Amended in Assembly August 19, 2016

Amended in Assembly August 15, 2016

Amended in Assembly June 21, 2016

Amended in Senate May 31, 2016

Amended in Senate April 26, 2016

Amended in Senate March 28, 2016

Senate Bill No. 1073

Introduced by Senator Monning

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(Principal coauthor: Assembly Member Mark Stone)

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(Coauthors: Assembly Members Atkins, Baker, Brown, Chang, Dahle, Irwin, Kim, Lackey, Linder, Maienschein, Mathis, Mullin, Steinorth, and Wilk)

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February 16, 2016

begin delete An act to amend Section 105254 of, and to add Section 105250.5 to, the Health and Safety Code, relating to public health, and making an appropriation therefor. end delete begin insert An act to amend Section 17052 of the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1073, as amended, Monning. begin delete Lead-based paint. end delete begin insert Personal income taxes: earned income credit: credit percentage: phaseout percentage. end insert

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The Personal Income Tax Law allows various credits against the taxes imposed by that law, including certain credits that are allowed in modified conformity to credits allowed by federal income tax laws. Federal income tax laws allow a refundable earned income tax credit for certain low-income individuals who have earned income from specified sources and who meet certain other requirements.

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The Personal Income Tax Law, for taxable years beginning on or after January 1, 2015, in modified conformity with federal income tax laws, allows an earned income credit against personal income tax, and a payment from the Tax Relief and Refund Account for an allowable credit in excess of tax liability, to an eligible individual in an amount determined in accordance with federal law as applicable for federal income tax purposes for the taxable year, multiplied by the earned income tax credit adjustment factor, as specified. Existing law creates the Tax Relief and Refund Account, which is continuously appropriated, and provides that required payments to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account, including amounts allowable as an earned income credit in excess of any tax liability. The Personal Income Tax Law provides that the amount of the credit is calculated as a percentage of the eligible individual’s earned income and is phased out above a specified amount as income increases. Under existing law, the credit percentage and the phase out percentage is based on the number of qualifying children of the eligible individual. Existing law provides, in modified conformity with federal income tax law, in the case of an eligible individual with 3 or more qualifying children, for taxable years beginning before January 1, 2016, the credit percentage and phaseout percentage is 45%, and for taxable years beginning after January 1, 2016, the credit percentage and phaseout percentage is the same as for an eligible individual with 2 or more children, which is 40%.

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This bill, for taxable years beginning on and after January 1, 2016, would instead provide that, in the case of an eligible individual with 3 or more qualifying children, the credit percentage and phaseout percentage is 45%, thereby increasing the credit percentage and the phaseout percentage for those eligible individuals for taxable years beginning on and after January 1, 2016.

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By increasing the allowable credit amount, this bill would authorize new payments from the Tax Relief and Refund Account for additional amounts in excess of personal income tax liabilities, thereby making an appropriation.

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Existing law requires the State Department of Public Health to implement and administer a residential lead-based paint hazard reduction program, as specified, including adopting regulations regarding accreditation of providers of health and safety training to employees who engage in or supervise lead-related construction work, as defined, and certification of employees who have successfully completed that training. Existing law requires the department to adopt regulations to establish and impose fees for those accreditations and certifications and for licensing entities engaged in lead-related occupations, as specified. Existing law requires those fees to be deposited into the Lead-Related Construction Fund, as specified.

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This bill would require the department to update its regulations governing lead-related construction work, including training and certification for workers and accreditation for trainers in lead-safe work practices, to comply with existing state regulations and the United States Environmental Protection Agency’s Lead Renovation, Repair, and Painting Rule, as specified. The bill would require the adoption of those regulations to include fee provisions for those certifications and accreditations. The bill would appropriate $500,000 from the General Fund to the department for the purposes of implementation until fees can be collected under these provisions, to be repaid upon determination by the Department of Finance that sufficient moneys are available in the Lead-Related Construction Fund to repay that amount. The bill would require the regulations adopted pursuant to these provisions to be adopted as emergency regulations, as specified.

