AB 428, as amended, 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 thatbegin delete the building is an at-risk property, as defined,end deletebegin insert seismic retrofit
construction, as defined, has been completed,end insert 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 localbegin delete housing authorityend deletebegin insert building code
16enforcementend insert for the area within which the building is located.begin insert A
17qualified building includes a mobilehome registered by theend insert
18begin insert Department of Housing and Community Development.end insert
19(3) “Qualified costs” means the costs paid or incurred by the
20qualified taxpayer for any begin insertcompletedend insert
seismic retrofit construction
21on a qualified building, including any engineering or architectural
22begin insertdesignend insert workbegin delete preceding the construction.end deletebegin insert necessary to permit or
23complete the seismic retrofit construction.end insert “Qualified costs”begin delete doesend delete
24begin insert doend insert not includebegin delete either of the following:end deletebegin insert any of the following costs
25paid or incurred by the qualified
taxpayer:end insert
26 (A) The costs paid or incurred by the qualified taxpayer for
27ordinary repair or replacement of existing fixtures or items on or
28in the qualified building.
29(A) Maintenance, including abatement of deferred or inadequate
30maintenance, and correction of violations unrelated to the seismic
31retrofit construction.
32(B) Repair, including repair of earthquake damage.
end insertbegin insert
33(C) Seismic retrofit construction required by local building
34codes as a result of addition,
repair, building relocation, change
35of use, or occupancy.
36(D) Other work or improvement required by local building or
37planning codes as a result of the intended seismic retrofit
38construction.
P3 1(E) Rent reductions or other associated compensation,
2compliance actions, or other related coordination involving the
3qualified taxpayer and any other party, including a tenant, insurer,
4or lender.
5(F) Replacement of existing building components, including
6equipment, except as needed to complete the seismic retrofit
7construction.
8(G) Bracing or securing nonpermanent building contents.
end insertbegin insert
9(H) The
offset of costs, reimbursements, or other costs
10transferred from the qualified taxpayers to others.
11(B)
end delete
12begin insert(I)end insert Any amount paid by the qualified taxpayer to the jurisdiction
13with authority for building code enforcement for issuing the
14certification required pursuant to subparagraph (A) of paragraph
15(1) of subdivision (c).
16(4) “Qualified taxpayer” means a taxpayer that is an owner of
17a qualified building located in this state. A taxpayer that owns a
18proportional share of a qualified building in this state may claim
19the
credit allowed by this section based on the taxpayer’s share of
20the qualified costs.
21(5) (A) “Seismic retrofit construction” means changes or
22additions to the structure of a qualified building to mitigate seismic
23damage, including:
24(i) Anchoring the structure to the foundation.
end delete25(ii) Bracing cripple walls.
end delete26(iii) Bracing hot water heaters.
end delete27(iv) Installing automatic gas shutoff valves.
end delete
28(v) Repairing or reinforcing the foundation to improve the
29integrity of the foundation against seismic damage.
30(vi) Anchoring fuel storage.
end delete
31(vii) Installing an earthquake-resistant bracing system for
32mobilehomes that is certified by the California Department of
33Housing and Community Development.
34(B) “Seismic retrofit construction” does not include construction
35activities performed to bring a qualified building into compliance
36with standard local building codes.
37(5) “Seismic retrofit construction” means alteration of a
38qualified building or its components to substantially mitigate
39seismic damage. Seismic retrofit construction shall be for work
40performed voluntarily, and for which qualified costs were paid or
P4 1incurred, on or after January 1, 2016. Seismic retrofit construction
2shall include, but not be limited to, the following:
3(A) Anchoring the structure to the foundation.
end insertbegin insert4(B) Bracing cripple walls.
end insertbegin insert5(C) Bracing hot water heaters.
end insertbegin insert6(D) Installing automatic gas shutoff valves.
end insertbegin insert
7(E) Repairing or reinforcing the foundation to improve the
8integrity of the foundation against seismic damage.
9(F) Anchoring fuel storage.
end insertbegin insert
10(G) Installing earthquake resistant bracing system for
11mobilehomes that are registered with the California Department
12of Housing and Community Development.
