BILL NUMBER: AB 1705	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 8, 2010

INTRODUCED BY   Assembly Member V. Manuel Perez
    (   Coauthor:   Assembly Member  
Skinner  ) 

                        FEBRUARY 1, 2010

   An act to add Sections 17131.3, 24303, and 23456.3 to the Revenue
and Taxation Code, relating to taxation, to take effect immediately,
tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1705, as amended, V. Manuel Perez. Income taxation: exclusion:
grants for specified energy property.
   The Personal Income Tax Law and the Corporation Tax Law provide
various exclusions from gross income that is subject to tax imposed
by those laws.
   This bill would provide under those laws that gross income does
not include any grant  provided  to the taxpayer who
places in service specified energy property in accordance with the
federal American Recovery and Reinvestment  Tax  Act of
2009, but would require that the amount of any grant be used to
adjust the basis of the property in accordance with specified
requirements.
   This bill would make a legislative finding and declaration as to
the public purpose served by the bill.
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 17131.3 is added to the
Revenue and Taxation Code, to read:
   17131.3.  (a) Gross income shall not include any energy property
grant provided to the taxpayer who places in service specified energy
property in accordance with Section 1603 of Division B of the
American Recovery and Reinvestment Act of 2009 (Public Law 111-5),
but the grant amount shall be taken into account in adjusting the
basis of that property in the same manner as under Section 50(c) of
the Internal Revenue Code in the case of an energy credit.
   (b) This section shall become operative on February 17, 2009, and
apply for taxable years ending on or after that date. 

  SEC. 2.    Section 24303 is added to the Revenue
and Taxation Code, to read:
   24303.  (a) Gross income shall not include any grant provided to
the taxpayer who places in service specified energy property in
accordance with Section 1603 of Division B of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), but the grant amount
shall be taken into account in adjusting the basis of that property
in the same manner as under Section 50(c) of the Internal Revenue
Code in the case of an energy credit.
   (b) This section shall become operative on February 17, 2009, and
apply for taxable years ending on or after that date. 
   SECTION 1.    Section 17131.3 is added to the 
 Revenue and Taxation Code   , to read:  
   17131.3.  Any grant made in any taxable year by the Secretary of
the Treasury under Section 1603 of the American Recovery and
Reinvestment Tax Act of 2009 (Public Law 111-5) to a taxpayer who
places in service specified energy property shall not be includable
in the gross income or the alternative minimum taxable income of the
taxpayer, but shall be taken into account in determining the basis of
the property to which that grant relates, except that the basis of
that property shall be reduced using rules prescribed under Section
50(c) of the Internal Revenue Code in the same manner as a credit
calculated under Section 48 of the Internal Revenue Code, and
adjusted upward in accordance with rules applied by the Secretary of
the Treasury under Section 1603(f) of the American Recovery and
Reinvestment Tax Act of 2009 (Public Law 111-5). 
   SEC. 2.    Section 24303 is added to the  
Revenue and Taxation Code   , to read:  
   24303.  Any grant made in any taxable year by the Secretary of the
Treasury under Section 1603 of the American Recovery and
Reinvestment Tax Act of 2009 (Public Law 111-5) to a taxpayer who
places in service specified energy property shall not be includable
in the gross income or the alternative minimum taxable income of the
taxpayer, but shall be taken into account in determining the basis of
the property to which that grant relates, except that the basis of
that property shall be reduced using rules prescribed under Section
50(c) of the Internal Revenue Code in the same manner as a credit
calculated under Section 48 of the Internal Revenue Code, and
adjusted upward in accordance with rules applied by the Secretary of
the Treasury under Section 1603(f) of the American Recovery and
Reinvestment Tax Act of 2009 (Public Law 111-5). 
  SEC. 3.  Section 23456.3 is added to the Revenue and Taxation Code,
to read:
   23456.3.  (a) Section 56(g)(4)(B)(i) of the Internal Revenue Code
shall not apply with respect to any grant paid by the United States
Treasury pursuant to Section 1603 of Division B of the American
Recovery and Reinvestment Act of 2009 (Public Law 111-5).
   (b) This paragraph shall become operative on February 17, 2009,
and apply for taxable years ending on or after that date. 
  SEC. 4.    The Legislature finds and declares that
this act serves a public purpose by promoting the use of specified
energy property in accordance with the American recovery and
Reinvestment Act of 2009 (Public Law 111-5), and by providing for the
equitable and co equal treatment of all taxpayers who place that
property into service. 
   SEC. 4.    The Legislature finds and declares that
this act serves a public purpose by ensuring the fair and consistent
application of California law to recipients of grants made by the
Secretary of the Treasury under Section 1603 of the American Recovery
and Reinvestment Tax Act of 2009 (Public Law 111-5). 
  SEC. 5.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.