BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
SBx8 32 - Wolk
Introduced: February 8, 2010
Hearing: February 11, 2010 Fiscal: Yes
SUMMARY: Conforms State Law to Certain Provisions of
Federal Law
EXISTING LAW provides modified conformity of state's
Revenue and Taxation Code to the Internal Revenue Code and
specified public laws.
THIS BILL conforms California law to many of the
federal income tax law changes made from 2005 to 2008 by
changing the specified date in statute from January 1, 2005
(existing law), to January 1, 2009 (this bill), for taxable
years beginning on or after January 1, 2010.
THIS BILL conforms California law to one federal law
change from the American Recovery and Reinvestment Act of
2009 by excluding from income grants made in-lieu of
federal renewable energy tax credits.
In addition, the bill makes numerous changes to
specifically not conform to or modify certain items in the
IRC. The following tables, provided by FTB, list the
following:
Federal Act sections that impact provisions of
the Personal Income Tax Law (PITL), Administration
SBx8 32 - Wolk
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of Franchise and Income Tax Law (AFITL), and
Corporation Tax Law (CTL),
Beginning page numbers in FTB's annual report
where that provision is discussed, and
Changes under this bill--whether SBx8 32
conforms or does not conform to that provision.
(Note that conformity decisions that require
modification are listed in the conform column.)
Note: for all below conformity tables, differences between
the measure considered on July 8, 2009 and the August 18,
2009 version of SBX8 32 are noted in bold underline .
2005 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
-------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------------------------
--------------------------------------------------------------------
| |
| Table 3 - ETIA of 2005 (PL 109-58) |
| |
--------------------------------------------------------------------
---------------------------------------------------------------------
| |FTB's 2005 | Decision |
| | Annual | |
SBx8 32 - Wolk
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| | Report | |
| | Page No. | |
| | | |
| | | |
---------------------------------------------------------------------
|------+---------------------------------+-----------+-------+-------|
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1308 |Electric Transmission Property | 38 | PIT | CORP |
| |Treated As 15-year Property | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1309 |Expansion of Amortization For | 40 | X | |
| |Certain Atmospheric Pollution | | | |
| |Control Facilities In Connection | | | |
| |With Plants First Placed in | | | |
| |Service after 1975 | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1310 |Modification to Special Rules | 41 | X | |
| |For Nuclear Decommissioning Cost | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1323 |Temporary Expensing for | 50 | | X |
| |Equipment Used in Refining | | | |
| |Liquids Fuels | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1324 |Pass Through to Owners of | 54 | | X |
| |Deduction for Capital Costs | | | |
| |Incurred By Small Refiner | | | |
| |Cooperatives in Complying With | | | |
| |EPA Sulfur Regulations | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1325 |Natural Gas Distribution Lines | 57 | PIT | CORP |
| |Treated As 15-Year Property | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
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| 1326 |Natural Gas Gathering Lines | 59 | PIT | CORP |
| |Treated As 7-Year Property | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1328 |Determination of Small Refiner | 67 | | X |
| |Exception to Oil Depletion | | | |
| |Deduction | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1329 |Amortization of Geological and | 68 | | X |
| |Geophysical Expenditures | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1331 |Energy Efficient Commercial | 71 | | X |
| |Buildings Deduction | | | |
| | | | | |
--------------------------------------------------------------------
| 1351 |Expansion of Research Credit | 101 | | X |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1363 |Modification of Recapture Rules | 107 | X | |
| |for Amortizable Section 197 | | | |
| |Intangibles | | | |
| | | | | |
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---------------------------------------------------------------------
| |
| Table 5 - GO Zone Act of 2005 (PL 109-135) |
| |
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----------------------------------------------------------------------
| |FTB's 2005 | Decision |
| | Annual | |
| | Report | |
| | Page No. | |
| | | |
| | | |
----------------------------------------------------------------------
SBx8 32 - Wolk
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|------+----------------------------------+-----------+-------+-------|
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|101-F |Expensing for Certain Demolition | 182 | | X |
| |and Clean-up Costs | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|101-O |Treatment of Public Utility | 203 | | X |
| |Disaster Losses | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
| 303 |Modification of Effective Date of | 253 | X | |
| |Exception from Suspension Rules | | | |
| |for Certain Listed and Reportable | | | |
| |Transactions | | | |
| | | | | |
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| 305 |Disclosures of Certain Tax Return | 256 | | X |
| |Information | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|401-42|Tax Technical Provisions | 261 | X | |
| 3 | | | | |
| | | | | |
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2006 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
---------------------------------------------------------------------
| |
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| Table 1 - TIPRA of 2005 (PL 109-222) |
| |
| |
| |
---------------------------------------------------------------------
----------------------------------------------------------------------
| |FTB's 2006 | Decision |
| | Annual | |
