Amended in Assembly May 1, 2014

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 to add Sections 17052.9 and 23605 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 1510, as amended, Nazarian. Income taxes credit: seismic retrofits.

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

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 begin delete the end delete begin insert any end insert seismic retrofit begin delete of end delete begin insert construction on end insert a qualified building, as defined. This bill would require a taxpayer to obtain a certification from the begin delete local housing authority end delete begin insert appropriate jurisdiction with authority for building code enforcement end insert 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.

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 17052.9 is added to the Revenue and
Taxation Code, to read:

17052.9.  

(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 begin delete major end delete
begin insert catastrophic end insert earthquake, including, but not limited to, soft story
buildings, nonductile concrete residential buildings, and pre-1980
concrete residential buildings.

begin delete

(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.

end delete begin delete

(3)

end delete

begin insert (2) end insert  “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.

begin delete

(4)

end delete

begin insert (3) end insert  “Qualified costs” means the costs paid or incurred by the
taxpayer for begin delete the end delete begin insert any end insert seismic retrofit begin delete of end delete begin insert construction on end insert a qualified
building. “Qualified costs” shall not include ordinary repair or
replacement of existing fixtures or items on or in the qualified
building.

begin delete

(5)

end delete

begin insert (4) end insert  “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.

begin insert

(5) (A) “Seismic retrofit construction” means changes or
additions to the structure of a qualified building to mitigate seismic
damage, including:

end insert begin insert

(i) Anchoring the structure to the foundation.

end insert begin insert

(ii) Bracing cripple walls.

end insert begin insert

(iii) Bracing hot water heaters.

end insert begin insert

(iv) Installing automatic gas shutoff valves.

end insert begin insert

(v) Repairing or reinforcing the foundation to improve the
integrity of the foundation against seismic damage.

end insert begin insert

(vi) Anchoring fuel storage.

end insert begin insert

(vii) Installing an earthquake-resistant bracing system for
mobilehomes that is certified by the California Department of
Housing and Community Development.

end insert begin insert

(B) “Seismic retrofit construction” does not include construction
activities performed solely to bring a qualified building into
compliance with standard local building codes.

end insert

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

(1) The qualified taxpayer shall begin delete obtain end delete begin insert do both of the following: end insert

begin insert (A) end insert begin insert   end insert begin insert Obtain end insert certification from the appropriate begin delete local housing
authority, end delete begin insert jurisdiction with authority for building code enforcement, end insert
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.

begin insert

(B) Retain for his or her records a copy of the certification
specified in subparagraph (A).

end insert

(2) The begin delete local housing authority end delete begin insert jurisdiction with authority for
building code enforcement end insert 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.

begin insert

(e) For purposes of computing the credit provided by this
section, the qualified costs shall be reduced by any grant provided
by a public entity for the seismic retrofit construction.

end insert

SEC. 2.  

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

23605.  

(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 begin delete major end delete
begin insert catastrophic end insert earthquake, including, but not limited to, soft story
buildings, nonductile concrete residential buildings, and pre-1980
concrete residential buildings.

begin delete

(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.

end delete begin delete

(3)

end delete

begin insert (2) end insert  “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.

begin delete

(4)

end delete

begin insert (3) end insert  “Qualified costs” means the costs paid or incurred by the
taxpayer for begin delete the end delete begin insert any end insert seismic retrofit begin delete of end delete begin insert construction on end insert a qualified
building. “Qualified costs” shall not include ordinary repair or
replacement of existing fixtures or items on or in the qualified
building.

begin delete

(5)

end delete

begin insert (4) end insert  “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.

begin insert

(5) (A) “Seismic retrofit construction” means changes or
additions to the structure of a qualified building to mitigate seismic
damage, including:

end insert begin insert

(i) Anchoring the structure to the foundation.

end insert begin insert

(ii) Bracing cripple walls.

end insert begin insert

(iii) Bracing hot water heaters.

end insert begin insert

(iv) Installing automatic gas shutoff valves.

end insert begin insert

(v) Repairing or reinforcing the foundation to improve the
integrity of the foundation against seismic damage.

end insert begin insert

(vi) Anchoring fuel storage.

end insert begin insert

(vii) Installing an earthquake-resistant bracing system for
mobilehomes that is certified by the California Department of
Housing and Community Development.

end insert begin insert

(B) “Seismic retrofit construction” does not include construction
activities performed solely to bring a qualified building into
compliance with standard local building codes.

end insert

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

(1) The qualified taxpayer shall begin delete obtain end delete begin insert do both of the following: end insert

begin insert (A) end insert begin insert   end insert begin insert Obtain end insert certification from the appropriate begin delete local housing
authority, end delete begin insert jurisdiction with authority for building code enforcement, end insert
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.

begin insert

(B) Retain for his or her records a copy of the certification
specified in subparagraph (A).

end insert

(2) The begin delete local housing authority end delete begin insert jurisdiction with authority for
building code enforcement end insert 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.

begin insert

(e) For purposes of computing the credit provided by this
section, the qualified costs shall be reduced by any grant provided
by a public entity for the seismic retrofit construction.

end insert

SEC. 3.  

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