definition of "registered charity" from

section 88.2 of the Act consequential to the amendment to the definition of "sale" in the Act made by this Bill;

amends the definition of "sale" to clarify that the provision by a registered charity of a gift of nominal value to a person in return for a donation is not a sale under the Act;

amends the definition of "use" consequential to the amendment to the definition of "sale" in the Act made by this Bill.

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

(

a) in the definition of "purchase price" by adding the following paragraph:

(

g) in relation to fuel oil that is blended with biodiesel fuel, means the amount calculated in accordance with the following formula:

purchase price = C x

where

the total consideration paid by the purchaser for the blend of fuel oil and biodiesel fuel,

the volume of fuel oil purchased, and

the total volume of the blend of fuel oil and biodiesel fuel purchased; ,

(

b) by adding the following definition:

"registered charity" has the same meaning as in

section 248 (1) of the Income Tax Act (Canada); ,

(

c) in the definition of "sale" by striking out everything after paragraph (

c) and substituting the following:

but does not include

(

d) the provision of tangible personal property that, in accordance with the regulations, is merely incidental to a contract for the provision of services that are not subject to tax under this Act, and

(

e) except in prescribed circumstances, the provision by a registered charity, or a person acting on behalf of a registered charity, of tangible personal property of nominal value as a gift in return for a donation, all of which is provided to the registered charity; , and

(

d) in the definition of "use" by striking out " and " at the end of paragraph (e), by adding " and " at the end of paragraph (e.1) and by adding the following paragraph:

(e.2) the provision by a registered charity of tangible personal property of nominal value as a gift in return for a donation, .

SECTION 96: [Social Service Tax Act,

section 1] amends the definition of "purchase price" consequential to the addition of Division 11 to

Part 2 of the Act by this Bill.

Section 1 is amended in the definition of "purchase price" by adding the following paragraph:

(

h) for the purposes of

section 68.2 (3) in relation to a contract for the supply and installation of improvements to real property, the greater of the following:

(

i) the amount paid by the contractor for the tangible personal property referred to in

section 68.2 (1) that would have been the purchase price under paragraph (

a) of this definition had

section 68.2 (2) not applied in relation to that contract;

(ii) that part of the total consideration accepted by the contractor under the contract that is expressly attributed to the value of the tangible personal property referred to in

section 68.2 (1); .

SECTION 97: [Social Service Tax Act,

section 4.1] authorizes the commissioner to determine, for the purposes of the

definitions of "sale" and "use" in the Act as amended by this Bill, whether tangible personal property has a nominal value.

Section 4.1 is amended by adding the following subsection:

(3) For the purposes of paragraph (

e) of the definition of "sale" and paragraph (e.2) of the definition of "use", the commissioner may determine whether tangible personal property or a type of tangible personal property has a nominal value.

SECTION 98: [Social Service Tax Act,

section 11] amends the application of tax on tangible personal property brought into British Columbia to allow for adjustments on the tax payable on a motor vehicle if the seller of the motor vehicle accepted another vehicle on account of the price of the motor vehicle sold.

Section 11 is amended

(

a) in subsection (4) by striking out " (4.1) and (5) " and substituting " (4.1), (5) and (7) ", and

(

b) by adding the following subsections:

(6) Subsection (7) applies to a motor vehicle

(

a) acquired outside British Columbia but in Canada, and

(

b) brought or sent into British Columbia or the delivery of which is received in British Columbia.

