Bill Text: CA AB832 | 2019-2020 | Regular Session | Amended
Bill Title: Income taxes: credits: qualified developer: affordable housing.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2020-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB832 Detail]
Download: California-2019-AB832-Amended.html
|
Amended
IN
Assembly
April 03, 2019 |
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
| Assembly Bill | No. 832 |
| Introduced by Assembly Member Gipson |
February 20, 2019 |
An act to add and repeal Sections 17053.80 and 23680 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 832, as amended, Gipson.
Income taxes: credits: qualified developer: affordable housing.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2020, and before January 1, 2025, to a taxpayer in an amount equal to 50% of the amount contributed by the taxpayer to a qualified developer for the development of a qualified project, as defined, but that does not exceed a specified amount per taxpayer per qualified project. The bill
would also limit the aggregate amount of the credit, as specified. The bill would provide findings and declarations relating to the goals of this credit.
This bill would take effect immediately as a tax levy.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 17053.80 is added to the Revenue and Taxation Code, to read:17053.80.
(a) For each taxable year beginning on or after January 1, 2020, and before January 1, 2025, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, to a taxpayer an amount equal to 50 percent of the amount contributed by the taxpayer to a qualified developer during the taxable year for the development of a qualified project, but that does not exceed two hundred fifty thousand dollars ($250,000) per taxpayer per qualified project.(b) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, prior to paying any funds to a qualified developer for a qualified project, request a tentative
credit reservation from the Franchise Tax Board in the form and manner
prescribed by the Franchise Tax Board. The taxpayer shall identify the qualified developer and qualified project in the request.
(2) The amount of the tentative credit reservation for a taxable year shall be equal to 50 percent of the amount paid or incurred by a taxpayer to a qualified developer during the taxable year for the development of a qualified project, but shall not exceed two hundred fifty thousand dollars ($250,000) for any qualified project.
(3) The Franchise Tax Board shall approve a request for a tentative credit reservation. In approving the request for a tentative credit reservation, the Franchise Tax Board may verify that the developer is a qualified developer and that the project is a qualified project.
(4) The Franchise Tax Board shall determine the aggregate amount of all tentative credit reservations, and shall only approve a request for a tentative credit reservation in an amount that complies with subdivision (a) and does not exceed the aggregate amount specified in subdivision (c) for that taxable year.
(c) The aggregate amount of credits that may be allocated for a fiscal year pursuant to this section and Section 23680 is ten million dollars ($10,000,000), plus both of the following amounts:
(1) The unallocated credit amount, if any, for the preceding fiscal year.
(2) The amount of previously reserved credits not claimed.
(d) In the case where
the credit allowed under this section exceeds the “net tax,” the excess credit may be carried over to reduce the “net tax” in the following taxable year and succeeding five taxable years, if necessary, until the credit has been exhausted.
(e) For purposes of this section:
(1) “Area median income” shall mean area median income as published by the Department of Housing and Community Development pursuant to Section 50093 of the Health and Safety Code.
(2) “Qualified developer” means a nonprofit organization organized pursuant to Section 501(c)(3) of the Internal Revenue Code that has received a welfare exemption pursuant to Section 214.15.
(3) “Qualified
project” means a project that satisfies all of the following:
(A) Has a specific site in this state with a parcel identifier or address.
(B) Units will be sold to persons and families with income at 30 percent to 80 percent of the area median income and subject to a contract that meets all of the following:
(i) The contract restricts the use of the land for at least 30 years to owner-occupied housing available at affordable housing cost in accordance with Section 50052.5 of the Health and Safety Code.
(ii) The contract includes a deed of trust on the property in favor of the nonprofit corporation to ensure compliance with the terms of the program, which has
no value unless the owner fails to comply with the covenants and restrictions of the terms of the home sale.
(iii) The local housing authority or an equivalent agency, or, if none exists, the city attorney or county counsel, has made a finding that the long-term deed restrictions in the contract serve a public purpose.
(iv) The contract is recorded and provided to the assessor.
(C) Is subject to equity sharing provisions as described in paragraph (2) of subdivision (c) of Section 65915 of the Government Code.
(f) This credit shall be in lieu of any other credit or deduction that the taxpayer may otherwise claim pursuant to this part with respect to
the amount contributed by the taxpayer to a qualified developer for the qualified project.