| | Report | |
| | Page No. | |
| | | |
| | | |
----------------------------------------------------------------------
|------+----------------------------------+-----------+-------+-------|
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|Title |OTHER PROVISIONS | | | |
|II | | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|201 |Clarification of Taxation of | 23 | X | |
| |Certain Settlement Funds | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|202 |Modification of Active Business | 25 | X | |
| |Definition under Section 355 | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|204 |Capital Gains Treatment for | 31 | X | |
| |Certain Self-Created Musical | | | |
| |Works | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|207 |Amortization of Expenses Incurred | 38 | X | |
| |in Creating or Acquiring Music or | | | |
| |Music Copyrights | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|209 |Modification of Treatment of | 43 | X | |
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| |Loans to Qualified Continuing | | | |
| |Care Facilities | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|Title |REVENUE OFFSET PROVISIONS | | | |
|V | | | | |
| | | | | |
---------------------------------------------------------------------
|501 |Application of Earnings Stripping | 50 | X | |
| |Rules to Partners Which are | | | |
| |Corporations | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|503 |5-Year Amortization of Geological | 53 | |X |
| |and Geophysical Expenditures for | | | |
| |Certain Major Integrated Oil | | | |
| |Companies | | | |
| | | | | |
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| |
| Table 1 - TIPRA of 2005 (PL 109-222) |
| |
| |
| |
---------------------------------------------------------------------
|------+----------------------------------+-----------+-------+-------|
|507 |Section 355 Not to Apply to | 65 | X | |
| |Distributions Involving | | | |
| |Disqualified Investment Companies | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|510 |Increase in Age of Minor Children | 75 | X | |
| |Whose Unearned Income is Taxed as | | | |
| |if Parent's Income | | | |
| | | | | |
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---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------------------------------
| Table 4 - Pension Protection Act of 2006 (PPA) (PL 109-280) |
| |
----------------------------------------------------------------------
----------------------------------------------------------------------
| |FTB's 2006 | Decision |
| | Annual | |
| | Report | |
| | Page No. | |
| | | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform |
| n | | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Title |REFORM OF FUNDING FOR | |
| I |SELF-EMPLOYED DEFINED BENEFIT | |
| |PENSION PLANS | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 112 |Minimum Funding Standards; | 103 | X | |
| |Funding Rules for Single-Employer | | | |
| |Defined Benefit Pension Plans | | | |
| | | | | |
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|------+----------------------------------+-----------+-------+--------|
| 113 |Benefit Limitations Under | 125 | X | |
| |Single-Employer Plans | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Title |FUNDING RULES FOR MULTIEMPLOYER | |
| II |DEFINED BENEFIT PENSION PLANS | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 211 |Funding Rules for Multiemployer | 143 | X | |
| |Defined Benefit Plans | | | |
| | | | | |
----------------------------------------------------------------------
| 212 |Additional Funding Rules for | 151 | X | |
| |Multiemployer Plans in Endangered | | | |
| |or Critical Status | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 221 |Sunset of Additional Funding | 177 | X | |
| |Rules | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Title |PENSION RELATED REVENUE | |
| VIII |PROVISIONS | |
| | | |
|------+----------------------------------+----------------------------|
|Subtit|Improvements in Portability, | |
| le C |Distributions, and Contribution | |
| |Rules | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 827 |Penalty-Free Withdrawals from | 290 | X | |
| |Retirement Plans for Individuals | | | |
| |Called to Active Duty for at | | | |
| |Least 179 Days | | | |
| | | | | |
----------------------------------------------------------------------
| 828 |Waiver of 10% Early Withdrawal | 293 | X | |
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| |Penalty Tax on Certain | | | |
| |Distributions of Pension Plans | | | |
| |for Public Safety Employees | | | |
| | | | | |
----------------------------------------------------------------------
| 831 |Allowance of Additional IRA | 298 | X | |
| |Payments in Certain Bankruptcy | | | |
| |Cases | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 833 |Inflation Indexing of Gross | 301 | X | |
| |Income Limitations on Certain | | | |
| |Retirement Savings Incentives | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Subtit|Health and Medical Benefits | |
| le D | | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 844 |Treatment of Annuity and Life | 315 | | X |
| |Insurance Contracts with a | | | |
| |Long-Term Care Insurance Feature | | | |
| | | | | |
----------------------------------------------------------------------
|Subtit|Other Provisions | | | |
| le F | | | | |
| | | | | |
----------------------------------------------------------------------
| 863 |Treatment of Death Benefits from | 335 | X | |
| |Corporate-Owned Life Insurance | | | |
| | | | | |
----------------------------------------------------------------------
| 866 |Exemption of Income from | 345 | X | |
| |Leveraged Real Estate Held by | | | |
| |Church Plans | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 868 |Gratuitous Transfer for Benefits | 348 | X | |
| |of Employees | | | |
| | | | | |
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----------------------------------------------------------------------
----------------------------------------------------------------------
|Title |PROVISIONS RELATING TO EXEMPT | |
| XII |ORGANIZATIONS | |
