BILL NUMBER: AB 765 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 24, 2009
AMENDED IN ASSEMBLY MAY 21, 2009
AMENDED IN ASSEMBLY MAY 13, 2009
AMENDED IN ASSEMBLY MAY 11, 2009
INTRODUCED BY Assembly Members Caballero and Solorio
(Coauthors: Assembly Members Conway, Coto, Emmerson,
Galgiani, Gilmore, Hagman, Harkey, Hill, Huber, Jeffries,
Logue, Ma, Mendoza, Nestande, Nielsen, Portantino, Salas,
Silva, Smyth, Torres, and Tran)
FEBRUARY 26, 2009
An act to amend Section 17059 of the Revenue and Taxation Code,
relating to taxation , and declaring the urgency thereof, to
take effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
AB 765, as amended, Caballero. Income tax credit: purchase:
principal residence.
The Personal Income Tax Law authorizes a credit against the taxes
imposed by that law in an amount equal to the lesser of 5% of the
purchase price or $10,000 in the case of the purchase of a qualified
principal residence on and after March 1, 2009, and before March 1,
2010, but not to exceed an aggregate limitation of $100,000,000 for
all credits allowable. Existing law requires a certification that the
residence has never been occupied be provided to the Franchise Tax
Board within one week of the sale of the qualified principal
residence.
This bill would allow a taxpayer to reserve a credit with the
Franchise Tax Board and would require that the certification be
provided to the Franchise Tax Board within one week of the close of
escrow of the qualified principal residence.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17059 of the Revenue and Taxation Code is
amended to read:
17059. (a) (1) In the case of any taxpayer who purchases a
qualified principal residence on and after March 1, 2009, and before
March 1, 2010, there shall be allowed as a credit against the "net
tax," as defined in Section 17039, an amount equal to the lesser of 5
percent of the purchase price of the qualified principal residence
or ten thousand dollars ($10,000). Purchases occurring after
March 1, 2010, and prior to December 1, 2010, must be pursuant to an
enforceable contract to purchase the qualified principal residence
executed before March 1, 2010.
(2) The amount of any credit allowed under paragraph (1) shall be
applied in equal amounts over the three successive taxable years
beginning with the taxable year in which the purchase of the
qualified principal residence is made.
(3) The credit under this section shall be allowed for the
purchase of only one qualified principal residence with respect to
any taxpayer.
(4) A taxpayer may, but is not required to, reserve a credit prior
to close of escrow. To reserve a credit, the taxpayer and seller
shall jointly sign and submit to the Franchise Tax Board a
certification that they have entered into the agreement on or after
March 1, 2009, and before March 1, 2010. Upon receipt of the joint
certification, the Franchise Tax Board shall notify the taxpayer that
the board has conditionally reserved the credit for the taxpayer.
(b) (1) For purposes of this section, "qualified principal
residence" means a single-family residence, whether detached or
attached, that has never been occupied, that is purchased to be the
principal residence of the taxpayer for a minimum of two years and is
eligible for the homeowner's exemption under Section 218.
(2) No credit shall be allowed under this section unless the
taxpayer submits with his or her tax return a certification by the
seller of the qualified principal residence that the residence has
never been previously occupied. The seller shall provide the
certification to the taxpayer and to the Franchise Tax Board within
one week of the close of escrow of the qualified principal residence.
(3) If the taxpayer does not occupy the qualified principal
residence as his or her principal residence for at least two years
immediately following the purchase the credit shall be canceled, and
the taxpayer shall be liable for any credit allowed under this
section on previous tax returns.
(c) (1) In the case of two married taxpayers filing separately,
the credit allowed under subdivision (a) shall be equally apportioned
between the two taxpayers.
(2) If two or more taxpayers who are not married purchase a
qualified principal residence, the amount of the credit allowed under
subdivision (a) shall be allocated among the taxpayers in the same
manner as each taxpayer's percentage of ownership, except that the
total amount of the credits allowed to all of these taxpayers shall
not exceed ten thousand dollars ($10,000).
(d) The total amount of credit that may be allowed pursuant to
this section shall not exceed one hundred million dollars
($100,000,000).
(e) (1) Upon receipt of the certification from the seller, as
described in paragraph (2) of subdivision (b), the Franchise Tax
Board shall allocate the credit to the taxpayer on a
first-come, first-served first-come-first-served
basis. For each certification received from a seller, the
Franchise Tax Board shall reduce the total remaining amount of
credits available by the average tax credit that the Franchise Tax
Board estimates will be used by the average taxpayer.
(2) The taxpayer shall claim the credit on a timely filed original
return.
(3) The date a certification is received shall be determined by
the Franchise Tax Board.
(4) (A) The determinations of the Franchise Tax Board with respect
to the date a certification is received, and whether a return has
been timely filed for purposes of this subdivision, may not be
reviewed in any administrative or judicial proceeding.
(B) Any disallowance of a credit claimed due to a determination
under this subdivision, including the application of the limitation
specified in paragraph (1), shall be treated as a mathematical error
appearing on the return. Any amount of tax resulting from that
disallowance may be assessed by the Franchise Tax Board in the same
manner as provided by Section 19051.
(f) The Franchise Tax Board may prescribe rules, guidelines, or
procedures necessary or appropriate to carry out the purposes of this
section, including any guidelines regarding the allocation of the
credit allowed under this section. Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code does not apply to any rule, guideline, or procedure prescribed
by the Franchise Tax Board pursuant to this section.
(g) The credit allowed by this section is not a business credit
within the meaning of Section 17039.2.
(h) This section shall remain in effect only until December 1,
2013, and as of that date is repealed.
SEC. 2. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to facilitate California's economic recovery, a large
part of which is the maintenance of the new home tax credit that is
in imminent danger of expiring, it is necessary that this act take
effect immediately.