Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 2537

Introduced by Assembly Member Grove

February 21, 2014

begin deleteAn act to amend Section 17015 of the Revenue and Taxation Code, relating to taxation. end deletebegin insertAn act to add Sections 17053.37 and 23637 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2537, as amended, Grove. begin deletePersonal income tax. end deletebegin insertIncome taxes: credits: water-conserving plumbing fixtures.end insert

begin insert

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

end insertbegin insert

This bill, for taxable years beginning on or after January 1, 2014, would allow a credit equal to 25% of the amount paid or incurred by a qualified taxpayer for the installation of one or more water-conserving plumbing fixtures to replace a noncompliant plumbing fixture on qualified real property in this state, as specified. The bill would provide that the credit would not exceed $2,500 per taxable year.

end insertbegin insert

This bill would take effect immediately as a tax levy.

end insertbegin delete

The Personal Income Tax Law defines a “nonresident” as every individual other than a resident.

end deletebegin delete

This bill would make a technical, nonsubstantive change to that provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

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

P2    1begin insert

begin insertSECTION 1.end insert  

end insertbegin insert

The Legislature finds and declares all of the
2following:

end insertbegin insert

3(a) There is a pressing need to address water supply reliability
4issues raised by growing urban and agricultural areas.

end insertbegin insert

5(b) There are many water conservation practices that produce
6significant energy and other resource savings that should be
7encouraged as a matter of state policy.

end insertbegin insert

8(c) California law requires, for all building alterations or
9improvements to a single-family residential property, a permit
10applicant to replace all noncompliant plumbing fixtures with
11water-conserving plumbing fixtures as a condition to be issued a
12certificate of final completion and occupancy or final permit
13approval by the local building department.

end insertbegin insert

14(d) California law also requires, by January 1, 2019, that all
15noncompliant plumbing fixtures in multifamily residential real
16property and commercial real property be replaced with
17water-conserving plumbing fixtures.

end insertbegin insert

18(e) In furtherance of the current and ongoing water conservation
19efforts throughout the state, it is the intent of this act to provide
20financial relief and incentives for qualified taxpayers replacing
21or installing water-conserving plumbing fixtures for residential
22and commercial real property.

end insert
23begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 17053.37 is added to the end insertbegin insertRevenue and Taxation
24Codeend insertbegin insert, to read:end insert

begin insert
25

begin insert17053.37.end insert  

(a) For each taxable year beginning on or after
26January 1, 2014, there shall be allowed as a credit against the
27“net tax,” as defined in Section 17039, an amount equal to 25
28percent of the amount paid or incurred during the taxable year by
29a qualified taxpayer for the installation of one or more
30water-conserving plumbing fixtures by a licensed plumber to
31replace a noncompliant plumbing fixture on qualified real property
32in this state.

33(b) The credit under this section shall not exceed two thousand
34five hundred dollars ($2,500) per taxable year per qualified
35taxpayer.

36(c) For the purposes of this section, the following definitions
37shall apply:

38(1) (A) “Qualified real property” means any of the following:

P3    1(i) Commercial real property.

2(ii) Multifamily residential real property.

3(iii) Single-family residential real property.

4(B) “Qualified real property” does not mean any real property
5for which water service is permanently disconnected.

6(2) “Commercial real property” means any real property that
7is improved with, or consisting of, a building that is intended for
8commercial use, including hotels and motels, that is not a
9single-family residential real property or a multifamily residential
10real property.

11(3) “Multifamily residential real property” means any real
12property that is improved with, or consisting of, a building
13containing more than one unit that is intended for human
14habitation, or any mixed residential-commercial buildings or
15portions thereof that are intended for human habitation.
16Multifamily residential real property includes residential hotels
17but does not include hotels and motels that are not residential
18hotels.

19(4) “Single-family residential real property” means any real
20property that is improved with, or consisting of, a building
21containing not more than one unit that is intended for human
22habitation.

23(5) “Noncompliant plumbing fixture” means any of the
24following:

25(A) Any toilet manufactured to use more than 1.6 gallons of
26water per flush.

27(B) Any urinal manufactured to use more than one gallon of
28water per flush.

29(C) Any showerhead manufactured to have a flow capacity of
30more than 2.5 gallons of water per minute.

31(D) Any interior faucet that emits more than 2.2 gallons of water
32per minute.

33(6) “Qualified taxpayer” means the owner of any qualified real
34property.

35(7) “Water-conserving plumbing fixture” means any fixture
36that is in compliance with current building standards applicable
37to a newly constructed real property of the same type.

38(d) The qualified taxpayer shall obtain a certification from a
39licensed plumber that the plumber installed a water-conserving
P4    1plumbing fixture to replace a noncompliant plumbing fixture on
2qualified real property in this state.

end insert
3begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 23637 is added to the end insertbegin insertRevenue and Taxation
4Codeend insertbegin insert, to read:end insert

begin insert
5

begin insert23637.end insert  

(a) For each taxable year beginning on or after
6January 1, 2014, there shall be allowed as a credit against the
7“tax,” as defined in Section 23036, an amount equal to 25 percent
8of the amount paid or incurred during the taxable year by a
9qualified taxpayer for the installation of one or more
10water-conserving plumbing fixtures by a licensed plumber to
11replace a noncompliant plumbing fixture on qualified real property
12in this state.

13(b) The credit under this section shall not exceed two thousand
14five hundred dollars ($2,500) per taxable year per qualified
15taxpayer.

16(c) For the purposes of this section, the following definitions
17shall apply:

18(1) (A) “Qualified real property” means any of the following:

19(i) Commercial real property.

20(ii) Multifamily residential real property.

21(iii) Single-family residential real property.

22(B) “Qualified real property” does not mean any real property
23for which water service is permanently disconnected.

24(2) “Commercial real property” means any real property that
25is improved with, or consisting of, a building that is intended for
26commercial use, including hotels and motels, that is not a
27single-family residential real property or a multifamily residential
28real property.

29(3) “Multifamily residential real property” means any real
30property that is improved with, or consisting of, a building
31containing more than one unit that is intended for human
32habitation, or any mixed residential-commercial buildings or
33portions thereof that are intended for human habitation.
34Multifamily residential real property includes residential hotels
35but does not include hotels and motels that are not residential
36hotels.

37(4) “Single-family residential real property” means any real
38property that is improved with, or consisting of, a building
39containing not more than one unit that is intended for human
40habitation.

P5    1(5) “Noncompliant plumbing fixture” means any of the
2following:

3(A) Any toilet manufactured to use more than 1.6 gallons of
4water per flush.

5(B) Any urinal manufactured to use more than one gallon of
6water per flush.

7(C) Any showerhead manufactured to have a flow capacity of
8more than 2.5 gallons of water per minute.

9(D) Any interior faucet that emits more than 2.2 gallons of water
10per minute.

11(6) “Qualified taxpayer” means the owner of any qualified real
12property.

13(7) “Water-conserving plumbing fixture” means any fixture
14that is in compliance with current building standards applicable
15to a newly constructed real property of the same type.

16(d) The qualified taxpayer shall obtain a certification from a
17licensed plumber that the plumber installed a water-conserving
18plumbing fixture to replace a noncompliant plumbing fixture on
19qualified real property in this state.

end insert
20begin insert

begin insertSEC. 4.end insert  

end insertbegin insert

This act provides for a tax levy within the meaning of
21Article IV of the Constitution and shall go into immediate effect.

end insert
begin delete22

SECTION 1.  

Section 17015 of the Revenue and Taxation Code
23 is amended to read:

24

17015.  

“Nonresident” means an individual other than a resident.

end delete

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