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AB-2042 Personal income tax credits: residential graywater reuse systems.(2017-2018)

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Date Published: 05/01/2018 09:00 PM
AB2042:v97#DOCUMENT

Amended  IN  Assembly  May 01, 2018
Amended  IN  Assembly  March 19, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 2042

Introduced by Assembly Member Steinorth

February 06, 2018

An act to add and repeal Section 17053.37 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2042, as amended, Steinorth. Personal income tax credits: residential graywater reuse systems.
The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.
This bill, for taxable years beginning on or after January 1, 2019, and before January 1, 2024, would allow as a credit against the taxes net tax imposed by that law equal to 25% of the cost of installing a residential graywater reuse system during the taxable year in the taxpayer’s residence located in this state. The bill would limit the cumulative amount of the credit to $1,000 for the same residence. The bill would require the Franchise Tax Board to receive and evaluate applications that are submitted by taxpayers to receive a residential graywater reuse system credit and to certify to the taxpayer the amount of the credit that is authorized. The bill would prohibit the board from certifying tax credits exceeding the sum of $250,000 for any calendar year. The bill also would include additional information required for any bill authorizing a new income tax credit.
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 17053.37 is added to the Revenue and Taxation Code, to read:

17053.37.
 (a) Subject to subdivisions (h) and (i), (g) and (h), for each taxable year beginning on or after January 1, 2019, and ending before January 1, 2024, a credit shall be allowed against the taxes imposed by this part for each resident who is not a dependent of another taxpayer for against the “net tax,” as defined in Section 17039, to a taxpayer for the costs of installing a residential graywater reuse system during the taxable year in the taxpayer’s residence located in this state.
(b) The credit allowed under this section shall be in an amount equal to 25 percent of the cost of the residential graywater reuse system and shall not exceed one thousand dollars ($1,000) as evidenced by the receipt issued by the Franchise Tax Board pursuant to subdivision (h). (g). The person who provides the residential graywater reuse system shall furnish the taxpayer with an accounting of the cost to the taxpayer. A taxpayer may claim the credit under this section only once in a taxable year and shall not cumulate over different taxable years tax credits under this section exceeding, in the aggregate, one thousand dollars ($1,000) for the same residence.
(c) In the case where the credit allowed under this section exceeds the “net tax,” as defined by Section 17039, for a taxable year, the excess credit may be carried over to reduce the “net tax” in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.
(d) Taxpayers who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax credit that would have been allowed for a joint return.

(e)The credit allowed under this section is in lieu of any depreciation deduction for exhaustion or wear and tear of the residential graywater reuse system under Section 167 of the Internal Revenue Code, relating to depreciation.

(f)

(e) To qualify for the credit under this section a residential graywater reuse system and its installation shall comply with rules that are adopted by the State Water Resources Control Board Department of Housing and Community Development and that relate to the recovery and disposal of graywater.

(g)

(f) A graywater stub out that was installed by the builder of a house or dwelling unit before title was conveyed to the taxpayer does not qualify for a credit under this section.

(h)

(g) Beginning on On and after January 1, 2019, the Franchise Tax Board shall receive and evaluate applications that are submitted by taxpayers to receive a residential graywater reuse system credit under this section. A taxpayer shall apply for the credit to the Franchise Tax Board on a form prescribed by the Franchise Tax Board. The application shall be filed with the Franchise Tax Board and the Franchise Tax Board shall issue a receipt to the applicant. The application shall include all of the following:
(1) The name, address, and social security number or federal employer identification number of the applicant.
(2) The amount of the cost of the residential graywater reuse system and the amount for which the credit is claimed.
(3) Any additional information that the Franchise Tax Board requires.

(i)

(h) The Franchise Tax Board shall review each application under subdivision (h) (g) and certify to the taxpayer the amount of the credit that is authorized. The Franchise Tax Board shall not certify tax credits under this subdivision exceeding the sum of two hundred fifty thousand dollars ($250,000) for any calendar year. If qualifying applications exceed the limit of two hundred fifty thousand dollars ($250,000), the Franchise Tax Board shall authorize credits in the order of the date that the applications are received by the Franchise Tax Board. If an application is received that, if authorized, would require the Franchise Tax Board to exceed the two hundred fifty thousand dollar ($250,000) limit, the Franchise Tax Board shall grant the applicant only the remaining credit amount that would not exceed the limit. After the Franchise Tax Board authorizes two hundred fifty thousand dollars ($250,000) in tax credits, the Franchise Tax Board shall deny any subsequent applications that are received in that calendar year. The Franchise Tax Board shall not authorize any additional tax credits that exceed the two hundred fifty thousand dollar ($250,000) limit even if the amounts that have been certified to any taxpayer were not claimed or a taxpayer otherwise fails to meet the requirements to claim the additional credit.

(j)

(i) The Franchise Tax Board may verify that a residential graywater reuse system has been installed in the taxpayer’s residence.

(k)

(j) For the purposes of this section, “residential graywater reuse system” means a system or a series of components or mechanisms that are designed to provide for the collection of residential graywater and includes a system that is capable of storing residential graywater for future use and reusing the collected water for the same residential property.

(l)

(k) This section shall remain in effect only until December 1, 2024, and as of that date is repealed.

SEC. 2.

 For the purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares that the following applies to Section 17053.37 of the Revenue and Taxation Code:
(a) The specific goals, purposes, and objectives of the tax credit are to increase residential use of graywater reuse systems and to decrease the total water use of households throughout California.
(b) The performance indicators for the tax credit are increasing numbers of residential graywater reuse systems installed and the resident’s taxpayer’s self-reported decreasing amounts of household water use at those residences.
(c) The specific data to be used to determine whether the tax credit is effective at meeting the goals described in subdivision (a) are the number of households that claim the tax credit to subsidize the installation of residential graywater reuse systems and the households’ change in water consumption. The Legislative Analyst’s Office shall collect and remit the data to the Legislature.

SEC. 3.

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