BILL NUMBER: AB 428 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 12, 2015
INTRODUCED BY Assembly Member Nazarian
FEBRUARY 19, 2015
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.
LEGISLATIVE COUNSEL'S DIGEST
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 that the building is an
at-risk property, as defined, seismic retrofit
construction, as defined, has been completed, 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 1. Section 17053.50 is added to the Revenue and Taxation
Code, to read:
17053.50. (a) For taxable years beginning on or after January 1,
2016, and before January 1, 2021, there shall be allowed to a
qualified taxpayer a credit against the "net tax," as defined in
Section 17039, in an amount equal to 30 percent of the qualified
taxpayer's qualified costs.
(b) For purposes of this section:
(1) "At-risk property" means a building that is deemed hazardous
and in danger of collapse in the event of a catastrophic earthquake,
including, but not limited to, soft story buildings, nonductile
concrete residential buildings, and pre-1994 concrete residential
buildings.
(2) "Qualified building" means a building that has been certified
as an at-risk property by the local housing authority
building code enforcement for the area within
which the building is located. A qualified building includes a
mobilehome registered by the Department of Housing and
Community Development.
(3) "Qualified costs" means the costs paid or incurred by the
qualified taxpayer for any completed seismic retrofit
construction on a qualified building, including any engineering or
architectural design work preceding the
construction. necessary to permit o r
complete the seismic retrofit construction. "Qualified costs"
does do not include either of
the following: any of the following costs paid or
incurred by the qualified taxpayer:
(A) The costs paid or incurred by the qualified taxpayer for
ordinary repair or replacement of existing fixtures or items on or in
the qualified building.
(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, 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
taxpayer 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 taxpayers to others.
(B)
(I) Any amount paid by the qualified taxpayer to the
jurisdiction with authority for building code enforcement for issuing
the certification required pursuant to subparagraph (A) of paragraph
(1) of subdivision (c).
(4) "Qualified taxpayer" means a taxpayer that is an owner of a
qualified building located in this state. A taxpayer that owns a
proportional share of a qualified building in this state may claim
the credit allowed by this section based on the taxpayer's share of
the qualified costs.
(5) (A) "Seismic retrofit construction" means changes or additions
to the structure of a qualified building to mitigate seismic damage,
including:
(i) Anchoring the structure to the foundation.
(ii) Bracing cripple walls.
(iii) Bracing hot water heaters.
(iv) Installing automatic gas shutoff valves.
(v) Repairing or reinforcing the foundation to improve the
integrity of the foundation against seismic damage.
(vi) Anchoring fuel storage.
(vii) Installing an earthquake-resistant bracing system for
mobilehomes that is certified by the California Department of Housing
and Community Development.
(B) "Seismic retrofit construction" does not include construction
activities performed to bring a qualified building into compliance
with standard local building codes.
(5) "Seismic retrofit construction" means alteration of a
qualified building or its components to substantially mitigate
seismic damage. Seismic retrofit construction shall be for work
performed voluntarily, and for which qualified costs were paid or
incurred, on or after January 1, 2016. Seismic retrofit construction
shall include, but not be limited to, 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 earthquake resistant bracing system for mobilehomes
that are registered with the California Department of Housing and
Community Development.
(c) To be eligible for the credit under this section, the
following must apply:
(1) The qualified taxpayer shall do both of the following:
(A) Obtain certification from the appropriate jurisdiction with
authority for building code enforcement, upon a review of the
building, that the building is an at-risk property.
completed construction satisfies the definition of
seismic retrofit construction. The certification shall
identify what part of the completed construction, if any, is not
seismic retrofit construction. Upon the request of the
Franchise Tax Board, the qualified taxpayer shall provide a copy of
the certification to the Franchise Tax Board.
(B) Retain for his or her records a copy of the certification
specified in subparagraph (A).
(2) The jurisdiction with authority for building code enforcement
in which a qualified building is located has entered into an
agreement with the state to provide certifications pursuant to this
section and to not seek reimbursement pursuant to Section 6 of
Article XIII B of the California Constitution for any costs incurred
in providing those certifications.
(d) (1) The credit amount allowed in subdivision (a) shall be
claimed by a qualified taxpayer at the rate of one-fifth of the
credit amount for the taxable year in which the credit is allowed,
and one-fifth of the credit amount for each of the subsequent four
taxable years.
(2) In the case where the credit allowed under this section
exceeds the "net tax," as defined in Section 17039, for a taxable
year, the excess credit may be carried over to reduce the "net tax"
in the following taxable year, and succeeding four taxable years, if
necessary, until the credit has been exhausted.
(e) For purposes of computing the credit provided by this section,
the qualified costs shall be reduced by any grant provided by a
public entity for the seismic retrofit construction.
(f) This credit shall be in lieu of any other credit or deduction
that the qualified taxpayer may otherwise claim pursuant to this part
with respect to qualified costs.
