Bill Text: CA AB1999 | 2013-2014 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Personal income and corporation taxes: credits: rehabilitation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB1999 Detail]
Download: California-2013-AB1999-Amended.html
Bill Title: Personal income and corporation taxes: credits: rehabilitation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB1999 Detail]
Download: California-2013-AB1999-Amended.html
BILL NUMBER: AB 1999 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 2, 2014
AMENDED IN ASSEMBLY MAY 15, 2014
AMENDED IN ASSEMBLY APRIL 30, 2014
AMENDED IN ASSEMBLY APRIL 1, 2014
INTRODUCED BY Assembly Member Atkins
FEBRUARY 20, 2014
An act to add and repeal Sections 38.9, 17053.86, and 23686 of the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1999, as amended, Atkins. Personal income and corporation
taxes: credits: rehabilitation.
The Personal Income Tax Law and the Corporation Tax Law allow
various credits against the taxes imposed by those laws.
This bill would allow a credit against those taxes for each
taxable year beginning on or after January 1, 2015, and before
January 1, 2021, 2023, in an amount,
determined pursuant to a specified section of the Internal Revenue
Code, that is paid or incurred during the taxable year for
rehabilitation of certified historic structures. This bill would
provide for a 25% 20% credit, or
30% 25% credit if the structure meets
specified criteria, for rehabilitation of a certified historic
structure within the state to be allocated by the Governor's Office
of Business and Economic Development in an aggregate amount of
$100,000,000 $80,000,000 per calendar
year, as specified. This bill would require the Legislative Analyst
to, on an annual basis, collaborate with the Governor's Office of
Business and Economic Development to review the tax credit, as
provided.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares that California'
s historic buildings are an important asset to communities throughout
the state, and that the preservation and restoration of these
buildings is important to enhancing civic pride, increasing tourism,
and maintaining vibrant neighborhoods.
(b) The Legislature further finds and declares all of the
following:
(1) The federal Historic Preservation Tax Incentives program,
currently available to California's income producing historic
properties, has generated nearly $1.5 billion in investment during
the last 10 years.
(2) While 35 states have similar state tax credits or incentives
for historic preservation, no such incentive exists in California.
(3) States that have partnered a state incentive with the federal
Historic Preservation Tax Incentive have reaped significant economic
development benefits, including construction and building industry
job creation, increased state tax revenues through increased
employment and wages, increased local property tax revenues through
increased property values, and increased local tax revenues through
sales taxes and heritage tourism.
(4) Over the last 10 years, California has had 129 projects
qualify for the federal Historic Preservation Tax Incentives program.
These projects have been located in 20 different counties.
(5) As California communities continue to adjust and adapt to the
dissolution of redevelopment agencies, proven tools are still needed
to incentivize economic development and revitalize economically
distressed areas.
SEC. 2. Section 38.9 is added to the Revenue and Taxation Code, to
read:
38.9. (a) The Legislative Analyst shall, on an annual basis
beginning January 1, 2016, collaborate with the Governor's Office of
Business and Economic Development to review the effectiveness of the
tax credits allowed by Sections 17053.86 and 23686. The review shall
include, but is not limited to, an analysis of the demand for the tax
credit, the types and uses of projects receiving the tax credit, the
jobs created by the use of the tax credits, and the economic impact
of the tax credits.
(b) This section shall remain in effect only until January 1,
2022, 2024, and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2022, 2024, deletes or
extends that date.
SEC. 3. Section 17053.86 is added to the Revenue and Taxation
Code, to read:
17053.86. For each taxable year beginning on or after January 1,
2015, and before January 1, 2021, 2023,
there shall be allowed as a credit against the "net tax," as defined
in Section 17039, an amount determined in accordance with Section 47
of the Internal Revenue Code, except as follows:
(a) (1) In lieu of the percentages specified in Section 47(a) of
the Internal Revenue Code, except as provided in paragraph (2), the
applicable percentage shall be 25 20
percent of the qualified rehabilitation expenditures with respect to
a certified historic structure.
(2) The applicable percentage shall be 30
25 percent of the qualified rehabilitation expenditures with
respect to a certified historic structure if that certified historic
structure meets one of the following criteria:
(A) The rehabilitated structure is located on either
federal surplus property, if obtained by a local agency
under Section 54142 of the Government Code, on surplus state real
property, as defined by Section 11011.1 of the Government Code, or on
surplus land, as defined by subdivision (b) of Section 54221 of the
Government Code.