| | | |
----------------------------------------------------------------------
|Subtit|Reforming Exempt Organizations | |
| le B | | |
| | | |
|------+----------------------------------+----------------------------|
| Part |General Reforms | |
| 1 | | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 1211 |Reporting on Certain Acquisitions | 429 | X | |
| |of Interests on Insurance | | | |
| |Contracts in Which Certain Exempt | | | |
| |Organizations Hold an Interest | | | |
| | | | | |
----------------------------------------------------------------------
| 1213 |Reform of Charitable | 437 | X | |
| |Contributions of Certain | | | |
| |Easements in Registered Historic | | | |
| |Districts and Reduced Deduction | | | |
| |for Portion of Qualified | | | |
| |Conservation Contribution | | | |
| |Attributable to Rehabilitation | | | |
| |Credit | | | |
| | | | | |
----------------------------------------------------------------------
| 1214 |Charitable Contributions for | 443 | X | |
| |Taxidermy Property | | | |
| | | | | |
----------------------------------------------------------------------
| 1215 |Recapture of Tax Benefit for | 446 | X | |
| |Charitable Contributions of | | | |
| |Exempt Use Property Not Used for | | | |
| |an Exempt Use | | | |
| | | | | |
----------------------------------------------------------------------
| 1216 |Limitation of Deduction for | 451 | X | |
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| |Charitable Contributions of | | | |
| |Clothing and Household Items | | | |
| | | | | |
----------------------------------------------------------------------
| 1217 |Modification of Recordkeeping | 455 | X | |
| |Requirements for Certain | | | |
| |Charitable Contributions | | | |
| | | | | |
----------------------------------------------------------------------
| 1218 |Contributions of Fractional | 457 | X | |
| |Interests in Tangible Personal | | | |
| |Property | | | |
| | | | | |
----------------------------------------------------------------------
| 1219 |Provisions Relating to | 460 | X | |
| |Substantial and Gross | | | |
| |Overstatements of Valuations | | | |
| | | | | |
----------------------------------------------------------------------
| 1220 |Additional Standards for Credit | 465 | X | |
| |Counseling Organizations | | | |
| | | | | |
----------------------------------------------------------------------
| 1222 |Definition of Convention or | 479 | X | |
| |Association of Churches | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 1223 |Notification Requirement for | 481 | X | |
| |Entities Not Currently Required | | | |
| |to File | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| Part |Improved Accountability of Donor | |
| 2 |Advised Funds | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|1231-1|Excise Taxes Relating to Donor | 492 | | X |
| 235 |Advised Funds, Excess Benefit | | | |
| |Transactions Involving Donor | | | |
| |Advised Funds and Sponsoring | | | |
SBx8 32 - Wolk
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| |Organizations, Excess Business | | | |
| |Holdings of Donor Advised Funds, | | | |
| |Returns of, and Application for | | | |
| |Recognition by Sponsoring | | | |
| |Organizations | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| Part |Improved Accountability of | |
| 3 |Supporting Organizations | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|1241-1|Requirements for Supporting | 510 | |X |
| 245 |Organizations, Excess Benefit | | | |
| |Transactions Involving Supporting | | | |
| |Organizations, Excess Business | | | |
| |Holding of Supporting | | | |
| |Organizations, Treatment of | | | |
| |Amounts Paid to Supporting | | | |
| |Organizations by Private | | | |
| |Foundations, and Returns of | | | |
| |Supporting Organizations | | | |
| | | | | |
----------------------------------------------------------------------
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| |
| Table 5 - TRHCA of 2006 (PL 109-432) |
| |
| |
| |
---------------------------------------------------------------------
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| | FTB's Annual | Decision |
| | Report Page | |
| | No. | |
SBx8 32 - Wolk
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| | | |
| | | |
| | | |
----------------------------------------------------------------------
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| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
---------------------------------------------------------------------
---------------------------------------------------------------------
|Divisi|Extension and Expansion of | |
| on A |Certain Tax Relief Provisions | |
| |and Other Tax Provisions | |
| | | |
|------+------------------------------+-------------------------------|
|Title |EXTENSION AND MODIFICATION OF | |
| I |CERTAIN PROVISIONS | |
| | | |
---------------------------------------------------------------------
---------------------------------------------------------------------
| 104 |Extension and Modification of | 538 | | X |
| |Research Credit | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 122B |Disclosure of Return | 577 | | X |
| |Information Regarding | | | |
| |Terrorist Activity | | | |
| | | | | |
---------------------------------------------------------------------
---------------------------------------------------------------------
|Title |ENERGY TAX PROVISIONS | |
| II | | |
| | | |
---------------------------------------------------------------------
|------+------------------------------+---------------+-------+-------|
| 204 |Deduction for Energy | 589 | | X |
| |Efficient Commercial | | | |
| |Buildings | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 209 |Special Depreciation | 597 | | X |
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| |Allowance for Cellulosic | | | |
| |Biomass Ethanol Plant | | | |
| |Property | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
|Title | OTHER PROVISIONS | | | |
| IV | | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 402 |Credit for Prior Year Minimum | 616 | | X |
| |Tax Liability Made Refundable | | | |
