BILL NUMBER: AB 765 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 25, 2009
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
( Principal coauthors:
Senators Ashburn, Steinberg, and
Wolk )
(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 limit the
credit to taxpayers who purchased a qualified principal residence on
and after March 1, 2009, and before July 3, 2009, and on and after
the effective date of this bill and before March 1, 2010. This bill
would also require the aggregate limitation of credits to be reduced
by a specified amount per certification received by the Franchise Tax
Board .
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 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 July 3, 2009, and any taxpayer who purchases a qualified
residence on and after the effective date of the act amending this
paragraph, 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
allocated pursuant to this section shall not
exceed one hundred million dollars ($100,000,000). For each
certification received from a seller, as described in paragraph (2)
of subdivision (b), the total remaining amount of credit available
for allocation shall be reduced by an amount equal to 70 percent of
the credit allocated to the taxpayer. No credit may be allocated to a
taxpayer that purchased a qualified principal residence before July
3, 2009, unless a certification was provided to the Franchise Tax
Board within one week of the sale and no later than July 2, 2009.
(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 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.