(B) The rehabilitated structure includes affordable housing for
lower-income households, as defined by Section 50079.5 of the Health
and Safety Code.
(C) The structure is located in a designated census tract, as
defined in paragraph (7) of subdivision (b) of Section 17053.73.
(D) The structure is a part of a military base reuse authority
established pursuant to Title 7.86 (commencing with Section 67800) of
the Government Code.
(E) The structure is a transit-oriented development that is a
higher-density, mixed-use development within a walking distance of
one-half mile of a transit station.
(b) For purposes of this section, a certified historic structure
means a structure in this state that appears on either the National
Register of Historic Places or the California Register of Historical
Resources.
(c) A deduction shall not be allowed under this part for any
expense for which a credit is allowed by this section.
(d) If a credit is allowed under this section with respect to any
property, the basis of that property shall be reduced by the amount
of the credit allowed.
(e) In the case where the credit allowed by this section exceeds
the "net tax," the excess may be carried over to reduce the "net tax"
in the following year, and the seven succeeding years if necessary,
until the credit is exhausted.
(f) For purposes of this section, the Governor's Office of
Business and Economic Development shall do the following:
(1) (A) On and after January 1, 2015, and before January 1,
2021, 2023, allocate tax credits to
applicants.
(B) (i) The credit shall be allocated to the partners of a
partnership owning the project in accordance with the partnership
agreement, regardless of how the federal historic rehabilitation tax
credit with respect to the project is allocated to the partners, or
whether the allocation of the credit under the terms of the agreement
has substantial economic effect, within the meaning of Section 704
(b) of the Internal Revenue Code.
(ii) To the extent the allocation of the credit to a partner under
this section lacks substantial economic effect, any loss or
deduction otherwise allowable under this part that is attributable to
the sale or other disposition of that partner's partnership interest
made prior to the expiration of the federal credit shall not be
allowed in the taxable year in which the sale or other disposition
occurs, but shall instead be deferred until, and treated as if, it
occurred in the first taxable year immediately following the taxable
year in which the federal credit period expires for the project
described in clause (i).
(2) Establish a procedure for applicants to file with the Governor'
s Office of Business and Economic Development a written application,
on a form jointly prescribed by that office and the Office of
Historic Preservation for the allocation of the tax credit.
(3) Establish criteria consistent with the requirements of this
section, for allocating tax credits. Criteria shall include, but are
not limited to, the following:
(A) The number of jobs created by the rehabilitation project, both
during and after the rehabilitation of the structure.
(B) The expected increase in state and local tax revenues derived
from the rehabilitation project, including those from increased wages
and property taxes.
(C) Any additional incentives or contributions included in the
rehabilitation project from federal, state, or local governments.
(4) Determine and designate, in consultation with the Office of
Historic Preservation, applicants that meet the requirements of this
section to ensure that the rehabilitation project upholds historical
values in terms of architectural and aesthetic standards.
(5) Process and approve, or reject, all applications.
(6) Subject to the annual cap established as provided in
subdivision (g), allocate an aggregate amount of credits under this
section and Section 23686, and allocate any carryover of unallocated
credits from prior years.
(7) Certify tax credits allocated to taxpayers.
(8) Provide the Franchise Tax Board an annual list of the
taxpayers that were allocated a credit pursuant to this section and
Section 23686, including each taxpayer's taxpayer identification
number, and the amount allocated to each taxpayer.
(g) The aggregate amount of credits that may be allocated in any
calendar year pursuant to this section and Section 23686 shall be an
amount equal to the sum of all of the following:
(1) One hundred million dollars ($100,000,000)
Eighty million dollars ($80,000,000) in tax credits for
the 2015 calendar year and each calendar year thereafter, through and
including the 2020 2022 calendar year.
(2) The unused allocation tax credit amount, if any, for the
preceding calendar year.
(h) This section shall remain in effect only until December 1,
2021, 2023, and as of that date is
repealed.
SEC. 4. Section 23686 is added to the Revenue and Taxation Code,
to read:
23686. For each taxable year beginning on or after January 1,
2015, and before January 1, 2021, 2023,
there shall be allowed as a credit against the "tax," as defined in
Section 23036, an amount determined in accordance with Section 47 of
the Internal Revenue Code, except as follows:
(a) (1) In lieu of the percentages specified in Section 47(a) of
the Internal Revenue Code, except as provided in paragraph (2), the
applicable percentage shall be 25 20
percent of the qualified rehabilitation expenditures with respect to
a certified historic structure.