(7) Subject to subsection (8), if a motor vehicle, on which the person referred to in subsection (3) has previously paid the tax under this Act, is accepted at the time of sale of a motor vehicle to which this

section applies by the seller on account of the price of the motor vehicle sold, the person referred to in subsection (3) must pay tax at the rate of

(a) 7% of the difference between the purchase price of the motor vehicle sold and the credit allowed for the motor vehicle accepted on account of the purchase price in trade, or

(

b) if the motor vehicle sold is a passenger vehicle, at the applicable rate as follows:

(i) 7% of the difference referred to in paragraph (a), if the purchase price of the passenger vehicle is less than $55 000;

(ii) 8% of the difference referred to in paragraph (a), if the purchase price of the passenger vehicle is $55 000 or more but less than $56 000;

(iii) 9% of the difference referred to in paragraph (a), if the purchase price of the passenger vehicle is $56 000 or more but less than $57 000;

(iv) 10% of the difference referred to in paragraph (a), if the purchase price of the passenger vehicle is $57 000 or more.

(8) Subsections (6) and (7) do not apply to a motor vehicle to which

section 12 applies or to a multijurisdictional vehicle.

SECTION 99: [Social Service Tax Act,

section 26] provides that the additional tax charged under

section 26 of the Act on passenger vehicle rentals does not apply to leases for 8 consecutive hours or less or for more than 28 consecutive days.

Section 26 (2) is repealed and the following substituted:

(2) Subsection (1) does not apply if the passenger vehicle that is the subject matter of the lease is leased to the lessee for a period of

(a) 8 consecutive hours or less, or

(

b) more than 28 consecutive days.

SECTION 100: [Social Service Tax Act,

section 54] clarifies that in calculating the tax payable on dedicated telecommunication services, the "total distance" element of the calculation is not to include distances determined in relation to satellites.

Section 54 (2) is amended by repealing the description of "total distance" and substituting the following:

total distance

(

a) if the dedicated telecommunication system does not include a transmitter that is a satellite, the total of the distances, measured in a direct line, between transmitters connected to the system, with the distance between any 2 transmitters connected to the system included only once in the calculation of total distance, and

(

b) if the dedicated telecommunication system does include a transmitter that is a satellite, the total of the distances, measured in a direct line, between transmitters that are connected to the system but that are not satellites, with the distance between any 2 of these transmitters included only once in the calculation of total distance.

SECTION 101: [Social Service Tax Act, Division 11 of

Part 2] adds a Division imposing tax, in relation to contracts for the improvement to real property, either on contractors or on the persons with whom the contractors have entered into their contracts, depending on specified conditions.

101 The following Division is added to

Part 2:

Division 11 – Improvements to Real Property

Tax on contracts for improvements to real property

68.2

(1) Subject to subsection (2), a contractor who, for the purposes of fulfilling a contract for the supply and installation of improvements to real property,

(

a) either

(

i) acquires tangible personal property at a sale in British Columbia, or

(ii) brings or sends into British Columbia, or receives delivery of in British Columbia, tangible personal property, and

(

b) under the terms of the contract, uses the tangible personal property so that it ceases to be tangible personal property and becomes part of the real property

must pay to the government a tax at the rate of 7% of the purchase price of the tangible personal property.

(2) A contractor referred to in subsection (1) is not liable for the tax imposed under that subsection if there is

(

a) an agreement between the contractor and the person with whom the contractor has entered into the contract that

(

i) specifically states that the person is liable for the tax, and

(ii) sets out the value of the tangible personal property referred to in subsection (1) on which the tax will be applied, and

(

b) written evidence of the agreement referred to in paragraph (a).

(3) If subsection (2) applies, the person referred to in subsection (2) must pay to the government a tax at the rate of 7% of the purchase price of the tangible personal property referred to in subsection (1).

(4) The tax payable under this

section must be paid at the time the tangible personal property is appropriated for the contract referred to in subsection (1).

(5) If tax is paid under this

section in respect of tangible personal property, then no tax is payable in respect of that property under

section 5 or 11.

Exemption

68.3 A contractor referred to in

section 68.2 (1) is exempt from tax imposed by that

section if the person with whom the contractor has entered into the contract

(

a) would be eligible for an exemption under this Act or

section 87 of the Indian Act (Canada) on that tangible personal property if the person were to purchase it, and

(

b) provides the contractor with a signed certification, in a form satisfactory to the commissioner, certifying the matter referred to in paragraph (a).