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Existing law requires certain persons engaged in lead construction work to have a certificate under these provisions. A violation of that provision is a crime.

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This bill would further require firms, as defined, and at least one person onsite and employed by a firm, doing renovation, repair, or painting work that will disturb lead-based paint or presumed lead-based paint, as defined, to have a certificate under these provisions. By expanding the scope of an existing crime, the bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

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

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begin insert SECTION 1. end insert   

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begin insert Section 17052 of the end insert begin insert Revenue and Taxation Code end insert

begin insert is amended to read: end insert

17052.  

(a) (1) For each taxable year beginning on or after
January 1, 2015, there shall be allowed against the “net tax,” as
defined by Section 17039, an earned income tax credit in an amount
equal to an amount determined in accordance with Section 32 of
the Internal Revenue Code, relating to earned income, as applicable
for federal income tax purposes for the taxable year, except as
otherwise provided in this section.

(2) (A) The amount of the credit determined under Section 32
of the Internal Revenue Code, relating to earned income, as
modified by this section, shall be multiplied by the earned income
tax credit adjustment factor for the taxable year.

(B) Unless otherwise specified in the annual Budget Act, the
earned income tax credit adjustment factor for a taxable year
beginning on or after January 1, 2015, shall be 0 percent.

(C) The earned income tax credit authorized by this section
shall only be operative for taxable years for which resources are
authorized in the annual Budget Act for the Franchise Tax Board
to oversee and audit returns associated with the credit.

(b) (1) In lieu of the table prescribed in Section 32(b)(1) of the
Internal Revenue Code, relating to percentages, the credit
percentage and the phaseout percentage shall be determined as
follows:

 

In the case of an eligible individual with:	The credit percentage is:	The phaseout percentage is:
No qualifying children	7.65%	7.65%
1 qualifying child	34%	34%
2 begin delete or more end delete qualifying children	40%	40%
begin insert 3 or more qualifying children end insert	begin insert 45% end insert	begin insert 45% end insert

 

(2) (A) In lieu of the table prescribed in Section 32(b)(2)(A)
of the Internal Revenue Code, the earned income amount and the
phaseout amount shall be determined as follows:

 

In the case of an eligible individual with:	The earned income amount is:	The phaseout amount is:
No qualifying children	$3,290	$3,290
1 qualifying child	$4,940	$4,940
2 or more qualifying children	$6,935	$6,935

 

(B) Section 32(b)(2)(B) of the Internal Revenue Code, relating
to joint returns, shall not apply.

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(3) Section 32(b)(3)(A) of the Internal Revenue Code, relating
to increased percentage for three or more qualifying children, is
modified by substituting “the credit percentage and phaseout
percentage is 45 percent” for “the credit percentage is 45 percent.”

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(c) (1) Section 32(c)(1)(A)(ii)(I) of the Internal Revenue Code
is modified by substituting “this state” for “the United States.”

(2) Section 32(c)(2)(A) of the Internal Revenue Code is modified
as follows:

(A) Section 32(c)(2)(A)(i) of the Internal Revenue Code is
modified by deleting “plus” and inserting in lieu thereof the
following: “and only if such amounts are subject to withholding
pursuant to Division 6 (commencing with Section 13000) of the
Unemployment Insurance Code.”

(B) Section 32(c)(2)(A)(ii) of the Internal Revenue Code shall
not apply.

(3) Section 32(c)(3)(C) of the Internal Revenue Code, relating
to place of abode, is modified by substituting “this state” for “the
United States.”

(d) Section 32(i)(1) of the Internal Revenue Code is modified
by substituting “$3,400” for “$2,200.”

(e) In lieu of Section 32(j) of the Internal Revenue Code, relating
to inflation adjustments, for taxable years beginning on or after
January 1, 2016, the amounts specified in paragraph (2) of
subdivision (b) and in subdivision (d) shall be recomputed annually
in the same manner as the recomputation of income tax brackets
under subdivision (h) of Section 17041.