(2) The applicable percentage shall be 30
25 percent of the qualified rehabilitation expenditures with
respect to a certified historic structure if that historic structure
meets one of the following criteria:
(A) The rehabilitated structure is located on either
federal surplus property, if obtained by a local agency
under Section 54142 of the Government Code, on surplus state real
property, as defined by Section 11011.1 of the Government Code, or on
surplus land, as defined by subdivision (b) of Section 54221 of the
Government Code.
(B) The rehabilitated structure includes affordable housing for
lower-income households, as defined by Section 50079.5 of the Health
and Safety Code.
(C) The structure is located in a designated census tract, as
defined in paragraph (7) of subdivision (b) of Section 17053.73.
(D) The structure is a part of a military base reuse authority
established pursuant to Title 7.86 (commencing with Section 67800) of
the Government Code.
(E) The structure is a transit-oriented development that is a
higher-density, mixed-use development within a walking distance of
one-half mile of a transit station.
(b) For purposes of this section, a certified historic structure
means a structure in this state that appears on either the National
Register of Historic Places or the California Register of Historical
Resources.
(c) A deduction shall not be allowed under this part for any cost
for which a credit is allowed by this section.
(d) If a credit is allowed under this section with respect to any
property, the basis of that property shall be reduced by the amount
of the credit allowed.
(e) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" in the
following year, and the seven succeeding years if necessary, until
the credit is exhausted.
(f) For purposes of this section, the Governor's Office of
Business and Economic Development shall do the following:
(1) (A) On and after January 1, 2015, and before January 1,
2021, 2023, allocate tax credits to
applicants.
(B) (i) The credit shall be allocated to the partners of a
partnership owning the project in accordance with the partnership
agreement, regardless of how the federal historic rehabilitation tax
credit with respect to the project is allocated to the partners, or
whether the allocation of the credit under the terms of the agreement
has substantial economic effect, within the meaning of Section 704
(b) of the Internal Revenue Code.
(ii) To the extent the allocation of the credit to a partner under
this section lacks substantial economic effect, any loss or
deduction otherwise allowable under this part that is attributable to
the sale or other disposition of that partner's partnership interest
made prior to the expiration of the federal credit shall not be
allowed in the taxable year in which the sale or other disposition
occurs, but shall instead be deferred until, and treated as if, it
occurred in the first taxable year immediately following the taxable
year in which the federal credit period expires for the project
described in clause (i).
(2) Establish a procedure for applicants to file with the Governor'
s Office of Business and Economic Development a written application,
on a form jointly prescribed by that office and the Office of
Historic Preservation for the allocation of the tax credit.
(3) Establish criteria consistent with the requirements of this
section, for allocating tax credits. Criteria shall include, but are
not limited to, the following:
(A) The number of jobs created by the rehabilitation project, both
during and after the rehabilitation of the structure.
(B) The expected increase in state and local tax revenues derived
from the rehabilitation project, including those from increased wages
and property taxes.
(C) Any additional incentives or contributions included in the
rehabilitation project from federal, state, or local governments.
(4) Determine and designate, in consultation with the Office of
Historic Preservation, applicants that meet the requirements of this
section to ensure that the rehabilitation project upholds historical
values in terms of architectural and aesthetic standards.
(5) Process and approve, or reject, all applications.
(6) Subject to the annual cap established as provided in
subdivision (g), allocate an aggregate amount of credits under this
section and Section 17053.86, and allocate any carryover of
unallocated credits from prior years.
(7) Certify tax credits allocated to taxpayers.
(8) Provide the Franchise Tax Board an annual list of the
taxpayers that were allocated a credit pursuant to this section and
Section 17053.86, including each taxpayer's taxpayer identification
number, and the amount allocated to each taxpayer.
(g) The aggregate amount of credits that may be allocated in any
calendar year pursuant to this section and Section 17053.86 shall be
an amount equal to the sum of all of the following:
(1) One hundred million dollars ($100,000,000)
Eighty million dollars ($80,000,000) in tax
credits for the 2015 calendar year and each calendar year thereafter,
through and including the 2020 2022
calendar year.
(2) The unused allocation tax credit amount, if any, for the
preceding calendar year.
(h) This section shall remain in effect only until December 1,
2021, 2023, and as of that date is
repealed.
SEC. 5. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