(g) Section 41 shall not apply to the credit allowed pursuant to
this section.
(h) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.
SEC. 2. Section 23650 is added to the Revenue and Taxation Code,
to read:
23650. (a) For taxable years beginning on or after January 1,
2016, and before January 1, 2021, there shall be allowed to a
qualified taxpayer a credit against the "tax," as defined in Section
23036, in an amount equal to 30 percent of the qualified taxpayer's
qualified costs.
(b) For purposes of this section:
(1) "At-risk property" means a building that is deemed hazardous
and in danger of collapse in the event of a catastrophic earthquake,
including, but not limited to, soft story buildings, nonductile
concrete residential buildings, and pre-1994 concrete residential
buildings.
(2) "Qualified building" means a building that has been certified
as an at-risk property by the local housing authority
building code enforcement for the area within
which the building is located. A qualified building includes a
mobilehome registered by the Department of Housing and
Community Development.
(3) "Qualified costs" means the costs paid or incurred by the
qualified taxpayer for any completed seismic retrofit
construction on a qualified building, including any engineering or
architectural design work preceding the
construction. necessary to permit or complete the
seismic retrofit construction . "Qualified costs"
does do not include either of
the following: any of the following costs paid or
incurred by the qualified taxpayer:
(A) The costs paid or incurred by the qualified taxpayer for
ordinary repair or replacement of existing fixtures or items on or in
the qualified building.
(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, 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
taxpayer 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 taxpayers to others.
(B)
(I) Any amount paid by the qualified taxpayer to the
jurisdiction with authority for building code enforcement for issuing
the certification required pursuant to subparagraph (A) of paragraph
(1) of subdivision (c).
(4) "Qualified taxpayer" means a taxpayer that is an owner of a
qualified building located in this state. A taxpayer that owns a
proportional share of a qualified building in this state may claim
the credit allowed by this section based on the taxpayer's share of
the qualified costs.
(5) (A) "Seismic retrofit construction" means changes or additions
to the structure of a qualified building to mitigate seismic damage,
including:
(i) Anchoring the structure to the foundation.
(ii) Bracing cripple walls.
(iii) Bracing hot water heaters.
(iv) Installing automatic gas shutoff valves.
(v) Repairing or reinforcing the foundation to improve the
integrity of the foundation against seismic damage.
(vi) Anchoring fuel storage.
(vii) Installing an earthquake-resistant bracing system for
mobilehomes that is certified by the California Department of Housing
and Community Development.
(B) "Seismic retrofit construction" does not include construction
activities performed to bring a qualified building into compliance
with standard local building codes.
(5) "Seismic retrofit construction" means alteration of a
qualified building or its components to substantially mitigate
seismic damage. Seismic retrofit construction shall be for work
performed voluntarily, and for which qualified costs were paid or
incurred, on or after January 1, 2016. Seismic retrofit construction
shall include, but not be limited to, 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 earthquake resistant bracing system for mobilehomes
that are registered with the Department of Housing and Community
Development.
(c) To be eligible for the credit under this section, the
following must apply:
(1) The qualified taxpayer shall do both of the following:
(A) Obtain certification from the appropriate jurisdiction with
authority for building code enforcement, upon a review of the
building, that the building is an at-risk property.
completed construction satisfies the definition of
seismic retrofit construction. The certification shall
identify what part of the completed construction, if any, is not
seismic retrofit construction. Upon the request of the
Franchise Tax Board, the qualified taxpayer shall provide a copy of
the certification to the Franchise Tax Board.
(B) Retain for his or her records a copy of the certification
specified in subparagraph (A).
(2) The jurisdiction with authority for building code enforcement
in which a qualified building is located has entered into an
agreement with the state to provide certifications pursuant to this
section and to not seek reimbursement pursuant to Section 6 of
Article XIII B of the California Constitution for any costs incurred
in providing those certifications.
(d) (1) The credit amount allowed in subdivision (a) shall be
claimed by a qualified taxpayer at the rate of one-fifth of the
credit amount for the taxable year in which the credit is allowed,
and one-fifth of the credit amount for each of the subsequent four
taxable years.
(2) In the case where the credit allowed under this section
exceeds the "tax," as defined in Section 23036, for a taxable year,
the excess credit may be carried over to reduce the "tax" in the
following taxable year, and succeeding four taxable years, if
necessary, until the credit has been exhausted.
(e) For purposes of computing the credit provided by this section,
the qualified costs shall be reduced by any grant provided by a
public entity for the seismic retrofit construction.
(f) This credit shall be in lieu of any other credit or deduction
that the qualified taxpayer may otherwise claim pursuant to this part
with respect to qualified costs.
(g) Section 41 shall not apply to the credit allowed pursuant to
this section.
(h) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.
SEC. 3. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.