13(c) To be eligible for the credit under this section, the following
14must apply:
15(1) The qualified taxpayer shall do both of the following:
16(A) Obtain certification from the appropriate jurisdiction with
17authority for building code enforcement, upon a review of the
18building, that thebegin delete building is an at-risk property.end deletebegin insert
completed
19construction satisfies the definition of seismic retrofit construction.
20The certification shall end insertbegin insertidentify what part of the completed
21construction, if any, is not seismic retrofit construction.end insert Upon the
22request of the Franchise Tax Board, the qualified taxpayer shall
23provide a copy of the certification to the Franchise Tax Board.
24(B) Retain for his or her records a copy of the certification
25specified in subparagraph (A).
26(2) The jurisdiction with authority for building code enforcement
27in which a qualified building is located has entered into an
28agreement with the state to provide certifications pursuant to this
29section and to not seek reimbursement pursuant to
Section 6 of
30Article XIII B of the California Constitution for any costs incurred
31in providing those certifications.
32(d) (1) The credit amount allowed in subdivision (a) shall be
33claimed by a qualified taxpayer at the rate of one-fifth of the credit
34amount for the taxable year in which the credit is allowed, and
35one-fifth of the credit amount for each of the subsequent four
36taxable years.
37(2) In the case where the credit allowed under this section
38exceeds the “net tax,” as defined in Section 17039, for a taxable
39year, the excess credit may be carried over to reduce the “net tax”
P5 1in the following taxable year, and succeeding four taxable years,
2if necessary, 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.
Section 23650 is added to the Revenue and Taxation
14Code, to read:
(a) For taxable years beginning on or after January 1,
162016, and before January 1, 2021, there shall be allowed to a
17qualified taxpayer a credit against the “tax,” as defined in Section
1823036, in an amount equal to 30 percent of the qualified taxpayer’s
19qualified costs.
20(b) For purposes of this section:
21(1) “At-risk property” means a building that is deemed
22hazardous and in danger of collapse in the event of a catastrophic
23earthquake, including, but not limited to, soft story buildings,
24nonductile concrete residential buildings, and pre-1994 concrete
25residential buildings.
26(2) “Qualified building” means a building that has been certified
27as an at-risk property by the localbegin delete housing authorityend deletebegin insert building code
28enforcementend insert for the area within which the building is located.begin insert A
29qualified building includes a mobilehome registered by theend insert
30begin insert Department of Housing and Community Development. end insert
31(3) “Qualified costs” means the costs paid or incurred by the
32qualified taxpayer for anybegin insert
completedend insert seismic retrofit construction
33on a qualified building, including any engineering or architectural
34begin insertdesignend insert workbegin delete preceding the construction.end deletebegin insert necessary to permit or
35complete the seismic retrofit constructionend insertbegin insert.end insert “Qualified costs”begin delete doesend delete
36begin insert doend insert not includebegin delete either of the following:end deletebegin insert
any of the following costs
37paid or incurred by the qualified taxpayer:end insert
38 (A) The costs paid or incurred by the qualified taxpayer for
39ordinary repair or replacement of existing fixtures or items on or
40in the qualified building.
P6 1(A) Maintenance, including abatement of deferred or inadequate
2maintenance, and correction of violations unrelated to the seismic
3retrofit construction.
4(B) Repair, including repair of earthquake damage.
end insertbegin insert
5(C) Seismic
retrofit construction required by local building
6codes as a result of addition, repair, building relocation, change
7of use, or occupancy.
8(D) Other work or improvement required by local building or
9planning codes as a result of the intended seismic retrofit
10construction.
11(E) Rent reductions or other associated compensation,
12compliance actions, or other related coordination involving the
13qualified taxpayer and any other party, including a tenant, insurer,
14or lender.
15(F) Replacement of existing building components, including
16equipment, except as needed to complete the seismic retrofit
17construction.
18(G) Bracing or securing nonpermanent building contents.
end insertbegin insert
19(H) The offset of costs, reimbursements, or other costs
20transferred from the qualified taxpayers to others.
