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,begin insert and before January 1, 2020,end insert a tax credit under both laws in an amount equal to 30% of the qualified costs paid or incurred by a qualified taxpayer for any seismic retrofit construction on a qualified building, as defined. This bill would require a taxpayer to obtain a certification from the appropriate jurisdiction with authority for building code enforcement 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 17052.9 is added to the Revenue and
2Taxation Code, to read:
(a) Forbegin insert eachend insert taxablebegin delete yearsend deletebegin insert yearend insert beginning on or after
4January 1, 2015,begin insert and before January 1, 2020,end insert there shall be allowed
5to a qualified taxpayer a credit against the “net tax,” as defined in
6Section 17039, in an amount equal to 30 percent of the qualified
7taxpayer’s qualified costs.
8(b) For purposes of this section:
9(1) “At-risk property” means a building that is deemed
10hazardous and in danger of collapse in the event of a catastrophic
11earthquake, including, but not limited to, soft story buildings,
12nonductile concrete residential buildings, andbegin delete pre-1980end deletebegin insert pre-1994end insert
13 concrete residential buildings.
14(2) “Qualified building” means a building that has been certified
15as an at-risk property by the local housing authority for the area
16within which the building is located.
17(3) “Qualified costs” means the costs paid or incurred by the
18begin insert
qualifiedend insert taxpayer for any seismic retrofit construction on a
19qualified buildingbegin insert, including any engineering or architectural work
20preceding the constructionend insert. “Qualified costs”begin delete shallend deletebegin insert doesend insert not include
21begin delete ordinaryend deletebegin insert either of the following:end insert
22begin insert (A)end insertbegin insert end insertbegin insertThe costs
paid or incurred by the qualified taxpayer for
23ordinaryend insert repair or replacement of existing fixtures or items on or
24in the qualified building.
25(B) Any amount paid by the qualified taxpayer to the jurisdiction
26with authority for building code enforcement for issuing the
27certification required pursuant to subparagraph (A) of paragraph
28(1) of subdivision (c).
29(4) “Qualified taxpayer” means a taxpayer that is an owner of
30a qualified building located in this state. A taxpayer that owns a
31proportional share of a qualified building in this state may claim
32the credit allowed by this section based on the taxpayer’s share of
33the qualified costs.
P3 1(5) (A) “Seismic retrofit construction” means changes or
2additions to the structure of a qualified building to mitigate seismic
3damage, including:
4(i) Anchoring the structure to the foundation.
5(ii) Bracing cripple walls.
6(iii) Bracing hot water heaters.
7(iv) Installing automatic gas shutoff valves.
8(v) Repairing or reinforcing the foundation to improve the
9integrity of the foundation against seismic damage.
10(vi) Anchoring fuel storage.
11(vii) Installing an earthquake-resistant bracing system for
12mobilehomes that is certified by the California Department of
13Housing and Community Development.
14(B) “Seismic retrofit construction” does not include construction
15activities performedbegin delete solelyend delete to bring a qualified building into
16compliance with standard local building codes.
17(c) To be eligible for the credit under this section, the following
18must apply:
19(1) The qualified taxpayer shall do both of the following:
20(A) Obtain certification from the appropriate jurisdiction with
21authority for building code enforcement, upon a
review of the
22building, that the building is an at-risk property. Upon the request
23of the Franchise Tax Board, the qualified taxpayer shall provide
24a copy of the certification to the Franchise Tax Board.
25(B) Retain for his or her records a copy of the certification
26specified in subparagraph (A).
27(2) The jurisdiction with authority for building code enforcement
28in which a qualified building is located has entered into an
29agreement with the state to provide certifications pursuant to this
30section and to not seek reimbursement pursuant to Section 6 of
31Article XIII B of the California Constitution for any costs incurred
32in providing those certifications.
33(d) (1) The credit amount
allowed in subdivision (a) shall be
34claimed by a qualified taxpayer at the rate of one-fifth of the credit
35amount for the taxable year in which the credit is allocated, and
36one-fifth of the credit amount for each of the subsequent four
37taxable years.
38(2) In the case where the credit allowed under this section
39exceeds the “net tax,” as defined in Section 17039, for a taxable
40year, the excess credit may be carried over to reduce the “net tax”
P4 1in the following taxable year, and succeeding four taxable years,
2if necessary, until the credit has been exhausted.
3(e) For purposes of computing the credit provided by this
4section, the qualified costs shall be reduced by any grant provided
5by a public entity for the seismic retrofit construction.
6(f) This credit shall be in lieu of any other credit or deduction
7that the qualified taxpayer may otherwise claim pursuant to this
8part with respect to qualified costs.