| |After Period of Years | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 404 |Partial Expensing for Advance | 620 | | X |
| |Mine Safety Equipment | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 406 |Whistleblower Reforms | 624 | | X |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 407 |Frivolous Tax Submissions | 626 | X | |
| | | | | |
---------------------------------------------------------------------
| 409 |Clarification of Taxation of | 629 | X | |
| |Certain Settlement Funds Made | | | |
| |Permanent - Effective in | | | |
| |Taxable Year 2011. | | | |
| | | | | |
---------------------------------------------------------------------
| 410 |Modification of Active | 630 | X | |
| |Business Definition Under | | | |
| |Section 355 Made Permanent - | | | |
| |Effective in Taxable Year | | | |
| |2011. | | | |
| | | | | |
---------------------------------------------------------------------
| 412 |Capital Gains Treatment for | 635 | X | |
| |Certain Self-Created Musical | | | |
| |Works Made Permanent | | | |
| | | | | |
---------------------------------------------------------------------
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| 417 |Exclusion of Gain from Sale | 648 | X | |
| |of Principal Residence by | | | |
| |Certain Employees of the | | | |
| |Intelligence Community | | | |
| | | | | |
---------------------------------------------------------------------
| 418 |Sale of Property by Judicial | 650 | X | |
| |Officers | | | |
| | | | | |
---------------------------------------------------------------------
| 424 |Modification of Excise Tax on | 661 | | X |
| |Unrelated Business Taxable | | | |
| |Income of Charitable | | | |
| |Remainder Trusts | | | |
| | | | | |
---------------------------------------------------------------------
| 425 |Loans to Qualified Continuing | 662 | X | |
| |Care Facilities Made | | | |
| |Permanent - Effective in | | | |
| |Taxable Year 2011 | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 426 |Technical Corrections | 664 | X | |
| | | | | |
---------------------------------------------------------------------
2007 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
------------------------------------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------------
SBx8 32 - Wolk
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------------------------------------------------------------------- ------------------------------------------------------------------- --------------------------------------------------------------------
------------------------------------------------------------------- ------------------------------------------------------------------- --------------------------------------------------------------------
-------------------------------------------------------------------
| |
| |
| Table 4 - The Mortgage Forgiveness Debt Relief Act (MFDRA) (PL |
| 110-142) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2007 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | | Conform |
| n | | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|1 - 2 |Exclusion of discharge of | 66 | SB 1055 | |
| |principal residence | |(2007/2008)| |
| |indebtedness | | | |
SBx8 32 - Wolk
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|------+--------------------------+-----------+-----------+---------|
| 3 |Extension of deduction | 68 | | X |
| |for private mortgage | | | |
| |insurance | | | |
|------+--------------------------+-----------+-----------+---------|
| 4 |Change in tests to | 70 | X | |
| |qualify as cooperative | | | |
| |housing corporation | | | |
|------+--------------------------+-----------+-----------+---------|
| 5 |Exclusion from income for | 71 | X | |
| |benefits provided to | | | |
| |volunteer EMS and | | | |
| |firefighters | | | |
|------+--------------------------+-----------+-----------+---------|
| 6 |Modify the prohibition | 74 | X | |
| |against full-time | | | |
| |students from qualifying | | | |
| |for LIHTC unit | | | |
|------+--------------------------+-----------+-----------+---------|
| 7 |Allow surviving spouse to | 76 | X | |
| |exclude from gross income | | | |
| |up to $500,000 of the | | | |
| |gain from sale of | | | |
| |principal residence if | | | |
| |the sale occurs within 2 | | | |
| |years of the death of the | | | |
| |spouse | | | |
-------------------------------------------------------------------
| 8 |Increase penalty for | 77 | X | |
| |failure to file | | | |
| |partnership returns | | (20% of | |
| | | | federal | |
| | | | penalty) | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 9 |Impose a penalty for | 79 | X | |
| |failure to file S | | | |
| |corporation returns | | (20% of | |
| | | | federal | |
| | | | penalty) | |
| | | | | |
-------------------------------------------------------------------
SBx8 32 - Wolk
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------------------------------------------------------------------
| |
| Table 6 - The Tax Technical Corrections Act of 2007 (PL 110-172) |
| |
------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2007 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
------------------------------------------------------------------
| | | | Conform | Not |
| | | | |Conform |
| | | | | |
|------+--------------------------+-----------+-----------+--------|
| |The Tax Technical | 85 | X | |
| |Correction Act of 2007 | | | |
| |(TTCA) | | | |
------------------------------------------------------------------
2008 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
-------------------------------------------------------------------
| |
| |
| Table 2 - Heartland, Habitat, Harvest, and Horticulture Act of |
| 2008 (HHHHA)(PL 110-246) |
SBx8 32 - Wolk
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| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | | Conform |
| n | | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|15302 |Two-Year Extension of | 17 | X | |
| |Special Rule Encouraging | | | |
| |Contributions of Capital | | | |
| |Gain Real Property For | | | |
| |Conservation Purposes | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|15303 |Deduction for Endangered | 21 | X | |
