BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                          AB 1811  (Reyes)
          
          Hearing Date:8/29/00            Amended:8/18/00        
          Consultant: Anne Maitland           Policy Vote:Housing:  
          5-0           
          ____________________________________________________________ 
          ___
          BILL SUMMARY: 
          
          AB 1811 allows the Tax Credit Allocation Committee to  
          commit future years' tax credits for the farmworker housing  
          program for specified projects, allows the credit to be  
          awarded before costs are incurred, and allows the credit to  
          be used by the taxpayer once the farmworker housing is  
          placed in service.

                              Fiscal Impact (in thousands)
           
          Major Provisions        2000-01             2001-02               2002-03   
           Fund  
          
          Credit                  unknown revenue loss of $100k or more per  
          year   General
          
          STAFF COMMENTS:  
          This bill may meet the criteria to be placed on the  
          Suspense file.  Although the Tax Credit Allocation  
          Committee is authorized to allocate up to $500,000 a year  
          in credits and to roll over any unallocated credits into  
          future years, no credits have been allocated yet.  This  
          means that there is $1.5 million (for 1998, 1999, and 2000)  
          in credits available to be allocated.   To the extent that  
          the changes made by AB 1811 make it more attractive to  
          taxpayers to build low-income housing, there will be a  
          revenue loss.

          Current law provides for a credit for income and corporate  
          taxpayers who build farmworker housing, equal to 50% of the  
          costs of the housing.  Each year, the Tax Credit Allocation  
          Committee may award a total of $500,000 in credits for this  
          program and for a program that provides tax credits to  
          banks which provide loans for farmworker housing at  
          below-market rates.  To be awarded the credit, the taxpayer  
          must have first incurred at least some construction costs.   










          To claim the credit on a tax return, the farmworker housing  
          built by the taxpayer must be occupied.

          AB 1811 allows the credit to be awarded prior to a taxpayer  
          incurring construction costs and to be claimed on a tax  
          return when the property is placed in service (ready for  
          occupancy) instead of occupied.  In addition, it allows the  
          Tax Credit Allocation to reserve some or all of future  
          years' credit allocations for particular projects.

          AB 1811 also exempts regulations promulgated by the Tax  
          Credit Allocation Committee for the farmworker housing  
          credit program from Office of Administrative Law review and  
          allows the Committee to develop emergency regulations for  
          this program.   A similar exemption exists for the  
          low-income housing credit program.