AB 428, as introduced, Nazarian. Income taxes credit: seismic retrofits.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would allow, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, 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 defined. This bill would require a taxpayer to obtain a certification from the appropriate jurisdiction with authority for building code enforcement of the area in which the building is located that the building is an at-risk property, as defined, and to provide that certification to the Franchise Tax Board upon the request of the Franchise Tax Board.
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 17053.50 is added to the Revenue and
2Taxation Code, to read:
(a) For taxable years beginning on or after January
41, 2016, and before January 1, 2021, there shall be allowed to a
5qualified taxpayer a credit against the “net tax,” as defined in
6Section 17039, in an amount equal to 30 percent of the qualified
7taxpayer’s qualified costs.
8(b) For purposes of this section:
9(1) “At-risk property” means a building that is deemed
10hazardous and in danger of collapse in the event of a catastrophic
11earthquake, including, but not limited to, soft story buildings,
12nonductile concrete residential buildings, and pre-1994 concrete
13residential buildings.
14(2) “Qualified building” means a
building that has been certified
15as an at-risk property by the local housing authority for the area
16within which the building is located.
17(3) “Qualified costs” means the costs paid or incurred by the
18qualified taxpayer for any seismic retrofit construction on a
19qualified building, including any engineering or architectural work
20preceding the construction. “Qualified costs” does not include
21either of the following:
22 (A) The costs paid or incurred by the qualified taxpayer for
23ordinary repair or replacement of existing fixtures or items on or
24in the qualified building.
25(B) Any amount paid by the qualified taxpayer to the jurisdiction
26with authority for building code enforcement for issuing the
27certification required pursuant to subparagraph (A) of paragraph
28(1) of subdivision (c).
29(4) “Qualified taxpayer” means a taxpayer that is an owner of
30a qualified building located in this state. A taxpayer that owns a
31proportional share of a qualified building in this state may claim
32the credit allowed by this section based on the taxpayer’s share of
33the qualified costs.
34(5) (A) “Seismic retrofit construction” means changes or
35additions to the structure of a qualified building to mitigate seismic
36damage, including:
37(i) Anchoring the structure to the foundation.
38(ii) Bracing cripple walls.
P3 1(iii) Bracing hot water heaters.
2(iv) Installing automatic gas shutoff valves.
3(v) Repairing or reinforcing the foundation to improve the
4integrity of the foundation against seismic damage.
5(vi) Anchoring fuel storage.
6(vii) Installing an earthquake-resistant bracing system for
7mobilehomes that is certified by the California Department of
8Housing and Community Development.
9(B) “Seismic retrofit construction” does not include construction
10activities performed to bring a qualified building into compliance
11with standard local building codes.
12(c) To be eligible for the credit under this section, the following
13must apply:
14(1) The qualified taxpayer shall do both of the following:
15(A) Obtain certification from the appropriate jurisdiction with
16authority for building code enforcement, upon a review of the
17building, that the building is an at-risk property. Upon the request
18of the Franchise Tax Board, the qualified taxpayer shall provide
19a copy of the certification to the Franchise Tax Board.
20(B) Retain for his or her records a copy of the certification
21specified in subparagraph (A).
22(2) The jurisdiction with authority for building code enforcement
23in which a qualified building is located has entered into an
24agreement with the state to provide certifications pursuant to this
25section and to not seek reimbursement pursuant to Section 6 of
26Article XIII B of the California Constitution for any costs incurred
27in providing those certifications.
28(d) (1) The credit amount allowed in subdivision (a) shall be
29claimed by a qualified taxpayer at the rate of one-fifth of the credit
30amount for the taxable year in which the credit is allowed, and
31one-fifth of the credit amount for each of the subsequent four
32taxable years.
33(2) In the case where the credit allowed under this section
34exceeds the “net tax,” as defined in Section 17039, for a taxable
35year, the excess credit may be carried over to reduce the “net tax”
36in the following taxable year, and succeeding four taxable years,
37if necessary, until the credit has been exhausted.
38(e) For purposes of computing the credit provided by this
39section, the qualified costs shall be reduced by any grant provided
40by a public entity for the seismic retrofit construction.
P4 1(f) This credit shall be in lieu of any other credit or deduction
2that the qualified taxpayer may otherwise claim pursuant to this
3part with respect to qualified costs.
