Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1510

Introduced by Assembly Member Nazarian

January 14, 2014

An act begin delete relating to local government. end delete begin insert to add Sections 17052.9 and 23605 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1510, as amended, Nazarian. begin delete Local government: at-risk properties: retrofit: lowered assessment values. end delete begin insert Income taxes credit: seismic retrofits. end insert

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The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.

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This bill would allow, for taxable years beginning on or after January 1, 2015, a tax credit under both laws in an amount equal to 30% of the qualified costs paid or incurred by a qualified taxpayer for the seismic retrofit of a qualified building, as defined. This bill would require a taxpayer to obtain a certification from the local housing authority of the area in which the building is located that the building is an at-risk property, as defined, and to provide that certification to the Franchise Tax Board upon the request of the Franchise Tax Board.

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This bill would take effect immediately as a tax levy.

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Existing law authorizes an owner of any qualified historical property, as defined, to contract with the legislative body of a city, county, or city and county, to restrict the use of the property in exchange for lowered assessment values.

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This bill would state the intent of the Legislature to enact similar legislation that authorizes an owner of any at-risk property to contract with the legislative body of a city, county, or city and county, to retrofit the at-risk property in exchange for lowered assessment values.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 17052.9 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

begin insert

begin insert 17052.9. end insert   

(a) For taxable years beginning on or after January
1, 2015, there shall be allowed to a qualified taxpayer a credit
against the “net tax,” as defined in Section 17039, in an amount
equal to 30 percent of the qualified taxpayer’s qualified costs.

(b) For purposes of this section:

(1) “At-risk property” means a building that is deemed
hazardous and in danger of collapse in the event of a major
earthquake, including, but not limited to, soft story buildings,
nonductile concrete residential buildings, and pre-1980 concrete
residential buildings.

(2) “Local housing authority” means a housing authority
created pursuant to Chapter 1 (commencing with Section 34200)
of Part 2 of Division 24 of the Health and Safety Code.

(3) “Qualified building” means a building that has been
certified as an at-risk property by the local housing authority for
the area within which the building is located.

(4) “Qualified costs” means the costs paid or incurred by the
taxpayer for the seismic retrofit of a qualified building. “Qualified
costs” shall not include ordinary repair or replacement of existing
fixtures or items on or in the qualified building.

(5) “Qualified taxpayer” means a taxpayer that is an owner of
a qualified building located in this state. A taxpayer that owns a
proportional share of a qualified building in this state may claim
the credit allowed by this section based on the taxpayer’s share
of the qualified costs.

(c) To be eligible for the credit under this section, the following
must apply:

(1) The qualified taxpayer shall obtain certification from the
appropriate local housing authority, upon a review of the building,
that the building is an at-risk property. Upon the request of the
Franchise Tax Board, the qualified taxpayer shall provide a copy
of the certification to the Franchise Tax Board.

(2) The local housing authority in which a qualified building is
located has entered into an agreement with the state to provide
certifications pursuant to this section and to not seek
reimbursement pursuant to Section 6 of Article XIII B of the
California Constitution for any costs incurred in providing those
certifications.

(d) (1) The credit amount allowed in subdivision (a) shall be
claimed by a qualified taxpayer at the rate of one-fifth of the credit
amount for the taxable year in which the credit is allocated, and
one-fifth of the credit amount for each of the subsequent four
taxable years.

(2) In the case where the credit allowed under this section
exceeds the “net tax,” as defined in Section 17039, for a taxable
year, the excess credit may be carried over to reduce the “net tax”
in the following taxable year, and succeeding four taxable years,
if necessary, until the credit has been exhausted.

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begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 23605 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 23605. end insert   

(a) For taxable years beginning on or after January
1, 2015, there shall be allowed to a qualified taxpayer a credit
against the “tax,” as defined in Section 23036, in an amount equal
to 30 percent of the qualified taxpayer’s qualified costs.

(b) For purposes of this section:

(1) “At-risk property” means a building that is deemed
hazardous and in danger of collapse in the event of a major
earthquake, including, but not limited to, soft story buildings,
nonductile concrete residential buildings, and pre-1980 concrete
residential buildings.

(2) “Local housing authority” means a housing authority
created pursuant to Chapter 1 (commencing with Section 34200)
of Part 2 of Division 24 of the Health and Safety Code.

(3) “Qualified building” means a building that has been
certified as an at-risk property by the local housing authority for
the area within which the building is located.

(4) “Qualified costs” means the costs paid or incurred by the
taxpayer for the seismic retrofit of a qualified building. “Qualified
costs” shall not include ordinary repair or replacement of existing
fixtures or items on or in the qualified building.

(5) “Qualified taxpayer” means a taxpayer that is an owner of
a qualified building located in this state. A taxpayer that owns a
proportional share of a qualified building in this state may claim
the credit allowed by this section based on the taxpayer’s share
of the qualified costs.

(c) To be eligible for the credit under this section, the following
must apply:

(1) The qualified taxpayer shall obtain certification from the
appropriate local housing authority, upon a review of the building,
that the building is an at-risk property. Upon the request of the
Franchise Tax Board, the qualified taxpayer shall provide a copy
of the certification to the Franchise Tax Board.

(2) The local housing authority in which a qualified building is
located has entered into an agreement with the state to provide
certifications pursuant to this section and to not seek
reimbursement pursuant to Section 6 of Article XIII B of the
California Constitution for any costs incurred in providing those
certifications.

(d) (1) The credit amount allowed in subdivision (a) shall be
claimed by a qualified taxpayer at the rate of one-fifth of the credit
amount for the taxable year in which the credit is allocated, and
one-fifth of the credit amount for each of the subsequent four
taxable years.

(2) In the case where the credit allowed under this section
exceeds the “tax,” as defined in Section 23036, for a taxable year,
the excess credit may be carried over to reduce the “tax” in the
following taxable year, and succeeding four taxable years, if
necessary, until the credit has been exhausted.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

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SECTION 1.  

It is the intent of the Legislature to enact
legislation that authorizes an owner of any at-risk property to
contract with the legislative body of a city, county, or city and
county, to retrofit the at-risk property in exchange for lowered
assessment values.

end delete