21(B)
end delete
22begin insert(I)end insert Any amount paid by the qualified taxpayer to the jurisdiction
23with authority for building code enforcement for issuing the
24certification required pursuant to subparagraph (A) of paragraph
25(1) of subdivision (c).
26(4) “Qualified taxpayer” means a taxpayer that is an owner of
27a qualified building located in this state. A taxpayer that owns a
28proportional
share of a qualified building in this state may claim
29the credit allowed by this section based on the taxpayer’s share of
30the qualified costs.
31(5) (A) “Seismic retrofit construction” means changes or
32additions to the structure of a qualified building to mitigate seismic
33damage, including:
34(i) Anchoring the structure to the foundation.
35(ii) Bracing cripple walls.
36(iii) Bracing hot water heaters.
37(iv) Installing automatic gas shutoff valves.
38(v) Repairing or reinforcing the foundation to improve the
39integrity of the foundation against seismic damage.
40(vi) Anchoring fuel storage.
P7 1(vii) Installing an earthquake-resistant bracing system for
2mobilehomes that is certified by the California Department of
3Housing and Community Development.
4(B) “Seismic retrofit construction” does not include construction
5activities performed to bring a qualified building into compliance
6with
standard local building codes.
7(5) “Seismic retrofit construction” means alteration of a
8qualified building or its components to substantially mitigate
9seismic damage. Seismic retrofit construction shall be for work
10performed voluntarily, and for which qualified costs were paid or
11incurred, on or after January 1, 2016. Seismic retrofit construction
12shall include, but not be limited to, the following:
13(A) Anchoring the structure to the foundation.
end insertbegin insert14(B) Bracing cripple walls.
end insertbegin insert15(C) Bracing hot water heaters.
end insertbegin insert16(D) Installing automatic gas shutoff valves.
end insertbegin insert
17(E) Repairing or reinforcing the foundation to improve the
18integrity of the foundation against seismic damage.
19(F) Anchoring fuel storage.
end insertbegin insert
20(G) Installing earthquake resistant bracing system for
21mobilehomes that are registered with the Department of Housing
22and Community Development.
23(c) To be eligible for the credit under this section, the following
24must apply:
25(1) The qualified taxpayer shall do both of the following:
26(A) Obtain certification from the appropriate jurisdiction with
27authority for building code enforcement, upon a review of the
28building, that
thebegin delete building is an at-risk property.end deletebegin insert
completed
29construction satisfies the definition of seismic retrofit construction.end insert
30begin insert The certification shall identify what part of the completed
31construction, if any, is not seismic retrofit construction.end insert Upon the
32request of the Franchise Tax Board, the qualified taxpayer shall
33provide a copy of the certification to the Franchise Tax Board.
34(B) Retain for his or her records a copy of the certification
35specified in subparagraph (A).
36(2) The jurisdiction with authority for building code enforcement
37in which a qualified building is located has entered into an
38agreement with the state to provide certifications pursuant to this
39section and to not seek reimbursement pursuant to
Section 6 of
P8 1Article XIII B of the California Constitution for any costs incurred
2in providing those certifications.
3(d) (1) The credit amount allowed in subdivision (a) shall be
4claimed by a qualified taxpayer at the rate of one-fifth of the credit
5amount for the taxable year in which the credit is allowed, and
6one-fifth of the credit amount for each of the subsequent four
7taxable years.
8(2) In the case where the credit allowed under this section
9exceeds the “tax,” as defined in Section 23036, for a taxable year,
10the excess credit may be carried over to reduce the “tax” in the
11following taxable year, and succeeding four taxable years, if
12necessary, until the credit has been exhausted.
13(e) For purposes of computing the credit provided by this
14section, the qualified costs shall be reduced by any grant provided
15by a public entity for the seismic retrofit construction.
16(f) This credit shall be in lieu of any other credit or deduction
17that the qualified taxpayer may otherwise claim pursuant to this
18part with respect to qualified costs.
19(g) Section 41 shall not apply to the credit allowed pursuant to
20this section.
21(h) This section shall remain in effect only until December 1,
222021, and as of that date is repealed.
This act provides for a tax levy within the meaning of
24Article IV of the Constitution and shall go into immediate effect.
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