| |Species | | | |
| | | | | |
| |Recovery Expenditures | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|15344 |Three Year Depreciation | 46 | PIT | CORP |
| |for Race Horses | | | |
| | | | | |
| |That are Two Years Old or | | | |
| |Younger | | | |
| | | | | |
-------------------------------------------------------------------
|15351 |Limitation of Excess Farm | 52 | | X |
| |Losses of Certain | | | |
| |Taxpayer | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
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|15353 |Information Reporting for | 56 | X | |
| |Commodity Credit | | | |
| |Corporation Transactions | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| |
| |
| Table 3 - Heroes Earnings Assistance and Relief Tax Act of 2008 |
| (HEARTA)(PL 110-245) |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | |Conform |
| n | | | | |
| | | | | |
-------------------------------------------------------------------
| 107 |Distribution from | 75 | X | |
| |Retirement Plans to | | | |
| |Individuals Called to | | | |
| |Active Duty | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 109 |Contributions of Military | 78 | X | |
| |Death Gratuities to Roth | | | |
| |IRAs and Education | | | |
| |Savings Accounts | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
SBx8 32 - Wolk
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| Table 3 - Heroes Earnings Assistance and Relief Tax Act of 2008 |
| (HEARTA)(PL 110-245) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| 110 |Suspension of 5-Year | 82 | X | |
| |Period during Service | | | |
| |with the Peace Corps | | | |
| | | | | |
-------------------------------------------------------------------
| 112 |State Payments to Service | 86 | X | |
| |Members Treated as | | | |
| |Qualified Military | | | |
| |Benefits | | | |
| | | | | |
-------------------------------------------------------------------
| 113 |Permanent Exclusion of | 87 | X | |
| |Gain from Sale of a | | | |
| |Principal Residence by | | | |
| |Certain Employees of the | | | |
| |Intelligence Community | | | |
| | | | | |
-------------------------------------------------------------------
| 114 |Special Disposition Rules | 89 | X | |
| |for Unused Benefits in | | | |
| |Health Flexible Spending | | | |
| |Arrangements of | | | |
| |Individuals Called to | | | |
| |Active Duty | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 303 |Increase in Minimum | 108 | X | |
| |Penalty on Failure to | | | |
| | | | | |
| |File a Return of Tax | | | |
| | | | | |
-------------------------------------------------------------------
SBx8 32 - Wolk
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-------------------------------------------------------------------
| |
| |
| Table 4 - Housing and Economic Recovery Act of 2008 (HERA)(PL |
| 110-289) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | | Conform |
| n | | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|3001-3|Various Housing Tax | 111 | X | |
| 005 |Incentives Related to the | | | |
| |Low-Income Housing Tax | | | |
| |Credit | | | |
| | | | | |
-------------------------------------------------------------------
| 3091 |Returns relating to | 182 | X | |
| |Payments made in | | | |
| |Settlement of Payment | | | |
| |Card and Third-Party | | | |
| |Network Transactions | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 3092 |Gain from Sale of | 185 | X | |
| |Principal Residence | | | |
| |Allocated to Nonqualified | | | |
| |Use Not Excluded from | | | |
SBx8 32 - Wolk
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| |Income | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| |
| |
| Table 5 - Hubbard Act of 2008 (PL 110-317) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| Act |Provisions | | Conform | Not |
|Section | | | | Conform |
| | | | | |
|--------+------------------------+-----------+-----------+---------|
| 9 |Repeal of Dollar | 194 | X | |
| |Limitation on | | | |
| |Contributions to | | | |
| |Funeral Trusts | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| |
SBx8 32 - Wolk
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| |
| Table 6 - Emergency Economic Stabilization Act of 2008 (EESA)(PL |
| 110-343) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | | FTB's | Decision |
| | | 2008 | |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
------------------------------------------------------------------
| Act |Provisions | | Conform | Not |
|Section | | | | Conform |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division A, Title III - Tax Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 301 |Gain or Loss from Sale | 195 | | X |
| |or Exchange of Certain | | | |
| |Preferred Stock | | | |
| | | | | |
------------------------------------------------------------------
| 302 |Special Rules for Tax | 198 | X | |
| |Treatment of Executive | | | |
| |Compensation of | | | |
| |Employers Participating | | | |
| |in the Troubled Assets | | | |
| |Relief Program | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 303 |Extension of Exclusion | 208 | X (With | |
| |of Income from | |Modificatio| |
| |Discharge of Qualified | | n to | |
| |Principal Residence | | Extension | |
SBx8 32 - Wolk
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| |Indebtedness | | of | |
| | | | Mortgage | |
| | | | Debt | |
| | | |Forgiveness| |
| | | | ) | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division B, Title I, Subtitle B - Carbon Mitigation and Coal |
|Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 116 |Certain Income and | 243 | X | |
| |Gains Relating to | | | |
| |Industrial Source | | | |
| |Carbon Dioxide Treated | | | |
| |as Qualifying Income | | | |
| |for Publicly Traded | | | |
| |Partnerships | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division B, Title II - Energy Production Incentives |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 201 |Inclusion of Cellulosic | 245 | | X |
| |Biofuel in Bonus | | | |
| |Depreciation for | | | |
| |Biomass Ethanol Plant | | | |
| |Property | | | |
| | | | | |