9(g) This section shall remain in effect only until December 1,
102020, and as of that date is repealed.
Section 23605 is added to the Revenue and Taxation
12Code, to read:
(a) For taxable years beginning on or after January 1,
142015,begin insert and before January 1, 2020,end insert there shall be allowed to a
15qualified taxpayer a credit against the “tax,” as defined in Section
1623036, in an amount equal to 30 percent of the qualified taxpayer’s
17qualified costs.
18(b) For purposes of this section:
19(1) “At-risk property” means a building that is deemed
20hazardous and in danger of collapse in the event of a catastrophic
21earthquake, including, but not limited to, soft story buildings,
22nonductile concrete residential
buildings, andbegin delete pre-1980end deletebegin insert pre-1994end insert
23 concrete residential buildings.
24(2) “Qualified building” means a building that has been certified
25as an at-risk property by the local housing authority for the area
26within which the building is located.
27(3) “Qualified costs” means the costs paid or incurred by the
28begin insert qualifiedend insert taxpayer for any seismic retrofit construction on a
29qualified buildingbegin insert, including any engineering or architectural work
30preceding the constructionend insert.
“Qualified costs”begin delete shallend deletebegin insert doesend insert not include
31begin delete ordinaryend deletebegin insert either of the following:end insert
32begin insert (A)end insertbegin insert end insertbegin insertThe costs paid or incurred by the qualified taxpayer for
33ordinaryend insert repair or replacement of existing fixtures or items on or
34in the qualified building.
35(B) Any amount paid by the qualified taxpayer to the jurisdiction
36with authority for building code enforcement for issuing the
37certification required pursuant to subparagraph (A) of paragraph
38(1) of subdivision (c).
39(4) “Qualified taxpayer” means a taxpayer that is an owner of
40a qualified building located in this state. A taxpayer that owns a
P5 1proportional share of a qualified building in this state may claim
2the credit allowed by this section based on the taxpayer’s share of
3the qualified costs.
4(5) (A) “Seismic retrofit construction” means changes or
5additions to the structure of a qualified building to mitigate seismic
6damage, including:
7(i) Anchoring the structure to the foundation.
8(ii) Bracing cripple walls.
9(iii) Bracing hot water heaters.
10(iv) Installing automatic gas shutoff valves.
11(v) Repairing or reinforcing the foundation to improve the
12integrity of the foundation against seismic damage.
13(vi) Anchoring fuel storage.
14(vii) Installing an earthquake-resistant bracing system for
15mobilehomes that is certified by the California Department of
16Housing and Community Development.
17(B) “Seismic retrofit construction” does
not include construction
18activities performedbegin delete solelyend delete to bring a qualified building into
19compliance with standard local building codes.
20(c) To be eligible for the credit under this section, the following
21must apply:
22(1) The qualified taxpayer shall do both of the following:
23(A) Obtain certification from the appropriate jurisdiction with
24authority for building code enforcement, upon a review of the
25building, that the building is an at-risk property. Upon the request
26of the Franchise Tax Board, the qualified taxpayer shall provide
27a copy of the certification to the Franchise Tax Board.
28(B) Retain for his or her records a copy of the certification
29specified in subparagraph (A).
30(2) The jurisdiction with authority for building code enforcement
31in which a qualified building is located has entered into an
32agreement with the state to provide certifications pursuant to this
33section and to not seek reimbursement pursuant to Section 6 of
34Article XIII B of the California Constitution for any costs incurred
35in providing those certifications.
36(d) (1) The credit amount allowed in subdivision (a) shall be
37claimed by a qualified taxpayer at the rate of one-fifth of the credit
38amount for the taxable year in which the credit is allocated, and
39one-fifth of the credit amount for each of the subsequent four
40taxable years.
P6 1(2) In the case where the credit allowed under this section
2exceeds the “tax,” as defined in Section 23036, for a taxable year,
3the excess credit may be carried over to reduce the “tax” in the
4following taxable year, and succeeding four taxable years, if
5necessary, until the credit has been exhausted.
6(e) For purposes of computing the credit provided by this
7section, the qualified costs shall be reduced by any grant provided
8by a public entity for the seismic retrofit construction.
9(f) This credit shall be in lieu of any other credit or deduction
10that the qualified taxpayer may otherwise claim pursuant to this
11part with respect to qualified costs.
12(g) This section shall remain in effect only until December 1,
132020, and as of that date is repealed.
This act provides for a tax levy within the meaning of
15Article IV of the Constitution and shall go into immediate effect.
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