BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 355
Author: Beall (D)
Amended: 8/18/14
Vote: 21
SENATE NATURAL RESOURCES AND WATER COMMITTEE : 8-1, 4/23/13
AYES: Pavley, Cannella, Evans, Hueso, Jackson, Lara, Monning,
Wolk
NOES: Fuller
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 5/1/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
SENATE APPROPRIATIONS COMMITTEE : 6-0, 1/23/14
AYES: De Le�n, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
SENATE FLOOR : 32-0, 1/28/14
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De Le�n, DeSaulnier, Evans, Fuller, Galgiani,
Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Knight, Leno,
Liu, Mitchell, Padilla, Pavley, Roth, Steinberg, Torres,
Vidak, Wolk, Wyland, Yee
NO VOTE RECORDED: Gaines, Lara, Lieu, Monning, Nielsen,
Walters, Wright, Vacancy
ASSEMBLY FLOOR : 77-0, 8/25/14 - See last page for vote
SUBJECT : Income taxes: credits
SOURCE : California Council of Land Trusts
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DIGEST : This bill extends the Natural Heritage Preservation
(NHP) tax credit program until June 30, 2020, and extends the
period of time during which a taxpayer may carry forward any
unused NHP tax credit from eight to 15 years.
Assembly Amendments extend the period for when a qualified
contribution is made for which a tax credit would be allowed;
and extend the carryover period for a qualified contribution
made on or after January 1, 2015.
ANALYSIS :
Existing law:
1.Requires, under the Natural Heritage Preservation Tax Credit
Act of 2000 (Act), the Wildlife Conservation Board (Board) to
implement a program under which property, as defined, may be
contributed to the state, any local government, as defined, or
to any nonprofit organization designated by a local
government, based on specified criteria, in order to provide
for the protection of wildlife habitat, open space, and
agricultural lands.
2.Allows, under the Personal Income Tax Law and the Corporation
Tax Law, a credit against the taxes imposed by those laws in
the amount equal to 55% of the fair market value of any
qualified contribution, as defined, contributed during the
taxable year pursuant to the Act, as provided.
This bill:
1.Extends the NHP tax credit program until June 30, 2020.
2.Extends the period of time from eight to 15 years during which
a donor of a land contribution, made on or after January 1,
2015, may claim any unused NHP tax credit, under both the
Corporation Tax Law and the Personal Income Tax Law.
3.Takes effect immediately as a tax levy.
Background
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The Board is a separate and independent board within the
Department of Fish and Wildlife (DFW) with authority and funding
to carry out an acquisition and development program for wildlife
conservation. The Board consists of the President of the Fish
and Game Commission, the Director of the DFW and the Director of
the Department of Finance.
The Board's main functions are land protection, habitat
restoration, and development of wildlife-oriented public access
facilities. To those ends, the Board approves and funds land
acquisitions, conservation easement acquisitions, and habitat
restoration, enhancement, and public access projects.
The Act was intended to foster public/private partnerships to
resolve land use and water disputes, assist habitat stewardship,
and demonstrate the state's commitment to protect natural
resources by rewarding landowners who perceive habitat as an
asset rather than a liability. Consequently, the Act provided
up to $100 million in state tax credits for donations of water
rights or qualified land (fee title or easement) equal to 55% of
the appraised market value. The donation had to protect
wildlife habitat, parks and open space, archaeological
resources, agricultural land, or water. The donation could have
been to any department within the Agency, a local government, or
a qualified non-profit. Credit was limited to landowners "net
tax" liability. However, the credit could be carried over up to
eight years until the credit was exhausted. The tax credit
program was run through the Board.
The tax credit program was first implemented in 2001 but was
suspended in 2002 because of pressures on the General Fund (GF).
In 2005, an amended version of the program was reinstated
through June 30, 2008. Under the amended program, a donation
was only eligible for a tax credit if all the lost revenue
resulting from the tax credit could have been reimbursed to the
GF from another source, such as state bond funds including
Proposition 40 and Proposition 50.
The tax credit was continued in 2009, by, among other things,
extending the sunset date from June 30, 2008 to June 30, 2015,
removing the $100 million cap on the amount of tax credits that
can be approved by the Board, and allowing certain fund sources
other than bond funds to reimburse the GF for the revenue loss
resulting from the award of tax credits.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee:
1.Minor and absorbable administration costs to the Board and
Franchise Tax Board.
2.Estimated GF revenue decreases of $450,000, $1.3 million, and
$2.8 million in fiscal year (FY) 2014-15, FY 2015-16, and FY
2016-17, respectively, reimbursed from the NHP Tax Credit
Reimbursement Account. The reimbursement results in increased
utilization of bond funds or private donations to offset any
current GF revenue decrease, however the use of bond funds
will result in marginal increased debt service costs and
reduced interest revenue.
SUPPORT : (Verified 8/25/14)
California Council of Land Trusts (source)
California Rangeland Trust
Land Trust of Santa Cruz County
Marin Agricultural Land Trust
Peninsula Open Space Trust
Sequoia Riverlands Trust
Trust for Public Land
Wildlife Heritage Foundation
ARGUMENTS IN SUPPORT : According to this bill's sponsor,
California Council of Land Trusts, "The Natural Heritage
Preservation Tax Credit (NHPTC) has protected 8,006 acres with
the authorization of $48.5 M in tax credits for a total of 14
projects; and, it has delivered high value for the state's
dollar. While this success cannot be overlooked or minimized,
not a single eligible entity had taken advantage of the NHPTC
since 2005. Prior to 2005, many landowners were interested but
were unable to make it work for them. The primary reason is
that most landowners are simply unable to take advantage of the
state tax credit because they lack the state tax liability that
would make the tax credit under NHPTC attractive to them. In
contrast, California business entities frequently have state tax
liabilities. In recognition of this mismatch between the
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realities of landownership and state tax liabilities, SB 355
proposes to modify the existing NHPTC so that landowners who are
unable to utilize the tax credit can transfer the tax credit to
interested corporate entities who can utilize the tax credit."
ASSEMBLY FLOOR : 77-0, 8/25/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Dahle, Mansoor, Vacancy
RM:k 8/26/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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