------------------------------------------------------------------
| 208 |Certain Income and | 266 | X | |
| |Gains Relating to | | | |
| |Alcohol Fuels and | | | |
| |Mixtures, Biodiesel | | | |
| |Fuels and Mixtures, and | | | |
| |Alternative Fuels and | | | |
| |Mixtures Treated as | | | |
| |Qualifying Income for | | | |
| |Publicly Traded | | | |
SBx8 32 - Wolk
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| |Partnerships | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 209 |Extension and | 268 | | X |
| |Modification of | | | |
| |Election to Expense | | | |
| |Certain Refineries | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division B, Title III - Energy Conservation and Efficiency |
|Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 303 |Energy Efficient | 281 | | X |
| |Commercial Buildings | | | |
| |Deduction | | | |
| | | | | |
------------------------------------------------------------------
| 306 |Accelerated Recovery | 289 | PIT | CORP |
| |Period for Depreciation | | | |
| |of Smart Meters and | | | |
| |Smart Grid Systems | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 308 |Special Depreciation | 293 | | X |
| |Allowance for Certain | | | |
| |Reuse and Recycling | | | |
| |Property | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title II - Extension of Individual Tax Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 204 |Additional Standard | 323 | | X |
| |Deduction for Real | | | |
| |Property Taxes for | | | |
| |Nonitemizers | | | |
| | | | | |
SBx8 32 - Wolk
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------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title III - Extension of Business Tax Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 301 |Extension and | 335 | | X |
| |Modification of | | | |
| | | | | |
| |Research Credit | | | |
| | | | | |
------------------------------------------------------------------
| 305 |Extension of 15-Year | 350 | | X |
| |Straight-Line Cost | | | |
| |Recovery for Qualified | | | |
| |Leasehold Improvements | | | |
| |and Qualified | | | |
| |Restaurant | | | |
| |Improvements; 15-Year | | | |
| |Straight Line | | | |
| | | | | |
| |Cost Recovery for | | | |
| |Certain Improvements | | | |
| | | | | |
| |to Retail Space | | | |
| | | | | |
------------------------------------------------------------------
| 306 |Modification of Tax | 354 | X | |
| |Treatment of Certain | | | |
| |Payments to Controlling | | | |
| |Exempt Organizations | | | |
| | | | | |
------------------------------------------------------------------
| 307 |Basis Adjustment to | 356 | X | |
| |Stock of S Corporations | | | |
| |Making Charitable | | | |
| |Contributions of | | | |
| |Property | | | |
| | | | | |
------------------------------------------------------------------
| 311 |Extension of Election | 363 | | X |
| |to Expense Advanced | | | |
SBx8 32 - Wolk
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| |Safety Mine Equipment | | | |
| | | | | |
------------------------------------------------------------------
| 317 |Seven-Year Cost | 376 | | X |
| |Recovery Period for | | | |
| |Motorsports Racing | | | |
| |Track Facility | | | |
| | | | | |
------------------------------------------------------------------
| 323 |Enhanced Charitable | 386 | | X |
| |Deductions for | | | |
| |Contributions of Food | | | |
| |Inventory | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 324 |Extension of Enhanced | 388 | | X |
| |Charitable Deduction | | | |
| |for Contributions of | | | |
| |Book Inventory | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title IV - Extension of Tax Administration |
|Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 402 |Permanent Authority for | 392 | | X |
| |Disclosure of | | | |
| |Information Relating to | | | |
| |Terrorists Activities | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title V, Subtitle A - General Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 505 |Certain Farming | 401 | | X |
| |Business Machinery and | | | |
| |Equipment Treated as | | | |
| |5-Year Property | | | |
SBx8 32 - Wolk
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| | | | | |
|--------+------------------------+----------+-----------+---------|
| 506 |Modification of Penalty | 403 | X (With | |
| |on Understatement of | |Modificatio| |
| |Taxpayer's Liability by | | ns) | |
| |Tax Return Preparer | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title VII, Subtitle A - Heartland and Hurricane |
|Ike Disaster Relief |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 703 |Reporting Requirements | 409 | X | |
| |Relating to Disaster | | | |
| |Relief Contributions | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title VII, Subtitle B - National Disaster Relief |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 706 |Losses Attributable to | 411 | | X |
| |Federally Declared | | | |
| |Disasters | | | |
| | | | | |
------------------------------------------------------------------
| 707 |Expensing of Qualified | 413 | | X |
| |Disaster Expenses | | | |
| | | | | |
------------------------------------------------------------------
| 708 |Net Operating Losses | 417 | | X |
| |Attributable to | | | |
| |Federally Declared | | | |
| |Disasters | | | |
| | | | | |
------------------------------------------------------------------
| 710 |Special Depreciation | 425 | | X |
| |Allowance for Qualified | | | |
| |Disaster Property | | | |
SBx8 32 - Wolk
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| | | | | |
|--------+------------------------+----------+-----------+---------|
| 711 |Increased Expensing for | 429 | | X |
| |Qualified Disaster | | | |
| |Assistance Property | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title VIII - Spending Reductions and Appropriate |
|Revenue Raisers for New Tax Policy Relief |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 801 |Nonqualified Deferred | 431 | | X |
| |Compensation from | | | |
| |Certain Tax Indifferent | | | |
| |Parties | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
| |
| |
| Table 7 - Worker, Retiree, and Employer Recovery Act of 2008 |