4(g) Section 41 shall not apply to the credit allowed pursuant to
5this section.
6(h) This section shall remain in effect only until December 1,
72021, and as of that date is repealed.
Section 23650 is added to the Revenue and Taxation
9Code, to read:
(a) For taxable years beginning on or after January 1,
112016, and before January 1, 2021, there shall be allowed to a
12qualified taxpayer a credit against the “tax,” as defined in Section
1323036, in an amount equal to 30 percent of the qualified taxpayer’s
14qualified costs.
15(b) For purposes of this section:
16(1) “At-risk property” means a building that is deemed
17hazardous and in danger of collapse in the event of a catastrophic
18earthquake, including, but not limited to, soft story buildings,
19nonductile concrete residential buildings, and pre-1994 concrete
20residential buildings.
21(2) “Qualified building” means a building that
has been certified
22as an at-risk property by the local housing authority for the area
23within which the building is located.
24(3) “Qualified costs” means the costs paid or incurred by the
25qualified taxpayer for any seismic retrofit construction on a
26qualified building, including any engineering or architectural work
27preceding the construction. “Qualified costs” does not include
28either of the following:
29 (A) The costs paid or incurred by the qualified taxpayer for
30ordinary repair or replacement of existing fixtures or items on or
31in the qualified building.
32(B) Any amount paid by the qualified taxpayer to the jurisdiction
33with authority for building code enforcement for issuing the
34certification required pursuant to subparagraph (A) of paragraph
35(1) of subdivision (c).
36(4) “Qualified taxpayer” means a taxpayer that is an owner of
37a qualified building located in this state. A taxpayer that owns a
38proportional share of a qualified building in this state may claim
39the credit allowed by this section based on the taxpayer’s share of
40the qualified costs.
P5 1(5) (A) “Seismic retrofit construction” means changes or
2additions to the structure of a qualified building to mitigate seismic
3damage, including:
4(i) Anchoring the structure to the foundation.
5(ii) Bracing cripple walls.
6(iii) Bracing hot water heaters.
7(iv) Installing automatic gas shutoff valves.
8(v) Repairing or reinforcing the foundation to improve the
9integrity of the foundation against seismic damage.
10(vi) Anchoring fuel storage.
11(vii) Installing an earthquake-resistant bracing system for
12mobilehomes that is certified by the California Department of
13Housing and Community Development.
14(B) “Seismic retrofit construction” does not include construction
15activities performed to bring a qualified building into compliance
16with standard local building codes.
17(c) To be eligible for the credit under this section, the following
18must apply:
19(1) The qualified taxpayer shall do both of the following:
20(A) Obtain certification from the appropriate jurisdiction with
21authority for building code enforcement, upon a review of the
22building, that the building is an at-risk property. Upon the request
23of the Franchise Tax Board, the qualified taxpayer shall provide
24a copy of the certification to the Franchise Tax Board.
25(B) Retain for his or her records a copy of the certification
26specified in subparagraph (A).
27(2) The jurisdiction with authority for building code enforcement
28in which a qualified building is located has entered into an
29agreement with the state to provide certifications pursuant to this
30section and to not seek reimbursement pursuant to Section 6 of
31Article XIII B of the California Constitution for any costs incurred
32in providing those certifications.
33(d) (1) The credit amount allowed in subdivision (a) shall be
34claimed by a qualified taxpayer at the rate of one-fifth of the credit
35amount for the taxable year in which the credit is allowed, and
36one-fifth of the credit amount for each of the subsequent four
37taxable years.
38(2) In the case where the credit allowed under this section
39exceeds the “tax,” as defined in Section 23036, for a taxable year,
40the excess credit may be carried over to reduce the “tax” in the
P6 1following taxable year, and succeeding four taxable years, if
2necessary, until the credit has been exhausted.
3(e) For purposes of computing the credit provided by this
4section, the qualified costs shall be reduced by any grant provided
5by a public entity for the seismic retrofit construction.
6(f) This credit shall be in lieu of any other credit or
deduction
7that the qualified taxpayer may otherwise claim pursuant to this
8part with respect to qualified costs.
9(g) Section 41 shall not apply to the credit allowed pursuant to
10this section.
11(h) This section shall remain in effect only until December 1,
122021, and as of that date is repealed.
This act provides for a tax levy within the meaning of
14Article IV of the Constitution and shall go into immediate effect.
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