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AB-201 Income taxes: credit: capital gain: sale of qualified vacant site.(2017-2018)

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Date Published: 03/27/2017 09:00 PM
AB201:v98#DOCUMENT

Amended  IN  Assembly  March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 201


Introduced by Assembly Member Steinorth

January 23, 2017


An act to amend Section 18151 of the Revenue and Taxation Code, relating to taxation. An act to add and repeal Sections 17053.60 and 23660 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 201, as amended, Steinorth. Capital gains and losses. Income taxes: credit: capital gain: sale of qualified vacant site.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2018, and before January 1, 2031, to a taxpayer that sells a qualified vacant site in an amount equal to 50% of the net tax or tax attributable to a capital gain from the sale of a qualified vacant site in the taxable year that it is sold and 50% of the net tax or tax imposed on a capital gain from the sale of a qualified vacant site in the taxable year that the construction process begins on the qualified vacant site, as specified. The bill would require a county assessor to provide a report, upon request, to a taxpayer or the Franchise Tax Board relating to use of the qualified vacant site.
By imposing additional duties upon county assessors, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
This bill would take effect immediately as a tax levy.

The Personal Income Tax Law provides for modified conformity with federal tax law, including modified conformity to federal tax provisions relating to the treatment of capital gains and losses.

This bill would make nonsubstantive changes to that provision.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

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


SECTION 1.

 Section 17053.60 is added to the Revenue and Taxation Code, to read:

17053.60.
 (a) For each taxable year beginning on or after January 1, 2018, and before January 1, 2031, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, to a taxpayer that sells a qualified vacant site in an amount equal to the following:
(1) Fifty percent of the tax attributable to a capital gain from the sale of a qualified vacant site in the taxable year that it is sold.
(2) Fifty percent of the tax attributable to a capital gain from the sale of a qualified vacant site in the taxable year that the construction process begins to build housing or a mixed-use development on the qualified vacant site if construction begins no later than five years from the sale of the qualified vacant site.
(b) For purposes of this section:
(1) A metropolitan county, a micropolitan county, a nonmetropolitan county, and a suburban county shall be determined in accordance with Section 65583.2 of the Government Code.
(2) “Qualified vacant site” means an undeveloped site or a site with a building that has been abandoned for three or more years, that is surrounded by development on two or more sides, and that has any of the following densities approved for development:
(A) For a city located in a nonmetropolitan county or for a nonmetropolitan county that has a micropolitan area within it, sites that are approved for the development of at least 15 units per acre.
(B) For an unincorporated area in a nonmetropolitan county that does not meet the requirements of paragraph (1), sites that are approved for the development of at least 10 units per acre.
(C) For a suburban jurisdiction, sites that are approved for the development of at least 20 units per acre.
(D) For a city located within a metropolitan county, or for a metropolitan county, sites that are approved for the development of at least 30 units per acre.
(c) If more than one taxpayer owns the qualified vacant site, the credit shall be allocated among the taxpayers based on percentage of ownership.
(d) A county assessor, upon request of the taxpayer or the Franchise Tax Board, shall provide a report relating to the use of the qualified vacant site.
(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding seven years if necessary, until the credit is exhausted.
(f) Section 41 does not apply to this section.
(g) The Franchise Tax Board may issue any regulations necessary or appropriate to implement the purposes of this section.
(h) This section shall remain in effect only until December 1, 2031, and as of that date is repealed.

SEC. 2.

 Section 23660 is added to the Revenue and Taxation Code, to read:

23660.
 (a) For each taxable year beginning on or after January 1, 2018, and before January 1, 2031, there shall be allowed as a credit against the “tax,” as defined in Section 23036, to a taxpayer that sells a qualified vacant site in an amount equal to the following:
(1) Fifty percent of the net tax attributable to a capital gain from the sale of a qualified vacant site in the taxable year.
(2) Fifty percent of the net tax attributable to a capital gain from the sale of a qualified vacant site in the taxable year that the construction process begins on the qualified vacant site to build housing or a mixed-use development if the ground is broken no later than five years from the sale of the qualified vacant site.
(b) For purposes of this section:
(1) A metropolitan county, a micropolitan county, a nonmetropolitan county, and a suburban county shall be determined in accordance with Section 65583.2 of the Government Code.
(2) “Qualified vacant site” means an undeveloped site or a site with a building that has been abandoned for three or more years, that is surrounded by development on two or more sides, and that has any of the following densities approved for development:
(A) For a city located in a nonmetropolitan county or for a nonmetropolitan county that has a micropolitan area within it, sites that are approved for the development of at least 15 units per acre.
(B) For an unincorporated area in a nonmetropolitan county that does not meet the requirements of paragraph (1), sites that are approved for the development of at least 10 units per acre.
(C) For a suburban jurisdiction, sites that are approved for the development of at least 20 units per acre.
(D) For a city located within a metropolitan county, or for a metropolitan county, sites that are approved for the development of at least 30 units per acre.
(c) If more than one taxpayer owns the qualified vacant site, the credit shall be allocated among the taxpayers based on percentage of ownership.
(d) A county assessor, upon request of the taxpayer or the Franchise Tax Board, shall provide a report relating to the use of the qualified vacant site.
(e) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following taxable year, and succeeding seven years if necessary, until the credit is exhausted.
(f) Section 41 does not apply to this section.
(g) The Franchise Tax Board may issue any regulations necessary or appropriate to implement the purposes of this section.
(h) This section shall remain in effect only until December 1, 2031, and as of that date is repealed.

SEC. 3.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

SEC. 4.

  This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
SECTION 1.Section 18151 of the Revenue and Taxation Code is amended to read:
18151.

Except as otherwise provided, subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to capital gains and losses, shall apply.