| (WRERA)(PL 110-458) |
| |
| |
| |
-------------------------------------------------------------------
|--------+------------------------+----------+-----------+---------|
| | | FTB's | Decision | |
| | | 2008 | | |
| | | Annual | | |
| | | Report | | |
| | | Page No. | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
SBx8 32 - Wolk
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| Act |Provisions | | Conform | Not |
|Section | | | | Conform |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 124 |Treatment of Certain | 457 | X | |
| |Reimbursements from | | | |
| |Governmental Plans for | | | |
| |Medical Care | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 127 |Modification of Penalty | 462 | X | |
| |for Failure to File | | (20% of | |
| |Partnership Returns | | the | |
| | | | federal | |
| | | | penalty) | |
|--------+------------------------+----------+-----------+---------|
| 128 |Modification of Penalty | 464 | X | |
| |for Failure to File S | | (20% of | |
| |Corporation Returns | | the | |
| | | | federal | |
| | | | penalty) | |
------------------------------------------------------------------
FISCAL EFFECT:
According to the Franchise Tax Board (FTB), SBX8 32 has the
below revenue effect:
-------------------------------------------------------------
| Summary Revenue Estimates |
| |
| Please note estimates have not been revised if original |
| estimate is less than $1,000,000 |
| |
-------------------------------------------------------------
|---------------------+----------+----------+---------+---------|
SBx8 32 - Wolk
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|Conformity | 2009-10 | 2010-11 | 2011-12 | 2012-13 |
|Provisions | | | | |
| | | | | |
|---------------------+----------+----------+---------+---------|
|Tax Revenue Totals |-$23,400,0|-$20,623,0|-$21,610,|-$12,460,|
| | 0 | 00 | 000 | 000 |
| | | | | |
|---------------------+----------+----------+---------+---------|
|Penalty and Interest |$2,870,000|$9,800,000|$13,600,0|$16,350,0|
|Totals | | | 0 | 00 |
| | | | | |
|---------------------+----------+----------+---------+---------|
|Totals of Conformity |-$20,530,0|-$10,823,0|-$8,010,0|$3,890,00|
|Provisions | 00 | 00 | 00 |0 |
| | | | | |
| | | | | |
| | | | | |
---------------------------------------------------------------
COMMENTS:
A. Purpose of the Bill
According to the author's office, "SBx8 32 is a vital
measure conforming state tax law to federal tax, and
includes provisions that provide needed relief to
struggling homeowners, ensure that renewable energy
projects are not unduly taxed on federal grants, and
provides needed conformity to federal tax law, easing tax
preparation for taxpayers and tax preparers alike.
This measure works to prevent onerous taxation of
distressed Californians who are already struggling to
protect their homes, their largest investment, as many
Californians face foreclosure and are forced to walk away
from their homes, the last thing they should have to think
about is paying taxes on debt they couldn't repay. This
measure puts an end to this onerous application of tax law
SBx8 32 - Wolk
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Additionally, since tax credits are never considered
income, taxing renewable energy production grants would
treat the renewable energy production industry inequitably
and would add additional costs onto these projects need for
job creation and energy sustainability. It is important
that we avoid this kind of unnecessary roadblock to
economic growth as our state works to rebuild its financial
prosperity."
B. Don't Look Back in Anger
California's repeated, unsuccessful efforts to conform
state tax law to federal tax law are a testament to the
underlying political, policy, and fiscal difficulty of
federal tax conformity. California last conformed to
changes in federal law in 2005 (AB 115, Klehs). Since
then, the Legislature has not conformed state tax law to
federal law for several reasons.
First, conforming state law to federal changes may
result in significant costs to the state, and unlike the
Federal government, California cannot neither print nor
access the treasury bill market to subsidize its budget,
with estimates showing that the U.S. Treasury will have to
borrow for approximately one-third of total federal outlays
in the next fiscal year. Therefore, the Legislature must
ostensibly make tradeoffs when considering conformity to
federal tax laws which do not trigger significant fiscal
concerns in Congress. In other instances, certain federal
changes have undesirable policy outcomes which the state
tax code should not encourage, such as conformity to
federal tax treatment of Health Savings Accounts.
Legislative vote thresholds proved to be the undoing of the
conformity bill two years ago, when it resulted in a net
tax increase, triggering the 2/3 vote requirement, and the
measure did not advance from the Senate Floor because it
failed to secure 27 Senate votes (AB 1561, Calderon). Last
year, the Legislature approved AB 1580, which the Governor
vetoed due to the so-called "single provision inserted at
SBx8 32 - Wolk
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the last minute" which he could not support until it
"reflected consensus."
The Legislature continues to struggle with tax
conformity, despite frequent and loud calls from tax
practitioners, who find preparing returns and dispensing
advice more and more complex as federal and state tax laws
drift further apart over time. SBX8 32 is the most recent
attempt to ease the hardship on taxpayers and practitioners
by bringing the two tax codes closer together.
C. The Bone of Contention
At the urging of the United States Treasury under
former President George W. Bush, Congress provided that on
and after May 25, 2007, taxpayers filing an erroneous claim
for refund may face a penalty equal to 20% of the
disallowed amount of the claim, unless the taxpayer shows a
reasonable basis for the refund, as defined by Treasury
Regulation Section 1.6662-3(b) (3). The federal penalty
does not apply to any refund claimed due to the Earned
Income Tax Credit.
