Bill Text: CA AB2392 | 2015-2016 | Regular Session | Amended
Bill Title: California Seismic Safety Capital Access Loan Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-11-30 - From Senate committee without further action. [AB2392 Detail]
Download: California-2015-AB2392-Amended.html
BILL NUMBER: AB 2392 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 9, 2016
AMENDED IN ASSEMBLY MAY 16, 2016
INTRODUCED BY Assembly Member Nazarian
FEBRUARY 18, 2016
An act to add and repeal Sections 17053.50 and 23650 of
the Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy. An act to amend Section
44559.11 of, and to add Section 44559.14 to, the Health and Safety
Code, relating to seismic safety, and making an appropriation
therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2392, as amended, Nazarian. Income taxes: credit:
seismic retrofits. California Seismic Safety Capital
Access Loan Program.
Existing law establishes the Capital Access Loan Program to assist
small businesses in financing the costs of complying with
environmental mandates and the remediation of contamination on their
properties, and also establishes within the program the California
Americans with Disabilities Act Small Business Capital Access Loan
Program to assist small businesses in financing the costs of projects
that alter or retrofit existing small business facilities to comply
with the federal Americans with Disabilities Act. Under existing law,
both programs are administered by the California Pollution Control
Financing Authority (authority).
This bill would establish within the Capital Access Loan Program
the California Seismic Safety Capital Access Loan Program to assist
residential property owners and small business owners in seismically
retrofitting residences and small businesses by covering losses on
qualified loans for those purposes, as specified. The bill would
require the authority to administer the program, including
regulations and funds received for the program, as specified. The
bill would also authorize the authority to, by regulation, implement
loan loss reserve programs to benefit any individual person engaged
in qualifying activities that require financing, as specified.
This bill would establish the California Seismic Safety Capital
Access Loan Program Fund and would continuously appropriate that fund
to the authority to carry out the purposes of the California Seismic
Safety Capital Access Loan Program.
The Personal Income Tax Law and the Corporation Tax Law allow
various credits against the taxes imposed by those laws.
This bill, for taxable years beginning on or after January 1,
2017, and before January 1, 2022, would allow a tax credit under both
laws in an amount equal to 30% of the qualified costs paid or
incurred by a qualified taxpayer for any seismic retrofit
construction on a qualified building, as provided. The bill would
require a taxpayer, in order to be eligible for the credit, to obtain
2 certifications from the appropriate jurisdiction with authority
for building code enforcement of the area in which the building is
located: one prior to seismic retrofit construction that certifies
that the building is an at-risk property, and a second subsequent to
construction that certifies that the completed construction is
seismic retrofit construction, as defined, and specifies a dollar
amount of qualified costs. The bill would further require the
taxpayer to provide the second certification to, and apply for the
allocation of the credit with, the Franchise Tax Board. The bill
would require the Franchise Tax Board to allocate credits on a
first-come-first-served basis. The bill would provide that the credit
would have an aggregate cap under both laws of $12,000,000 plus the
amount of previously unallocated credit for each calendar year, as
provided.
Existing law requires a bill that would authorize a new credit
against the tax imposed by the Personal Income Tax Law or the
Corporation Tax Law to contain specific goals, purposes, and
objectives that the new credit will achieve and detailed performance
indicators and data collection requirements for determining whether
the new credit achieves these goals, purposes, and objectives.
This bill would make findings specifying the goals, purposes, and
objectives of the above-described tax credits and detailing the
performance indicators and data collection requirements for
determining whether the credits meet these goals, purposes, and
objectives.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no yes
. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 44559.11 of the
Health and Safety Code is amended to read:
44559.11. (a) It is the intent of the Legislature to ensure that
the state, through the authority, may make maximum, efficient use of
capital access programs enacted by all federal and state agencies, as
well as funding available from any governmental program whose goals
may be advanced by providing funding to the Capital Access Loan
Program.
