BILL NUMBER: SB 16 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Lowenthal
DECEMBER 1, 2008
An act to amend Section 19611 of, and to add Sections 17058.6 and
23610.6 to, the Revenue and Taxation Code, relating to taxation,
making an appropriation therefor, and declaring the urgency thereof,
to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 16, as introduced, Lowenthal. Low-income housing tax credits.
Existing law establishes a low-income housing tax credit program,
administered by the California Tax Credit Allocation Committee, which
provides procedures and requirements for the allocation of state tax
credit amounts among low-income housing projects based on federal
law.
This bill would, in the case of a project that has received or
receives preliminary reservation of state low-income housing tax
credit on or after July 1, 2008, and before January 1, 2010, allow
the credit to be refundable, and make an appropriation therefor, as
provided.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17058.6 is added to the Revenue and Taxation
Code, to read:
17058.6. (a) (1) For purposes of Section 17058, in the case of a
project that has received or receives a preliminary reservation of
state low-income housing tax credit on or after July 1, 2008, and
before January 1, 2010, and the amount allowable as a credit under
Section 17058 exceeds the tax liability computed under this part, the
excess shall be credited against other amounts due, if any, and the
balance, if any, shall be refunded to the taxpayer.
(2) For purposes of applying paragraph (1), Section 17039 shall be
applied by first reducing the "net tax" to the extent allowed under
that section by any other credits, and then any remaining "net tax"
shall first be offset by the amount described in paragraph (1) and
any remaining amount described in paragraph (1) shall then be
refunded to the taxpayer.
(b) This section shall not apply to any state low-income housing
credit reservation for which financial closing occurs on or after
July 1, 2008, and before December 31, 2008.
SEC. 2. Section 19611 of the Revenue and Taxation Code is amended
to read:
19611. (a) The Tax Relief and Refund Account is hereby created in
the General Fund. Notwithstanding Section 13340 of the Government
Code, all moneys in the Tax Relief and Refund Account are hereby
continuously appropriated, without regard to fiscal year, to the
Franchise Tax Board for purposes of making all payments as provided
in this section.
(b) Notwithstanding any other provision of law,
all payments required to be made to taxpayers or other persons from
the Personal Income Tax Fund shall be paid from the Tax Relief and
Refund Account.
(c) The Controller shall transfer, as needed, to the Tax Relief
and Refund Account:
(1) From the unexpended balance of the annual Budget Act
appropriation for Item 9100-101-001, Schedule 80-Renter's Tax Relief,
an amount determined by the Franchise Tax Board to be equivalent to
the total amount of renters' assistance credits and refunds allowed
under Section 17053.5.
(A) If there is no unexpended balance of the appropriation, as
provided for in paragraph (1), the Controller shall transfer
sufficient moneys from the Personal Income Tax Fund to make the
renters' assistance credits and refunds until there is an unexpended
balance.
(B) Subsequent to there being no unexpended balance of the
appropriation, as provided for in paragraph (1), and there being a
transfer of moneys from the Personal Income Tax Fund to make the
renters' assistance credits and refunds, reimbursement shall be made
from the unexpended balance of the appropriation as provided for in
paragraph (1) to the Personal Income Tax Fund. However, if no such
appropriation is subsequently made, reimbursement shall be made from
the General Fund.
(2) From the disability fund, the amount transferable to the
General Fund pursuant to subdivision (a) of Section 1176.5 of the
Unemployment Insurance Code.
(3) From the Personal Income Tax Fund, such
those additional amounts as determined by the Franchise
Tax Board to be necessary to make the payments required under this
section.
(4) From the Personal Income Tax Fund, those amounts as determined
by the Franchise Tax Board to be necessary to make the refunds
required under Section 17058.6.
(5) From the Corporation Income Tax Fund, those amounts as
determined by the Franchise Tax Board to be necessary to make the
refunds required under Section 23610.6.
SEC. 3. Section 23610.6 is added to the Revenue and Taxation Code,
to read:
23610.6. (a) (1) For purposes of Section 23610.5, in the case of
a project that has received or receives a preliminary reservation of
state low-income housing tax credit on or after July 1, 2008, and
before January 1, 2010, and the amount allowable as a credit under
Section 23610.5 exceeds the tax liability computed under this part,
the excess shall be credited against other amounts due, if any, and
the balance, if any, shall be refunded to the taxpayer.
(2) For purposes of applying paragraph (1), Section 23036 shall be
applied by first reducing the "tax" to the extent allowed under that
section by any other credits, and then any remaining "tax" shall
first be offset by the amount described in paragraph (1) and any
remaining amount described in paragraph (1) shall then be refunded to
the taxpayer.
(b) This section shall not apply to any state low-income housing
credit reservation for which financial closing occurs on or after
July 1, 2008, and before December 31, 2008.
SEC. 4. 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:
The state low-income housing tax credit is a critical source of
funding for the development of affordable rental housing. Because of
the financial downturn and the disruption to global capital markets,
the ability of affordable housing developers, who have been awarded
credits to obtain private equity investment in return for the
credits, has decreased precipitously and, in some cases, disappeared
altogether. Some developers have been forced to return tax credit
awards unused, others are struggling to arrange investors, and those
projects that have found investors have had to seek additional public
funding to offset the decline in pricing and to maintain the
financial feasibility of projects, severely jeopardizing the state's
goal of providing decent, safe, and sanitary housing for all
Californians. An immediate and short-term change to make state
low-income housing tax credits refundable will entice investors back
into affordable housing until global financial markets stabilize.