BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 765
                                                                  Page  1

          Date of Hearing:   May 28, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                   AB 765 (Caballero) - As Amended:  May 21, 2009 

          Policy Committee:                              Revenue and  
          Taxation     Vote:                            9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill allows purchasers of a new principal residence to  
          reserve the recently-enacted home purchase credit at the time in  
          which they enter into an agreement with the seller. Currently  
          this reservation can be made only upon close of escrow.

           FISCAL EFFECT  

          Negligible effect on state costs or revenues. 

           COMMENTS  

           1)Background  . Legislation passed with the 2009-10 budget  
            authorized a one time tax credit for individuals  purchasing a  
            new, previously unoccupied, personal residence after March 1,  
            2009 and before March 1, 2010. The credit is the lesser of 5%  
            of the purchase price or $10,000, and is applied in equal  
            amounts over three successive taxable years beginning with the  
            year in which the purchase is made. The credit is capped at  
            $100 million, and is allocated on a first-come first-served  
            basis. In order to receive a reservation for the credit, the  
            seller must provide certification of sale to the taxpayer and  
            to the Franchise Tax Board within one week of the sale of the  
            principal residence.

           2)Purpose  . This bill is sponsored by the California Building  
            Industry Association. It is intended to provide assurance to  
            taxpayers entering into a contract for the purchase of a new  
            home that the credit will be available when the transaction is  
            complete. 









                                                                  AB 765
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           Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081