(b) In furtherance of this intent, and notwithstanding any other
provision of this article, when the contributions required pursuant
to Section 44559.4 are entirely funded by a source
public or quasi-public entity other than the
authority, authority's fee revenue under Sections
44525 and 44548, the authority may, by regulation adopted
pursuant to subdivision (b) of Section 44520,
44520 or subdivision (e) of Section 44559.14, establish
alternate provisions as necessary to enable the authority to
participate in the alternative funding source program.
program, including implementing loan loss reserve
programs to benefit any individual person engaged in qualifying
activities in furtherance of the public or quasi-public entity's
policy objectives in the state that require financing.
SEC. 2. Section 44559.14 is added to the
Health and Safety Code , to read:
44559.14. (a) (1) It is the intent of the Legislature in enacting
the act adding this section to create and fund a program to assist
residential property owners and small business owners in seismically
retrofitting residences and small businesses. It is not the intent of
the Legislature to assist the physical expansion of small businesses
and residences.
(2) The Legislature hereby establishes the California Seismic
Safety Capital Access Loan Program. The program shall cover losses on
qualified loans by participating lenders to qualified residential
property owners or qualified small businesses for eligible projects,
as specified under this section. The program shall be administered by
the California Pollution Control Financing Authority and follow the
terms and conditions for the Capital Access Loan Program in this
article with the additional program requirements specified under this
section.
(b) For purposes of this section, unless the context requires
otherwise, the following words and terms shall have the following
meanings:
(1) "Seismic retrofit construction" means alteration performed on
or after January 1, 2017, of a qualified building or its components
to substantially mitigate seismic damage. "Seismic retrofit
construction" includes, but is not limited to, all of the following:
(A) Anchoring the structure to the foundation.
(B) Bracing cripple walls.
(C) Bracing hot water heaters.
(D) Installing automatic gas shutoff valves.
(E) Repairing or reinforcing the foundation to improve the
integrity of the foundation against seismic damage.
(F) Anchoring fuel storage.
(G) Installing an earthquake-resistant bracing system for
mobilehomes that are registered with the Department of Housing and
Community Development.
(2) "Eligible costs" means the costs paid or incurred on or after
January 1, 2017, for an eligible project, including any engineering
or architectural design work necessary to permit or complete the
eligible project less the amount of any grant provided by a public
entity for the eligible project. "Eligible costs" do not include
costs paid or incurred for any of the following:
(A) Maintenance, including abatement of deferred or inadequate
maintenance, and correction of violations unrelated to the seismic
retrofit construction.
(B) Repair, including repair of earthquake damage.
(C) Seismic retrofit construction required by local building codes
as a result of addition, repair, building relocation, or change of
use or occupancy.
(D) Other work or improvement required by local building or
planning codes as a result of the intended seismic retrofit
construction.
(E) Rent reductions or other associated compensation, compliance
actions, or other related coordination involving the qualified
residential property owner or qualified small business and any other
party, including a tenant, insurer, or lender.
(F) Replacement of existing building components, including
equipment, except as needed to complete the seismic retrofit
construction.
(G) Bracing or securing nonpermanent building contents.
(H) The offset of costs, reimbursements, or other costs
transferred from the qualified residential property owner or
qualified small business to others.
(3) "Eligible project" means seismic retrofit construction that is
necessary to ensure that the qualified building is capable of
substantially mitigating seismic damage, and the financing necessary
to pay eligible costs of the project.
(4) "Qualified building" means a building that is certified by the
appropriate local building code enforcement authority for the
jurisdiction in which the building is located as hazardous and in
danger of collapse in the event of a catastrophic earthquake.
(5) "Qualified loan" means a loan or portion of a loan as defined
in subdivision (j) of Section 44559.1, where the proceeds of the loan
or portion of the loan are limited to the eligible costs for an
eligible project under this program, and where the loan or portion of
the loan does not exceed two hundred fifty thousand dollars
($250,000).
