BILL NUMBER: AB 1178	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 16, 2010
	AMENDED IN SENATE  MAY 27, 2010
	AMENDED IN ASSEMBLY  JANUARY 25, 2010
	AMENDED IN ASSEMBLY  JANUARY 13, 2010
	AMENDED IN ASSEMBLY  JANUARY 6, 2010
	AMENDED IN ASSEMBLY  JANUARY 4, 2010

INTRODUCED BY   Assembly Member  Block   Torres

    (   Coauthors:  
Assembly Members   Blumenfield,  
  Brownley,    
Nava,     Ruskin, 
   and Salas   ) 

                        FEBRUARY 27, 2009

    An act to amend, repeal, and add Section 25110 of, and to
add and repeal Section 17052.1 of, the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy. 
 An act to add Section 107.10 to the Revenue and Taxation Code,
relating to taxation. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1178, as amended,  Block   Torres  .
 Taxation: personal income tax credit: corporation taxes: tax
havens.   Property taxation: possessory interests:
publicly owned low-income housing.  
   Existing property tax law requires that all property subject to
tax be assessed at its full value, and includes certain possessory
interests among those property interests subject to tax. Existing
property tax law defines a taxable possessory interest to be a use
that is independent, durable, and exclusive.  
   This bill would clarify, for purposes of the definition of a
taxable possessory interest, that the possession or use of publicly
owned low-income housing by low-income tenants, as defined, is not
independent. This bill would state that its provisions are
declaratory of existing law.  
   The Personal Income Tax Law authorizes various credits against the
taxes imposed by that law.  
   This bill would authorize a credit against those taxes for certain
qualified teachers in an amount equal to $500 for each taxable year
beginning on or after January 1, 2011, and before January 1, 2012,
and in an amount equal to $850 for each taxable year beginning on and
after January 1, 2012, and before January 1, 2014, as specified.
 
   The Corporation Tax Law imposes taxes measured by income and, in
the case of a business with income derived from or attributable to
sources both within and without this state, apportions the income
between this state and other states and foreign countries in
accordance with a specified apportionment formula based on the
property, payroll, and sales within and without this state, except as
otherwise provided. That law allows corporations to elect whether
their income is determined on a water's-edge basis or on a worldwide
unitary basis. In general, a corporation that makes a water's-edge
election is subject to tax on income only from sources within the
United States but is required to take into account the income and
apportionment factors of certain specified affiliated entities.
 
   This bill would expand the list of specified affiliated entities
for taxable years beginning on or after July 1, 2011, and before July
1, 2014, to include a corporation that is incorporated,
headquartered, or located in a country that is a tax haven, as
defined, and would make related legislative findings and
declarations.  
   This bill would take effect immediately as a tax levy. 
   Vote: majority. Appropriation: no. Fiscal committee:  yes
  no  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares all
of the following:  
   (a) The provision of housing is of vital statewide importance to
the health, safety, and welfare of the residents of this state and
the basic housing goal of the state is to provide a decent home and
suitable living environment for every California family.  
   (b) There is an urgent and continuing need to provide affordable
housing to meet the increasingly unfulfilled housing needs of the
state.  
   (c) Private enterprise and investment cannot economically achieve
the needed construction of decent, safe, and sanitary housing at
rents or purchase prices which persons and families of lower income
can afford.  
   (d) State law establishes in every city and county a housing
authority with the responsibility of addressing the lack of adequate
housing for persons of lower income.  
   (e) It is the policy of the state that each housing authority
manage and operate its housing projects in an efficient manner so as
to enable it to fix the rentals for dwelling accommodations at the
lowest possible rates consistent with it providing decent, safe, and
sanitary dwelling accommodations, and that no housing authority shall
construct or operate any such project for profit, or as a source of
revenue to the city or the county.  
   (f) The purpose behind the taxation of possessory interests is to
protect the public domain from private profit without tax liability.
 
   (g) The use of public housing by low-income persons is an
essential public use of publicly owned property that serves only to
benefit the government and is necessary to further a statewide public
purpose, which can be distinguished from those types of private uses
with a profit motive for which the possessory interest tax was
intended to apply. 
   SEC. 2.    Section 107.10 is added to the  
Revenue and Taxation Code   , to read:  
   107.10.  (a) For purposes of applying paragraph (1) of subdivision
(a) of Section 107 to a lease of publicly owned low-income housing,
the possession of, claim to, or right to the possession of, land or
improvements is not independent if the lessee is a low-income tenant.

   (b) For purposes of this section, "low-income tenant" has the same
meaning as "lower income households" as defined by Section 50079.5
of the Health and Safety Code. 
   SEC. 3.    (a) It is the intent of the Legislature in
enacting this act to provide legislative direction to county
assessors, the State Board of Equalization, the courts, and other
involved parties regarding the interpretation of the term
"independent" as it relates to publicly owned low-income housing.
 
   (b) Section 107.10 of the Revenue and Taxation Code, as added by
this act, does not constitute a change in, but rather, is declaratory
of, existing law. Therefore, because this act is declaratory of
existing law, no provision of state law, including, but not limited
to, Section 8 of Article XVI of the California Constitution, requires
reimbursement to any entity for any ad valorem property tax revenue
losses that may result from this act.  All matter omitted in
this version of the bill appears in the bill as amended in the
Senate, May 27, 2010. (JR11)