Application of other provisions of Act

68.4 For the purposes of applying the other provisions of this Act in relation to a tax imposed by this Division,

(

a) if

section 68.2 (2) applies to a contract referred to in that section, entering into the contract is deemed to be a retail sale, by the contractor to the person referred to in

section 68.2 (2), of the tangible personal property referred to in

section 68.2 (1), and

(

b) if

section 68.2 (2) does not apply to a contract referred to in that section, the acquisition of tangible personal property referred to in

section 68.2 (1) is deemed to be a retail sale by the seller of that property to the contractor.

SECTION 102: [Social Service Tax Act,

section 71] adds an exemption for dental and optical appliances when provided as part of a promotional distribution, if certain conditions apply.

Section 71 (

f) is repealed and the following substituted:

(

f) dental and optical appliances, when

(

i) sold on the prescription of a dentist, an optometrist or a physician, or

(ii) provided as part of a promotional distribution to a dentist, an optometrist, an optician or a physician, if the dental or optical appliances are otherwise available to patients only by prescription; .

SECTION 103: [Social Service Tax Act,

section 74] restricts the exemption on coal and coke to the circumstance when it is purchased for use in a residential dwelling unit and adds an exemption for biodiesel fuel.

Section 74 is amended

(

a) by adding the following paragraph:

(a.1) biodiesel fuel; , and

(

b) in paragraph (

d) by adding " when purchased for use in a residential dwelling unit " at the end of the paragraph.

SECTION 104: [Social Service Tax Act,

section 75]

adds exemptions for non-motorized 3-wheel tricycles and electric power-assisted 2-wheel bicycles and 3-wheel tricycles in certain circumstances;

authorizes tax reductions on fuel-efficient vehicles in accordance with the regulations.

Section 75 is amended

(

a) in subsection (1) by adding the following paragraphs:

(a.1) non-motorized 3-wheel tricycles each wheel of which has a diameter of 350 mm or more;

(a.2) electric power-assisted 2-wheel bicycles and 3-wheel tricycles

(

i) that are equipped with pedals or hand cranks for propelling the cycle by muscular power,

(ii) that are equipped with a motor with a continuous power output rating of not more than 500 watts, capable of propelling the cycle no faster than 32 km/h on level ground without pedaling,

(iii) that are equipped with a mechanism that prevents the motor from turning on or engaging until the cycle reaches a speed of 3 km/h,

(iv) that are equipped with wheels that each have a diameter of 350 mm or more, and

(

v) that are not equipped with a combustion engine;

(a.3) kits for converting non-motorized 2-wheel bicycles or 3-wheel tricycles into cycles described in paragraph (a.2); , and

(

b) by adding the following subsections:

(3) Tax payable under sections 5 to 25 and 112.3 by a purchaser, user or lessee of a motor vehicle that qualifies under the regulations as a fuel-efficient vehicle is reduced by the amount set out in the regulations.

(4) Subsection (1) (a.2) and (a.3) is repealed on April 1, 2011.

SECTION 105: [Social Service Tax Act,

section 76] clarifies the exemption, in relation to industry and commerce, for chemical substances, catalysts and direct agents.

Section 76 is amended

(

a) by repealing subsection (1) (a),

(

b) by repealing subsection (1) (

b) and substituting the following:

(

b) subject to subsection (2) and the regulations, a chemical substance, catalyst or direct agent used to produce or modify a reaction that is essential for the processing or manufacture of a product for sale or lease; , and

(

c) by repealing subsections (1) (b.1) and (5).

SECTION 106: [Social Service Tax Act,

section 88.2] is consequential to the amendment to

section 1 of the Act made by this Bill.

Section 88.2 (1) is amended by repealing the definition of "registered charity" .

SECTION 107: [Social Service Tax Act,

section 88.2] allows refunds of tax on certain purchases of medical equipment by charitable organizations in relation to tax paid with funds acquired by grants under a certificate of affiliation under the Gaming Control Act .