(6) "Qualified small business" means a business referred to in
subdivisions (i) and (m) of Section 44559.1 that owns and occupies,
or intends to occupy, a qualified building for the operation of the
business.
(7) "Qualified residential property owner" means either an owner
and occupant of a residential building that is a qualified building
or a qualified small business that owns one or more residential
buildings, including a multiunit housing building, that is a
qualified building.
(c) (1) The California Seismic Safety Capital Access Loan Program
Fund is established in the State Treasury and shall be administered
by the authority pursuant to Sections 44548 and 44549 for this
program. For purposes of this section, the references in Sections
44548 and 44549 to "small business" shall include "qualified
residential property owner," as defined in this section.
Notwithstanding Section 13340 of the Government Code, all moneys in
the fund are continuously appropriated to the authority for carrying
out this section. The authority may divide the fund into separate
accounts. All moneys accruing to the authority pursuant to this
section from any source shall be deposited into the fund.
(2) All moneys in the fund derived from any source shall be held
in trust for the life of this program, for program expenditures and
costs of administering this section, as follows:
(A) Program expenditures shall include both of the following:
(i) Contributions paid by the authority in support of qualified
loans.
(ii) Costs for a qualified expert to validate that the proceeds of
the loans are eligible costs, as defined under this section.
(iii) Reasonable costs to educate the small business community,
residential property owners, and participating lenders about the
program, including travel within the state.
(B) Administrative expenditures shall be limited to 5 percent of
the initial appropriation plus 5 percent of all moneys recaptured,
and shall include all of the following:
(i) Personnel costs.
(ii) Service and vending contracts, other than program
expenditures described in subparagraph (A), that are necessary to
carry out the program.
(iii) Other reasonable direct and indirect administrative costs.
(3) The authority may direct the Treasurer to invest moneys in the
fund that are not required for its current needs in the eligible
securities specified in Section 16430 of the Government Code as the
authority shall designate. The authority may direct the Treasurer to
deposit moneys in interest-bearing accounts in state or national
banks or other financial institutions having principal offices
located in the state. The authority may alternatively require the
transfer of moneys in the fund to the Surplus Money Investment Fund
for investment pursuant to Article 4 (commencing with Section 16470)
of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government
Code. All interest or other increment resulting from an investment or
deposit shall be deposited into the fund, notwithstanding Section
16305.7 of the Government Code. Moneys in the fund shall not be
subject to transfer to any other fund pursuant to any provision of
Part 2 (commencing with Section 16300) of Division 4 of Title 2 of
the Government Code, excepting the Surplus Money Investment Fund.
(d) The authority shall adopt regulations pursuant to Section
44520 to implement the program, including provisions to:
(1) Establish a new loss reserve account for each participating
lender enrolling loans in this program.
(2) Obtain a certification from each participating lender and
qualified small business or qualified residential property owner upon
enrollment of a qualified loan that the proceeds of the loan will be
used for the eligible costs of an eligible project.
(3) Contribute an additional incentive from the fund for each loan
enrolled for a qualified small business or qualified residential
property owner located in a severely affected community.
(4) Restrict the enrollment of a qualified loan in any other
Capital Access Loan Program for a qualified small business or
qualified residential property owner offered by the authority as long
as funds are available for this program.
(5) Limit the term of loss coverage for each qualified loan to no
more than 10 years.
(6) Recapture from the loss reserve account the authority's
contribution for each enrolled loan upon the maturation of that loan
or after 10 years from the date of enrollment, whichever happens
first, to be deposited in the fund and applied to future program and
administrative expenditures.
(e) The authority may adopt regulations relating to residential
property owner or small business financing as emergency regulations
in accordance with Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. For purposes
of that Chapter 3.5, including Section 11349.6 of the Government
Code, the adoption of the regulations shall be considered by the
Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare. The regulations shall be repealed 180 days after their
effective date, unless the adopting authority or agency complies with
that Chapter 3.5. All matter omitted in this version of the
bill appears in the bill as amended in the Assembly, May 16, 2016.
(JR11)