(f) If the amount allowable as a credit under this section exceeds
the tax liability computed under this part for the taxable year, the
excess shall be credited against other amounts due, if any, and the
balance, if any, shall be paid from the Tax Relief and Refund
Account and refunded to the taxpayer.

(g) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes
of this section. Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code shall not
apply to any rule, guideline, or procedure prescribed by the
Franchise Tax Board pursuant to this section.

(h) Notwithstanding any other law, amounts refunded pursuant
to this section shall be treated in the same manner as the federal
earned income refund for the purpose of determining eligibility to
receive benefits under Division 9 (commencing with Section
10000) of the Welfare and Institutions Code or amounts of those
benefits.

(i) (1) For the purpose of implementing the credit allowed by
this section for the 2015 taxable year, the Franchise Tax Board
shall be exempt from the following:

(A) Special Project Report requirements under State
Administrative Manual Sections 4819.36, 4945, and 4945.2.

(B) Special Project Report requirements under Statewide
Information Management Manual Section 30.

(C) Section 11.00 of the 2015 Budget Act.

(D) Sections 12101, 12101.5, 12102, and 12102.1 of the Public
Contract Code.

(2) The Franchise Tax Board shall formally incorporate the
scope, costs, and schedule changes associated with the
implementation of the credit allowed by this section in its next
anticipated Special Project Report for its Enterprise Data to
Revenue Project.

(j) (1) In accordance with Section 41 of the Revenue and
Taxation Code, the purpose of the California Earned Income Tax
Credit is to reduce poverty among California’s poorest working
families and individuals. To measure whether the credit achieves
its intended purpose, the Franchise Tax Board shall annually
prepare a written report on the following:

(A) The number of tax returns claiming the credit.

(B) The number of individuals represented on tax returns
claiming the credit.

(C) The average credit amount on tax returns claiming the credit.

(D) The distribution of credits by number of dependents and
income ranges. The income ranges shall encompass the phase-in
and phaseout ranges of the credit.

(E) Using data from tax returns claiming the credit, including
an estimate of the federal tax credit determined under Section 32
of the Internal Revenue Code, an estimate of the number of families
who are lifted out of deep poverty by the credit and an estimate of
the number of families who are lifted out of deep poverty by the
combination of the credit and the federal tax credit. For the
purposes of this subdivision, a family is in “deep poverty” if the
income of the family is less than 50 percent of the federal poverty
threshold.

(2) The Franchise Tax Board shall provide the written report to
the Senate Committee on Budget and Fiscal Review, the Assembly
Committee on Budget, the Senate and Assembly Committees on
Appropriations, the Senate Committee on Governance and Finance,
the Assembly begin delete Committees end delete begin insert Committee end insert on Revenue and Taxation,
and the Senate and Assembly Committees on Human Services.

(k) The tax credit allowed by this section shall be known as the
California Earned Income Tax Credit.

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(l) The amendments made to this section by the act adding this
subdivision shall apply to taxable years beginning on or after
January 1, 2016.

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SECTION 1.  

Section 105250.5 is added to the Health and
Safety Code, to read:

105250.5.  

(a) By July 1, 2018, the department shall review
and amend its regulations governing lead-related construction
work, including training and certification for workers and
accreditation for trainers in lead-safe work practices to comply
with Chapter 8 (commencing with Section 35001) of Division 1
of Title 17 of the California Code of Regulations adopted by the
department pursuant to Sections 105250 and 124160 and the United
States Environmental Protection Agency’s Lead Renovation,
Repair, and Painting Rule (40 C.F.R. 745).

(b) The amended regulations adopted pursuant to subdivision
(a) shall include, but not be limited to, a regulation requiring a
copy of the worker and firm certification to be provided before
the start of the job to the prime contractor or other employers on
the site and to be posted on the jobsite beside the Cal-OSHA
Lead-Work Pre-Job Notification required by Section 1532.1(p) of
Title 8 of the California Code of Regulations.

