Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1999

Introduced by Assembly Member Atkins

February 20, 2014

begin delete An act relating to taxation. end delete begin insert An act to add and repeal Sections 17053.86 and 23686 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1999, as amended, Atkins. begin delete Income taxes: California Economic Development and Historic Preservation Tax Credit Act. end delete begin insert Personal income and corporation tax credits: rehabilitation. end insert

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.

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This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2015, and before January 1, 2026, 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% credit, or 30% credit if the structure meets specified criteria, for rehabilitation of a certified historic structure within the state.

end insert begin insert

This bill would take effect immediately as a tax levy.

end insert begin delete

This bill would state that it is the intent of the Legislature to enact the California Economic Development and Historic Preservation Tax Credit Act, the purpose of which is to create jobs and revitalize communities by providing an incentive for the renovation and restoration of historic properties.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 17053.86 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

begin insert

begin insert 17053.86. end insert   

For each taxable year beginning on or after January
1, 2015, and before January 1, 2026, 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 percent of the qualified
rehabilitation expenditures with respect to a certified historic
structure.

(2) The applicable percentage shall be 30 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 structure is located on federal, state, or local surplus
property.

(B) The rehabilitated structure will contain a majority of
low-income housing units.

(C) The structure is located in an economically distressed area.

(D) The structure is located in a Base Realignment and Closure
Zone.

(E) The structure is located in a Transit-Oriented Development
Area.

(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) This section shall remain in effect only until December 1,
2026, and as of that date is repealed.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 23686 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 23686. end insert   

For each taxable year beginning on or after January
1, 2015, and before January 1, 2026, 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 percent of the qualified
rehabilitation expenditures with respect to a certified historic
structure.

(2) The applicable percentage shall be 30 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 structure is located on federal, state, or local surplus
property.

(B) The rehabilitated structure will contain a majority of
low-income housing units.

(C) The structure is located in an economically distressed area.

(D) The structure is located in a Base Realignment and Closure
Zone.

(E) The structure is located in a Transit-Oriented Development
Area.

(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) This section shall remain in effect only until December 1,
2026, and as of that date is repealed.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

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SECTION 1.  

It is the intent of the Legislature to enact the
California Economic Development and Historic Preservation Tax
Credit Act, the purpose of which is to create jobs and revitalize
communities by providing an incentive for the renovation and
restoration of historic properties.

end delete