Section 88.2 (1) is amended by repealing the definition of "charity funds" and substituting the following:

"charity funds" means the funds of an eligible charity other than funds provided directly or indirectly by

(

a) a health authority, a health facility or a local authority,

(

b) the government of British Columbia, except grants under a certificate of affiliation under

section 41 of the Gaming Control Act ,

(

d) a prescribed person; .

SECTION 108: [Social Service Tax Act,

section 90.4] authorizes refunds of tax on purchases or leases of fuel-efficient vehicles if the vehicle did not qualify for a tax reduction on the date of purchase or lease, but would have qualified had it been purchased or leased within 6 months after the date of purchase or lease.

108 The following

section is added to

Part 4:

Fuel-efficient vehicles

90.4

(1) In this section, "fuel-efficient vehicle" has the meaning prescribed in the regulations.

(2) On application by a person who purchases or leases a vehicle that

(

a) on the date of purchase or lease does not qualify for a reduction under

section 75 (3) as a fuel-efficient vehicle, and

(

b) would have qualified for a reduction referred to in paragraph (

a) had the vehicle been purchased or leased within 6 months after the date of purchase or lease,

the commissioner must refund to the person out of the consolidated revenue fund an amount equal to the amount the person would have received as a tax reduction under

section 75 (3) had the vehicle qualified for the reduction on the date of purchase or lease, provided that the person satisfies the commissioner that the vehicle qualifies under this section.

SECTION 109: [Social Service Tax Act,

section 130] authorizes the making of regulations consequential to the amendments to

section 28 and 75 of the Act made by this Bill.

Section 130 is amended by adding the following paragraphs:

(

k) prescribing fuel-efficient vehicles for the purposes of

section 75 (3);

(

l) prescribing tax reductions under

section 75 (3), including different reductions for different classes of fuel-efficient vehicles.

SECTION 110: [Social Service Tax Act,

section 138] authorizes the making of regulations

consequential to the amendments to the definition of "sale" in

section 1 of the Act and to

section 76 of the Act made by this Bill,

to exempt work-related safety equipment and apparel in certain circumstances and to make rules regarding how the exemption is to be claimed, and

to make rules regarding how a benefit under an agreement under

section 93.1 is to be claimed and to authorize the cancellation of those agreements in certain circumstances.

Section 138 (1) is amended

(

a) by adding the following paragraphs:

(c.11) prescribing circumstances for the purposes of paragraph (

e) of the definition of "sale" in

section 1;

(g.2) prescribing

(

i) work related safety equipment and apparel for the purposes of

section 71 (k),

(ii) circumstances when prescribed work related safety equipment and apparel is exempt under that section,

(iii) requirements for claiming the exemption and for substantiating non-collection of tax on the sale of exempt equipment, and

(iv) circumstances when

section 9 does not apply to persons who have acquired equipment and apparel prescribed under subparagraph (i);

(p.1) respecting the exemption for chemical substances, catalysts and direct agents under

section 76 (1) (b), including regulations identifying chemical substances that qualify or do not qualify for the exemption; , and

(

b) in paragraph (

s) by striking out " , and the imposition of penalties for the failure to comply with the agreement " and substituting " the requirements for claiming a benefit under an agreement, and the imposition of penalties or the cancellation of the agreement for the failure to comply with the agreement, this Act or the regulations ".

South Coast British Columbia Transportation Authority Act

SECTION 111: [South Coast British Columbia Transportation Authority Act,

section 34] changes the tax exemption provision to clarify that the exemption may relate to property rather than persons and be may made subject to conditions.

