BILL NUMBER: SB 357 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 4, 2011
INTRODUCED BY Senator Dutton
FEBRUARY 15, 2011
An act to add Section 11343.10 to the Government Code,
and to add Sections 17053.91 and 23649.1 to the Revenue and Taxation
Code, relating to taxation. An act to add Section
11346.47 to the Government Code, relating to regulations .
LEGISLATIVE COUNSEL'S DIGEST
SB 357, as amended, Dutton. Personal and corporate income
tax: tax credit: depreciable property. Regulations:
obsolete equipment.
The Administrative Procedure Act governs the procedure for the
adoption, amendment, or repeal of regulations by state agencies and
for the review of those regulatory actions by the Office of
Administrative Law. The act requires that an agency identify, in the
notice of proposed action for a regulation, an estimate, prepared in
accordance with instructions adopted by the Department of Finance, of
the cost or savings to a state agency.
This bill would additionally require an agency to estimate the
cost to the state in revenues that are lost as a result of a
regulation that would make equipment obsolete, where that equipment
would otherwise have a remaining depreciable life. The bill would
require the Franchise Tax Board to provide to each state agency, and
update every 5 years, the average tax rate to be applied to the
amount of the estimated accelerated deduction due to reduced asset
life attributable to the regulation for an increase in business
depreciation.
The Personal Income Tax Law and the Corporation Tax Law authorize
various deductions in computing the income that is subject to the
taxes imposed by those laws, and authorizes credits against the taxes
imposed by those laws. Existing law authorizes a taxpayer to deduct
from income any remaining depreciation amount whenever depreciable
property becomes obsolete, including as the result of regulatory or
legislative action.
This bill would allow a refundable credit in the amount equal to
the depreciation deduction a taxpayer would otherwise be entitled
should a state agency regulation render depreciable property
obsolete. This bill would condition payment of any refundable portion
of the credit upon a future appropriation by the Legislature, and
prohibit the state agency regulation regarding depreciable property
from taking effect until such appropriation is made, as provided.
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 11346.47 is added to the
Government Code , to read:
11346.47. (a) For purposes of the estimate of costs and savings
to a state agency reported pursuant to paragraph (6) of subdivision
(a) of Section 11346.5, and in addition to information required by
the Department of Finance pursuant to Section 11357, the agency's
estimate shall include an estimate of the cost to the state in
revenues that are lost as a result of a regulation that makes
equipment obsolete, where that equipment would otherwise have a
remaining depreciable life.
(b) For purposes of this section, the Franchise Tax Board shall
provide to each state agency, and update every five years, the
average tax rate to be applied to the amount of the estimated
accelerated deduction due to reduced asset life attributable to the
regulation for an increase in business depreciation.
SECTION 1. Section 11343.10 is added to the
Government Code, to read:
11343.10. (a) A state agency shall not promulgate any new
regulation that would render tangible property obsolete unless an
appropriation has been made for a tax credit pursuant to Sections
17053.91 and 23649.1 of the Revenue and Taxation Code.
(b) For purposes of this section, "tangible property" means
property described in Section 167(a) of the Internal Revenue Code.
SEC. 2. Section 17053.91 is added to the
Revenue and Taxation Code, to read:
17053.91. (a) There shall be allowed as a credit against the "net
tax," as defined in Section 17039, an amount equal to the
depreciation deduction for the taxable year to which a taxpayer would
have otherwise been entitled under this part had a state agency not
promulgated a regulation, described in Section 11343.10 of the
Government Code, that rendered the tangible property obsolete.
(b) For purposes of this section, "tangible property" means
property described in Section 167(a) of the Internal Revenue Code.
(c) In the case of a taxpayer whose credit provided under this
section exceeds the taxpayer's tax liability computed under this
part, the excess shall be credited against other amounts due, if any,
from the taxpayer and the balance, if any, shall, upon appropriation
by the Legislature, be refunded to the taxpayer.
SEC. 3. Section 23649.1 is added to the Revenue
and Taxation Code, to read:
23649.1. (a) There shall be allowed as a credit against the "net
tax," as defined in Section 23036, an amount equal to the
depreciation deduction for the taxable year to which a taxpayer would
have otherwise been entitled under this part had a state agency not
promulgated a regulation, described in Section 11343.10 of the
Government Code, that rendered the tangible property obsolete.
(b) For purposes of this section, "tangible property" means
property described in Section 167(a) of the Internal Revenue Code.
(c) In the case of a taxpayer whose credit provided under this
section exceeds the taxpayer's tax liability computed under this
part, the excess shall be credited against other amounts due, if any,
from the taxpayer and the balance, if any, shall, upon appropriation
by the Legislature, be refunded to the taxpayer.