Bill Text: CA AB2040 | 2015-2016 | Regular Session | Amended
Bill Title: Outdoor Water Efficiency Act of 2016: personal income tax credits: outdoor water efficiency.
Sponsorship: Partisan Bill (Republican 1)
Status: (Failed) 2016-11-30 - From committee without further action. [AB2040 Detail]
Download: California-2015-AB2040-Amended.html
BILL NUMBER: AB 2040 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 16, 2016
AMENDED IN ASSEMBLY APRIL 6, 2016
INTRODUCED BY Assembly Member Melendez
FEBRUARY 17, 2016
An act to add and repeal Section 17053.37 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2040, as amended, Melendez. Outdoor Water Efficiency Act of
2016: personal income tax credits: outdoor water efficiency.
The Personal Income Tax Law allows various credits against the
taxes imposed by that law.
This bill, for taxable years beginning on or after January 1,
2016, and before January 1, 2021, 2019,
would allow a credit equal to 25% of the amount paid or incurred by
a qualified taxpayer for water-efficiency improvements, as defined,
on qualified real property in this state, as specified. The bill
would limit the cumulative amount of the credit to $2,500 for each
qualified real property for all taxable years. The bill would
also require the amount of the credit to be multiplied by
the tax credit adjustment factor, as specified. The bill would
require a qualified taxpayer to obtain and retain a certification of
the water-efficiency improvements from the appropriate regional or
local water agency after completion of the improvements and to
provide a copy of this certification to the Franchise Tax Board upon
request.
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. The Legislature finds and declares all of the
following:
(a) The 2014 water year, ending on September 30, was the third
driest based on the 119-year long
119-year-long statewide precipitation record.
(b) Temperatures in the first nine months of 2014 were a
record-breaking 4.1 degrees above the 20th century average across the
state.
(c) Responding to these unprecedented dry and hot conditions, the
United States Drought Monitor classified more than 80 percent of
California in an "extreme" drought condition, with 58 percent of
California in an "exceptional" drought, the highest condition.
(d) On January 17, 2014, the Governor called upon retail water
providers throughout California to reduce residential per capita
water use by 20 percent as compared to 2013 levels.
(e) Outdoor water use accounts for the highest percentage of
regional water use.
(f) Landscape design, installation, maintenance, and management
can and should be water efficient. The use of water-efficient
landscapes contributes to the state's efforts to increase the
reliability of its water supplies.
(g) Californians can achieve water efficient
water-efficient landscapes by installing a combination of
drought-tolerant live plants; warm season turf varieties, which
require 25 percent less water compared to cool season turf; soaker or
drip-irrigation hoses; a moisture control for a sprinkler or
irrigation system; mulch and soil; a rain barrel or an alternative
rain and moisture collection system; a permeable ground cover surface
that allows water to reach underground basins, aquifers, or water
collection points; plant and grass seeds coated with a water-saving
surfactant; and a water saving water-saving
surfactant.
(h) Municipalities and local water agencies are tasked with
enforcing water conservation ordinances to eliminate water waste and
restrict outdoor water use.
(i) It is the intent of the Legislature to provide an income tax
credit for the purchase of outdoor water use efficiency improvements
during the exceptional drought that California is facing.
SEC. 2. Section 17053.37 is added to the Revenue and Taxation
Code, to read:
17053.37. (a) For each taxable year beginning on or after January
1, 2016, and before January 1, 2021, 2019,
there shall be allowed as a credit against the "net tax," as
defined in Section 17039, an amount equal to 25 percent of the amount
paid or incurred during the taxable year by a qualified taxpayer for
water-efficiency improvements for outdoor landscapes on qualified
real property in this state.
(b) For each qualified real property, the credit allowed under
this section shall not cumulatively exceed two thousand five hundred
dollars ($2,500) for all taxable years.
(c) (1) The amount of the credit under this section shall be
multiplied by the tax credit adjustment factor for the taxable year.
(2) Unless otherwise specified in any budget measure, the tax
credit adjustment factor for a taxable year beginning on or after
January 1, 2016, shall be 0 percent.
(3) The tax credit authorized by this section shall only be
operative for taxable years for which resources are authorized in any
budget measure for the Franchise Tax Board to oversee and audit
returns associated with the credit.
(c)
(d) For the purposes of this section, the following
definitions shall apply:
(1) "Qualified real property" means a principal residence of the
qualified taxpayer, within the meaning of Section 121 of the Internal
Revenue Code, relating to exclusion of gain from sale of principal
residence, in this state.
(2) "Qualified taxpayer" means the owner of any qualified real
property. property whose income does not
exceed 120 percent of the area median income of the county in which
he or she resides.
(3) (A) "Water-efficiency improvements" means expenditures
voluntarily paid or incurred by the qualified taxpayer that are
certified by the appropriate regional or local water agency as
water-efficient improvements compatible with any of the following:
(i) A local water-efficient landscape ordinance of a regional or
local water agency adopted or in effect at the time the improvements
are made.
(ii) The state water-efficient landscape statutes adopted or in
effect at the time the improvements are made.
(iii) A water-efficient landscape program that is developed and
implemented by a regional or local water agency for the specific
purpose of reducing water use.
(B) "Water-efficiency improvements" do not include improvements
performed to bring landscaping into mandatory compliance with a local
water-efficient landscape ordinance or state law.
(d)
(e) A qualified taxpayer shall:
(1) Obtain certification of the water-efficiency improvements from
the appropriate regional or local water agency specified in
paragraph (3) of subdivision (c) (d)
after completion of those improvements.
(2) Retain a copy of the certification specified in paragraph (1)
and, upon request, provide a copy of that certification to the
Franchise Tax Board.
(e)
(f) This credit shall be in lieu of any other credit or
deduction that the qualified taxpayer may otherwise claim pursuant
to this part with respect to the amounts paid or incurred for
water-efficiency improvements for outdoor landscapes on qualified
real property in this state.
(f)
(g) In the case where the credit allowed under this
section exceeds the "net tax," as defined by Section 17039, for a
taxable year, the excess credit may be carried over to reduce the
"net tax" in the following taxable year, and succeeding three taxable
years, if necessary, until the credit has been exhausted.
(g)
(h) Section 41 does not apply to the credit allowed by
this section.
(h)
(i) This section shall remain in effect until December
1, 2021, 2019, and as of that date is
repealed.
SEC. 3. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