(g) For the purposes of complying with Section 41, the Legislature finds and declares that the goals of this credit are both of the following:
(1) To incentivize investment in affordable housing development projects by creating a credit for taxpayers who contribute to nonprofit developers building homes for low-income families.
(2) To help low-income families become homeowners by stimulating private investment in affordable housing development projects.
(g)
(h) This section shall remain in effect only until December 1, 2025, and as of that date is repealed.
(h)Section 41 does not apply to the credit allowed by this section.
SEC. 2.
Section 23680 is added to the Revenue and Taxation Code, to read:23680.
(a) For each taxable year beginning on or after January 1, 2020, and before January 1, 2025, there shall be allowed as a credit against the “tax,” as defined in Section 23036, to a taxpayer an amount equal to 50 percent of the amount contributed by the taxpayer to a qualified developer during the taxable year for the development of a qualified project, but that does not exceed two hundred fifty thousand dollars ($250,000) per taxpayer per qualified project.(b) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, prior to paying any funds to a qualified developer for a qualified project, request a tentative credit reservation
from the Franchise Tax Board in the form and manner prescribed by the Franchise Tax Board. The taxpayer shall identify the qualified developer and qualified project in the request.
(2) The amount of the tentative credit reservation for a taxable year shall be equal to 50 percent of the amount paid or incurred by a taxpayer to a qualified developer during the taxable year for the development of a qualified project, but shall not exceed two hundred fifty thousand dollars ($250,000) for any qualified project.
(3) The Franchise Tax Board shall approve a request for a tentative credit reservation. In approving the request for a tentative credit reservation, the Franchise Tax Board may verify that the developer is a qualified developer and that the project is a qualified project.
(4) The Franchise Tax Board shall determine the aggregate amount of all tentative credit reservations, and shall only approve a request for a tentative credit reservation in an amount that complies with subdivision (a) and does not exceed the aggregate amount specified in subdivision (c) for that taxable year.
(c) The aggregate amount of credits that may be allocated for a fiscal year pursuant to this section and Section 17053.80 is ten million dollars ($10,000,000), plus both of the following amounts:
(1) The unallocated credit amount, if any, for the preceding fiscal year.
(2) The amount of previously reserved credits not claimed.
(d) In the case where the credit allowed under this section exceeds the “tax,” the excess credit may be carried over to reduce the “tax” in the following taxable year and succeeding five taxable years, if necessary, until the credit has been exhausted.
(e) For purposes of this section:
(1) “Area median income” shall mean area median income as published by the Department of Housing and Community Development pursuant to Section 50093 of the Health and Safety Code.
(2) “Qualified developer” means a nonprofit organization organized pursuant to Section 501(c)(3) of the Internal Revenue Code that has received a welfare exemption pursuant to Section 214.15.
(3) “Qualified project” means a project that satisfies all of the following:
(A) Has a specific site in this state with a parcel identifier or address.
(B) Units will be sold to persons and families with income at 30 percent to 80 percent of the area median income and subject to a contract that meets all of the following:
(i) The contract restricts the use of the land for at least 30 years to owner-occupied housing available at affordable housing cost in accordance with Section 50052.5 of the Health and Safety Code.
(ii) The contract includes a deed of trust on the property in favor of the
nonprofit corporation to ensure compliance with the terms of the program, which has no value unless the owner fails to comply with the covenants and restrictions of the terms of the home sale.
(iii) The local housing authority or an equivalent agency, or, if none exists, the city attorney or county counsel, has made a finding that the long-term deed restrictions in the contract serve a public purpose.
(iv) The contract is recorded and provided to the assessor.
(C) Is subject to equity sharing provisions as described in paragraph (2) of subdivision (c) of Section 65915 of the Government Code.
(f) The credit may be assigned among members of the same combined
reporting group as provided by Section 23663.
(g) This credit shall be in lieu of any other credit or deduction that the taxpayer may otherwise claim pursuant to this part with respect to the amount contributed by the taxpayer to a qualified developer for the qualified project.
(h) For the purposes of complying with Section 41, the Legislature finds and declares that the goals of this credit are both of the following:
(1) To incentivize investment in affordable housing development projects by creating a credit for taxpayers who contribute to nonprofit developers building homes for low-income families.
(2) To help low-income families become homeowners by stimulating private investment in affordable housing development projects.
(h)
(i) This section shall remain in effect only until December 1, 2025, and as of that date is repealed.
(i)Section 41 does not apply to the credit allowed by this section.
