BILL ANALYSIS
AB 94
Page 1
ASSEMBLY THIRD READING
AB 94 (Evans)
As Amended April 20, 2009
Majority vote
REVENUE & TAXATION 7-1 APPROPRIATIONS 13-4
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|Ayes:|Charles Calderon, Beall, |Ayes:|De Leon, Ammiano, Charles |
| |Coto, Ma, Nielsen, | |Calderon, Davis, Fuentes, |
| |Portantino, Saldana | |Hall, John A. Perez, |
| | | |Price, Skinner, Solorio, |
| | | |Audra Strickland, |
| | | |Torlakson, Krekorian |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|DeVore |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller |
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SUMMARY : Reauthorizes the awarding of tax credits under the
Natural Heritage Preservation Tax Credit Act of 2000 (Act) through
fiscal year (FY) 2018-19. Specifically, this bill :
1)Deletes the provisions of the Act that:
a) Limit the total amount of tax credits that can be awarded
under the Act to $100 million; and,
b) Prohibit tax credits from being awarded after FY 2007-08
without further statutory authorization.
2)Provides that tax credits may be awarded under the Act only if
the amount of all lost revenue resulting from the award of tax
credits is reimbursed by transfer to the General Fund (GF) of
"moneys that are not from the GF."
3)Defines "moneys that are not from the GF" as any of the
following:
a) State bond funds as described in Public Resources Code
(PRC) Section 37032;
b) State funds available for the purposes of the Act, other
than funds specified in PRC Section 37014;
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c) Court settlements;
d) Private or public donations;
e) Local government funds of any type; or,
f) Federal funds available for the purposes of the Act.
4)Expands the Act's definition of "donee" to include a local
government that has submitted an application directly to the
Wildlife Conservation Board (WCB).
5)Provides that, if a local government applies directly to the WCB
for acceptance of a qualified donation, the WCB may provide
conditional approval for the local government to acquire the
property under the Act. The local government shall reimburse
the GF for the tax credit claimed by transferring funds in the
full amount of the approved tax credit to the WCB for deposit
into the Natural Heritage Preservation Tax Credit Reimbursement
Account.
6)Provides that, if a local government applies directly to the WCB
for acceptance of a qualified donation, and the WCB provides
conditional approval, the local government shall have 60 days to
transfer to the WCB the full amount of funds necessary to
reimburse the GF. Upon receipt of these funds, the WCB shall
provide the donor and the local government with a notice of
final approval of the tax credit.
7)Specifies that the information the Franchise Tax Board (FTB)
provides the WCB on tax credits claimed shall include the tax
year for which the credit was claimed.
8)Provides that, if a local government applies for a designated
nonprofit organization to acquire and accept donated property,
the local government shall comply with all requirements of the
Act that apply to the local government transferring funds to the
WCB necessary to reimburse the GF.
9)Amends the definition of "displaced person" contained in the
Government Code chapter that provides for relocation assistance
to those displaced by a public entity. Specifically, this bill
specifies that a "displaced person" shall not include "[a]ny
person who donates or willingly sells his or her property for
the purposes of protecting fish and wildlife habitat, providing
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recreational areas, or preserving cultural or agricultural
resources and open space and any person who occupies that
property on a rental basis." However, this exclusion does not
apply when a sale is in response to an eminent domain
proceeding.
10)Makes certain technical and non-substantive changes to the Act.
EXISTING LAW :
1)Establishes the WCB. The WCB is charged with authorizing and
allocating funds for the purchase of property suitable for
recreation and the preservation, protection and restoration of
wildlife habitat.
2)Requires the WCB to implement the Natural Heritage Preservation
Tax Credit Program (Program). Under the Program, upon the WCB's
approval, a "donor" may contribute qualified property to a
"donee" and receive a nonrefundable tax credit equal to 55% of
the fair market value of any qualified contribution of property
made on or before June 30, 2008.
3)Limits the total amount of tax credits that can be awarded under
the Act to $100 million and prohibits tax credits from being
awarded after FY 2007-08 without further statutory
authorization.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)No direct impact on the General Fund (GF) as the credits
(estimated by the Franchise Tax Board to be about $7 million per
year) are fully reimbursed by bond funds, federal or local
funds, donations, or other sources, all of which could be used
for other purposes, absent this program.
2)Potential reallocation of tens of millions of Proposition 84
bond funds, to the extent the funds currently authorized to be
used to reimburse the GF for the credits would be available for
other purposes absent the reauthorization of this program.
3)Minor indirect impact (initially in the range of $20,000 per
year and growing over time) on GF expenditures to backfill
schools for reduced property taxes, to the extent that the
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credit results in a higher level of land donations and, hence, a
reduced property tax roll.
COMMENTS : The author states, "With a continually expanding
population, California needs to preserve land, restore habitats,
and protect water supplies. However, we are also facing uncertain
fiscal times, where every dollar of previously approved bonds must
be maximized. This bill would extend a 'financial tool' that can
save 45% on the purchase price if the state or local agency
chooses to use the tax credit program to acquire recreation or
habitat lands AND if the landowner agrees. Effectively, this
voluntary program allows California to acquire $18 million of land
for every $10 million of bond funding, while providing fair value
to the landowner, and keeping the General Fund whole. During its
previous authorization period, the Natural Heritage Preservation
Tax Credit saved California approximately $40 million in the
acquisition of more than 8,000 acres of land in Calaveras, Lake,
Los Angeles, Madera, Marin, Monterey, Sacramento, San Luis Obispo,
Santa Barbara, Tehama, and Ventura Counties. This bill would
allow the state to once again work with interested landowners to
provide a legacy for future generations of Californians."
Committee Staff Comments:
1)A Different Kind of Credit.
a) Credits are used to reduce the amount of taxes a taxpayer
owes. Typically, the Legislature enacts tax credits to
encourage socially beneficial behavior. Thus, credit amounts
are usually based on a percentage of specified costs incurred
by the taxpayer. In the present case, the amount of the
credit is equal to 55% of the fair market value of land
donated.
b) Tax credits can either be nonrefundable or refundable.
Nonrefundable credits, like those authorized by the Act, work
only to reduce a taxpayer's tax liability. Usually, any
remaining credit amount left after reducing the taxpayer's
liability to zero can be carried forward to offset the
taxpayer's tax liability in future years. With a refundable
credit, however, the state must refund the remaining value of
the credit after tax due is reduced to zero. It should be
noted that nonrefundable credits rarely help lower-income
taxpayers because these taxpayers have little or no tax
liability to offset.
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c) The Natural Heritage Preservation Tax Credit operates
differently from other tax credits. Specifically, these
credits are funded by bond funds, private donations, and
other specified moneys, instead of foregone tax revenues that
would normally flow to the GF. Because these credits have no
impact on the GF, this bill removes the current $100 million
cap contained in the Act.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
FN: 0001037