Section 34 (3) of the South Coast British Columbia Transportation Authority Act, S.B.C. 1998, c. 30, is repealed and the following substituted:

(3) Despite subsections (1) and (2), for the purpose of the construction, acquisition or operation of

(

a) the Rapid Transit Project,

(

b) another rail transportation system,

(

c) a designated project,

(

d) a busway, or

(

e) a major crossing,

the Lieutenant Governor in Council may, by order, establish exemptions in respect of land or improvements, or both, or in respect of a portion of land or improvements, or both, from taxation under any or all of the Acts referred to in subsection (3.4).

(3.1) A tax exemption under subsection (3) may be made with respect to

(

a) land, improvements or portions of land or improvements described in the order under that subsection, or

(

b) land, improvements or portions of land or improvements that are within a category described in the order.

(3.3) A tax exemption under subsection (3) applies only to the extent that the land or improvement or portion of land or improvement is held, used or occupied for the purpose set out in that subsection.

(3.4) A tax exemption under subsection (3) may be provided for the following:

(

a) this Act;

(

b) the Assessment Authority Act ;

(

c) the Community Charter ;

(

d) the Hospital District Act ;

(

e) the Local Government Act ;

(

f) the Municipal Finance Authority Act ;

(

g) the Police Act ;

(

h) the School Act ;

(

i) the Vancouver Charter .

South Moresby Implementation Account Act

SECTION 112: [South Moresby Implementation Account Act] repeals the Act.

112 The South Moresby Implementation Account Act, R.S.B.C. 1996, c. 435, is repealed.

Special Accounts Appropriation and Control Act

SECTION 113: [Special Accounts Appropriation and Control Act,

section 9]

establishes the BC Arts and Culture Endowment special account consisting of the Arts Legacy Fund Sub-account and the BC150 Cultural Fund Sub-account;

continues the Olympic Arts Fund special account as the Arts Legacy Fund Sub-account;

establishes the BC150 Cultural Fund Sub-account;

authorizes the minister to pay out the interest in or attributable to the Arts Legacy Fund Sub-account to support the creation, development and presentation of works of art in order to provide exposure of the works of art;

authorizes the minister to pay out the earnings of the BC150 Cultural Fund Sub-account on the recommendation of and for the purposes of the British Columbia Arts Council.

Section 9 of the Special Accounts Appropriation and Control Act, R.S.B.C. 1996, c. 436, is repealed and the following substituted:

BC Arts and Culture Endowment

(1) In this section:

"Arts Council" means the British Columbia Arts Council continued under the Arts Council Act ;

"works of art" includes visual, media, literary and performing arts.

(2) The BC Arts and Culture Endowment special account is established consisting of the Arts Legacy Fund Sub-account continued under subsection (3) and the BC150 Cultural Fund Sub-account established under subsection (4).

(3) The Olympic Arts Fund special account is continued as the Arts Legacy Fund Sub-account consisting of the following:

(

a) the $20 million in the Olympic Arts Fund special account on the day before this subsection comes into force, excluding amounts attributed as interest;

(

b) interest attributed to the Olympic Arts Fund special account and not paid out before this subsection comes into force;

(

c) interest calculated on and attributable to the balance in the Arts Legacy Fund Sub-account.

(4) The BC150 Cultural Fund Sub-account is established consisting of the following:

(a) $150 million that the minister transfers from a vote, as defined in the Financial Administration Act ;

(

b) all earnings of the sub-account, net of any associated investment fees and expenses.

(5) Despite

section 21 (3) of the Financial Administration Act , the minister may pay out of the BC Arts and Culture Endowment special account as follows:

(

a) from the Arts Legacy Fund Sub-account, amounts referred to in subsection (3) (

b) and (

c) of this

section to support the creation, development or presentation of works of art at events or venues the minister considers will provide significant exposure of those works of art;

(

b) from the BC150 Cultural Fund Sub-account, amounts referred to in subsection (4) (

b) of this

section on the recommendation and for the purposes of the Arts Council.

SECTION 114: [Special Accounts Appropriation and Control Act,

section 9.6]

establishes the Park Enhancement Fund special account;

provides that the special account consists of an initial balance of $100 000 and