The penalty is intended to ensure that taxpayers
simply do not file conservative original returns to avoid
understatement penalties, such as the accuracy related
penalty (20% of a disclosed understatement lacking
reasonable basis) and the corporate understatement penalty
(20% of understatements exceeding one million dollars),
only to file more aggressive amended returns seeking
refunds. In that case, FTB has no legal ability to apply a
penalty except in very limited circumstances, and can only
deny a refund claim when detected during an audit, leaving
taxpayers little incentive not to play the "audit lottery"
and file the most aggressive refund claims possible. Since
2007, taxpayers have been subject to the penalty for
federal income taxes, but not for California returns.
Two years ago, when the Committee approved AB 1561, it
included conformity to this penalty. Soon after, the
SBx8 32 - Wolk
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Author deleted the item. Last year, AB 1580's author
inserted a provision conforming to the penalty on August
18, 2009; the Governor referenced this penalty in his veto
message. This bill also conforms state law to this
penalty, known as the "erroneous claims for refund
penalty." The bill also provides that the penalty does not
apply to individuals with income of less than $250,000
(single/married filing joint) or $125,000 (married filing
separate), or on which the accuracy-related or fraud
penalties are charged.
A consistent theme in the California tax world is that
measures that enact penalties always result in
significantly more revenue than expected, such as tax
amnesty, the voluntary compliance initiative for abusive
tax shelters, and the corporate understatement penalty,
which yielded $2.7 billion despite an initial estimate of
just over $1 billion, indicating significant taxpayer
non-compliance. With taxpayers petitioning FTB for
hundreds of millions of dollars in refund claims each year,
failing to conform to this item may encourage California
taxpayers to continue to make tenuous refund claims.
D. Forgive and Forget?
Two years ago, the Legislature approved SB 1055
(Machado), which provided modified conformity to the
Mortgage Forgiveness Debt Relief Act (MFDRA) for discharge
of mortgage indebtedness in the 2007 and 2008 tax years.
Last year, the Committee held SB 97 (Calderon) which
extended modified conformity to discharge of mortgage
indebtedness in the 2009 and 2010 tax years, and the
Assembly Revenue and Taxation Committee held AB 111
(Niello), which provided full conformity to MFDRA. Last
year, the Committee increased the limits from $125,000
(married filing separate)/$250,000 (single, married filing
joint) to $250,000 (married filing separate)/$500,000
(single, married filing joint), when it approved AB 1580.
However, due to the Governor's veto, taxpayers must include
cancelled mortgage debt as income on their 2009 tax
SBx8 32 - Wolk
Page 16
returns, requiring taxpayers to pay significantly more tax.
Nonconformity to this item is particularly cruel because
homeowners who must give up their homes in a short sale
often leave the transaction with nothing, not to mention
the disconnect between state law from federal law. SBx8 32
contains identical mortgage debt conformity provisions as
AB 1580, tying California law to federal until 2013, and
additionally provides retroactive application for taxpayers
with cancellation of debt income arising from mortgage debt
forgiveness until the 2012 tax year.
E. Renewable Grants
Federal law allows an income tax credit for the
production of electricity from qualified energy resources
at qualified facilities. In February, Congress enacted and
the President signed the American Recovery and Reinvestment
Act, which authorizes the Secretary of Treasury to provide
a grant to each person who places in service during 2009 or
2010 energy property that is either (1) an electricity
production facility otherwise eligible for the renewable
electricity production credit or (2) qualifying property
otherwise eligible for the energy credit. Additionally,
Congress excluded the grant proceeds from a taxpayer's
federal income. However, the basis of the property is
reduced by fifty percent of the amount of the grant. In
addition, some or all of each grant is subject to recapture
if the grant eligible property is disposed of by the grant
recipient within five years of being placed in service.
The provision also permits taxpayers to claim the credit
with respect to otherwise eligible property that is not
placed in service in 2009 and 2010 so long as construction
begins in either of those years and is completed prior to
2013 (in the case of wind facility property), 2014 (in the
case of other renewable power facility property eligible
for credit under IRC section 45), or 2017 (in the case of
any specified energy property described in IRC section 48).
Under the provision, if a grant is paid, no renewable
SBx8 32 - Wolk
Page 16
electricity credit or energy credit may be claimed with
respect to the grant eligible property. However, in
absence of an authorized statute, taxpayers must include
the grant proceeds as income for state purposes. SBx8 32
excludes these grants from income because an unexpected tax
could cause project developers to terminate or delay the
projects, causing job losses and less renewable power for
the state. SBx8 32 additionally conforms to federal law by
excluding these grants from state income and requiring the
50% basis adjustment.
F. Technical Amendments
FTB suggest technical amendments to SBx8 32. However,
if the Committee approves the bill today, the Senate
Appropriations Committee must hear the measure tomorrow, so
the proposed amendments will be adopted in that committee.
Support and Opposition
Support:
Oppose:California Bankers Association, California
Chamber of Commerce, California Taxpayers' Association,
California Manufacturers and Technology Association, Tech
America, Western States Petroleum Association
---------------------------------
Consultant: Colin Grinnell
SBx8 32 - Wolk
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