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AB-1057 Income tax credit: highway maintenance and enhancement.(2001-2002)

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AB1057:v96#DOCUMENT

Amended  IN  Assembly  April 25, 2001
Amended  IN  Assembly  June 05, 2001
Amended  IN  Assembly  January 07, 2002

CALIFORNIA LEGISLATURE— 2001–2002 REGULAR SESSION

Assembly Bill
No. 1057

Introduced  by  Assembly Member Cogdill
 (Coauthor(s): Assembly Member Bill Campbell, Cox, La Suer, Leach, Robert Pacheco)

February 23, 2001

An act to add and repeal Sections 17060 and 23605 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1057, as amended, Cogdill. Income tax credit: highway maintenance and enhancement.
Existing law authorizes the Department of Transportation to enter into an agreement to accept funds, materials, equipment, or services from any person for maintenance or roadside enhancement of a section of a state highway. Existing law authorizes the Director of Transportation to conduct a demonstration program in the County of Los Angeles and the County of Orange with respect to giving recognition to the sponsoring person in this program.
The Personal Income Tax Law and Bank and Corporation Tax Law allow various credits against the net tax due with respect to income taxed by those laws.
This bill would authorize a credit against those personal income taxes for each taxable year beginning on or after January 1, 2001, and before January 1, 2006, in an amount equal to 50% of the amount paid or incurred, and the fair market value of the value of materials, equipment, or services donated, as defined, by the taxpayer during the taxable year for maintenance or roadside enhancement of a section of a state highway pursuant to existing provisions of the Streets and Highways Code.
This bill would also authorize a credit against bank and corporation taxes for each taxable year beginning on or after January 1, 2001, and before January 1, 2006, in an amount equal to 50% of the value of materials and equipment donated, as defined, by the taxpayer during the taxable year for maintenance or roadside enhancement of a section of a state highway pursuant to existing provisions of the Streets and Highways Code.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 17060 is added to the Revenue and Taxation Code, to read:

17060.
 (a) For each taxable year beginning on or after January 1, 2001, and before January 1, 2006, there shall be allowed a maintenance and roadside enhancement credit against the “net tax,” as defined in Section 17039, in an amount equal to 50 percent of the qualified amount as defined in subdivision (b).
(b) For purposes of this section “qualified amount” means both of the following:
(1) The amount paid or incurred by the taxpayer during the taxable year for maintenance or roadside enhancement of a section of a state highway pursuant to Section 91.5 or 91.7 of the Streets and Highway Code.
(2) The value of materials, equipment, and services donated by the taxpayer during the taxable year for maintenance or roadside enhancement of a section of a state highway pursuant to Section 91.5 or 91.7 of the Streets and Highway Code. For purposes of this paragraph, the value of materials and equipment donated means fair market value and the value of services donated shall be no greater than the hourly rate for labor, as determined annually by the Department of Transportation, for the maintenance and roadside enhancement of a section of a state highway.

(c)The taxpayer shall obtain written verification from the Department of Transportation of the value of the materials and equipment donated and the number of hours donated during the taxable year for the maintenance or roadside enhancement of a section of a state highway. The taxpayer shall retain a copy of the written verification and provide it, upon request, to the Franchise Tax Board.

(d)paragraph:
(A) The value of materials and equipment means an amount equal to the amount that would otherwise be deductible under Section 170 of the Internal Revenue Code, as applicable for purposes of this part.
(B) The value of services donated may not be greater than the amount determined using the hourly rate for labor, as determined annually by the Department of Transportation, for the maintenance and roadside enhancement of a section of a state highway.
(C) The term “services donated” does not include services performed by the taxpayer for which the taxpayer received compensation as defined in Section 61(a)(1) of the Internal Revenue Code.
(c) The credit authorized under this section for the donation of materials and equipment shall not be allowed unless the donation is verified in accordance with regulations prescribed under Section 170 of the Internal Revenue Code, as applicable for purposes of this part.
(d) The credit authorized under this section for the donation of services shall be subject to the same verification requirements related to the use of an automobile under Section 170 of the Internal Revenue Code.
(e) The credit amount allowed under this section shall be in lieu of any deduction or credit otherwise allowed by this part.

(e)

(f) The credit allowed under this section for services donated shall not be considered compensation for services, as defined under Section 61(a)(1) of the Internal Revenue Code.
(g) If the credit allowed under this section exceeds the “net tax,” the excess may be carried forward over to reduce the “net tax” in the following year, and the six succeeding years, if necessary, or until the credit is exhausted, whichever occurs first.

(f)

(h) On or before January 1, 2005, the Franchise Tax Board shall report to the Legislature on the utilization of the credit allowed under this section.

(g)

(i) This section shall remain in effect only until December 1, 2006, and as of that date is repealed.

SEC. 2.

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

23605.
 (a) For each taxable year beginning on or after January 1, 2001, and before January 1, 2006, there shall be allowed a maintenance and roadside enhancement credit against the “tax” as defined in Section 23036, in an amount equal to 50 percent of the qualified amount as defined in subdivision (b).
(b) For purposes of this section “qualified amount” means both of the following:
(1) The amount paid or incurred by the taxpayer during the taxable year for maintenance or roadside enhancement of a section of a state highway pursuant to Section 91.5 or 91.7 of the Streets and Highway Code.
(2) The value of materials, equipment, and services and equipment donated by the taxpayer during the taxable year for maintenance or roadside enhancement of a section of a state highway pursuant to Section 91.5 or 91.7 of the Streets and Highway Code. For purposes of this paragraph, the value of materials and equipment donated means fair market value and the value of services donated shall be no greater than the hourly rate for labor, as determined annually by the Department of Transportation, for the maintenance and roadside enhancement of a section of a state highway. an amount equal to the amount that would otherwise be deductible under Section 170 of the Internal Revenue Code, as applicable for purposes of this part.

(c)The taxpayer shall obtain written verification from the Department of Transportation of the value of the materials and equipment donated and the number of hours donated during the taxable year for the maintenance or roadside enhancement of a section of a state highway. The taxpayer shall retain a copy of the written verification and provide it, upon request, to the Franchise Tax Board.

(c) The credit authorized under this section for the donation of materials and equipment shall not be allowed unless the donation is verified in accordance with regulations prescribed under Section 170 of the Internal Revenue Code, as applicable for purposes of this part.
(d) The credit amount allowed under this section shall be in lieu of any deduction or credit otherwise allowed by this part.
(e) If the credit allowed under this section exceeds the “tax,” the excess may be carried forward over to reduce the “tax” in the following year, and the six succeeding years, if necessary, or until the credit is exhausted, whichever occurs first.
(f) On or before January 1, 2005, the Franchise Tax Board shall report to the Legislature on the utilization of the credit allowed under this section.
(g) This section shall remain in effect only until December 1, 2006, and as of that date is repealed.

SEC. 3.

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