(c) Consistent with Section 105250, the department shall also
adopt regulations establishing fees for the certifications or
accreditations established pursuant to this section. The fees
imposed under this section shall be established at levels not
exceeding an amount sufficient to cover the costs of administering
and enforcing the standards and regulations adopted under this
section. The fees established pursuant to this section shall be
deposited into the Lead-Related Construction Fund pursuant to
Section 105250.

(d) Five hundred thousand dollars ($500,000) is hereby
appropriated from the General Fund to the department, to be used
to develop, initiate, and administer this section until adequate fees
can be collected for the ongoing administration of this section.
These funds shall be repaid to the General Fund upon determination
by the Department of Finance that sufficient moneys are available
in the Lead-Related Construction Fund to repay that amount. No
interest shall be paid by the Lead-Related Construction Fund at
the time of repayment.

(e) (1) Notwithstanding the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code), the department may implement and administer this section
through all-county letters or similar instructions from the
department until regulations are adopted. The department shall
adopt emergency regulations implementing these provisions no
later than July 1, 2017. The department may readopt any emergency
regulation authorized by this section that is the same as or
substantially equivalent to an emergency regulation previously
adopted under this section.

(2) The initial adoption of emergency regulations pursuant to
this section and one readoption of emergency regulations shall be
deemed an emergency and necessary for the immediate
preservation of the public peace, health, safety, or general welfare.
Initial emergency regulations and the one readoption of emergency
regulations authorized by this section shall be exempt from review
by the Office of Administrative Law. The initial emergency
regulations and the one readoption of emergency regulations
authorized by this section shall be submitted to the Office of
Administrative Law for filing with the Secretary of State, and each
shall remain in effect for no more than 180 days, by which time
final regulations may be adopted.

SEC. 2.  

Section 105254 of the Health and Safety Code is
amended to read:

105254.  

(a) The following persons and firms engaged in the
following types of lead construction work shall have a certificate:

(1) Persons who receive pay for doing lead hazard evaluations,
including, but not limited to, lead inspections, lead risk
assessments, or lead clearance inspections, in residential or public
buildings.

(2) Persons preparing or designing plans for the abatement of
lead-based paint or lead hazards from residential or public
buildings.

(3)  Persons doing any work designed to reduce or eliminate
lead hazards on a permanent basis (to last 20 years or more) from
residential or public buildings.

(4) Persons inspecting for lead or doing lead abatement activities
in a public elementary school, preschool, or day care center.

(5) Persons doing lead-related construction work in a residential
or public building that will expose a person to airborne lead at or
above the eight-hour permissible exposure limit of 50 micrograms
per cubic meter.

(6) Firms, as defined by Section 745.83 of Title 40 of the Code
of Federal Regulations, and at least one person onsite and employed
by a firm, doing renovation, repair, or painting work in a residential
or public building that will disturb lead-based paint, as defined in
Section 35033 of Title 17 of the California Code of Regulations,
or presumed lead-based paint, as defined in Section 35043 of Title
17 of the California Code of Regulations, which regulations were
adopted by the State Department of Public Health pursuant to
Sections 105250 and 124160.

(b) Persons performing routine maintenance and repairs in
housing are not required to have a certificate if they are not
performing any of the activities listed under subdivision (a).

(c) The department may adopt regulations to modify certification
requirements for persons engaged in lead construction work based
on changes to state or federal law, or programmatic need.

(d) The department or any local enforcement agency may,
consistent with Section 17972, enter, inspect, and photograph any
premises where abatement or a lead hazard evaluation is being
conducted or has been ordered, enter the place of business of any
person who conducts abatement or lead hazard evaluations, and
inspect and copy any business record of any person who conducts
abatement or lead hazard evaluations to determine whether the
person is complying with this section.

(e) (1) Except as provided in paragraph (2), a violation of this
section shall be punishable by imprisonment for not more than six
months in the county jail, a fine of not more than one thousand
dollars ($1,000), or by both that imprisonment and fine.

(2) A violation of paragraph (6) of subdivision (a) shall be
punishable by imprisonment for not more than six months in the
county jail or a fine of not more than thirty-seven thousand five
hundred dollars ($37,500), or by both that imprisonment and fine.

SEC. 3.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

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