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AB-2799 Income taxes: credits: leased or rented property: persons receiving Section 8 assistance.(2019-2020)

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Date Published: 05/11/2020 09:00 PM
AB2799:v97#DOCUMENT

Amended  IN  Assembly  May 11, 2020
Amended  IN  Assembly  May 04, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2799


Introduced by Assembly Member Petrie-Norris

February 20, 2020


An act to add and repeal Sections 17053.80 and 23680 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2799, as amended, Petrie-Norris. Income taxes: credits: leased or rented property: persons receiving Section 8 assistance.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
Under existing federal law, Section 8 of the United States Housing Act of 1937 (Section 8), the United States Department of Housing and Urban Development is authorized to enter into annual contributions contacts with public housing agencies pursuant to which those agencies are authorized to enter into contracts with owners of dwelling units to make housing assistance payments, including tenant-based assistance payments to benefit low-income families and rental assistance to certain homeless veterans.
This bill, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, would allow a credit against those taxes to a qualified taxpayer, as defined, in an amount equal to 3% of the amount of rent or lease payments in the form of certain federal housing assistance vouchers issued under Section 8 per qualified property, defined as a dwelling or unit rented or leased to persons receiving certain federal assistance. The bill would require the taxpayer, to be eligible for the credit, to obtain verification from the appropriate local housing authority, as defined, that the property for which a credit is claimed satisfies the definition of qualified property and to provide a copy of the verification to the Franchise Tax Board. This bill would limit the credit to 5 qualified properties per taxpayer per taxable year. The bill would also provide that the credit amount is $0 for each taxable year beginning on or after January 1, 2021, and before January 1, 2026, unless otherwise specified in a bill providing for appropriations related to the Budget Act.
Existing law requires any bill authorizing a new tax expenditure, including income tax credits under the Personal Income Tax Law and the Corporation Tax Law, to contain, among other things, specific goals, purposes, and objectives that the new tax expenditure will achieve, detailed performance indicators, and data collection requirements, as provided.
This bill would also include that additional information required for any bill authorizing a new tax expenditure.
By imposing new duties upon local government officials with respect to the verification of qualified properties, 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 17053.80 is added to the Revenue and Taxation Code, to read:

17053.80.
 (a) For each taxable year beginning on or after January 1, 2021, and before January 1, 2026, there shall be allowed to a qualified taxpayer a credit against the “net tax,” as defined in Section 17039, in an amount equal to 3 percent of the qualified amount per qualified property.
(b) For purposes of this section:
(1) “Local housing authority” means a housing authority created pursuant to Chapter 1 (commencing with Section 34200) of Part 2 of Division 24 of the Health and Safety Code.
(2) “Qualified amount” means the total amount of rent or lease payments in the form of federal housing assistance vouchers issued under Section 1437f of Title 42 of the United States Code, not including project-based vouchers as provided by Section 1437f(o)(13) of Title 42 of the United States Code, received by the qualified taxpayer during the taxable year in which the credit is claimed.
(3) “Qualified property” means a dwelling or unit that is rented or leased to persons receiving assistance under Section 1437f of Title 42 of the United States Code.
(4) “Qualified taxpayer” means a taxpayer that satisfies both of the following:
(A) Owns qualified property.
(B) Enters into a new contract or contracts to rent or lease qualified property on or after January 1, 2021.
(c) To be eligible for the credit the qualified taxpayer shall obtain verification from the appropriate local housing authority that the property for which a credit is claimed satisfies the definition of qualified property. The qualified taxpayer shall provide a copy of the verification to the Franchise Tax Board.
(d) A qualified taxpayer shall not receive a credit for more than five qualified properties per taxable year.
(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 eight years if necessary, until the credit is exhausted.
(f) (1) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.
(2) Unless otherwise specified in any bill providing for appropriations related to the Budget Act, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, the amount of credit allowed pursuant to this section shall be zero dollars ($0).

SEC. 2.

 Section 23680 is added to the Revenue and Taxation Code, to read:

23680.
 (a) For each taxable year beginning on or after January 1, 2021, and before January 1, 2026, there shall be allowed to a qualified taxpayer a credit against the “tax,” as defined in Section 23036, in an amount equal to 3 percent of the qualified amount per qualified property.
(b) For purposes of this section:
(1) “Local housing authority” means a housing authority created pursuant to Chapter 1 (commencing with Section 34200) of Part 2 of Division 24 of the Health and Safety Code.
(2) “Qualified amount” means the total amount of rent or lease payments in the form of federal housing assistance vouchers issued under Section 1437f of Title 42 of the United States Code, not including project-based vouchers as provided by Section 1437f(o)(13) of Title 42 of the United States Code, received by the qualified taxpayer during the taxable year in which the credit is claimed.
(3) “Qualified property” means a dwelling or unit that is rented or leased to persons receiving assistance under Section 1437f of Title 2 of the United States Code.
(4) “Qualified taxpayer” means a taxpayer that satisfies both of the following:
(A) Owns qualified property.
(B) Enters into a new contract or contracts to rent or lease qualified property on or after January 1, 2021.
(c) To be eligible for the credit the qualified taxpayer shall obtain verification from the appropriate local housing authority that the property for which a credit is claimed satisfies the definition of qualified property. The qualified taxpayer shall provide a copy of the verification to the Franchise Tax Board.
(d) A qualified taxpayer shall not receive a credit for more than five qualified properties per taxable year.
(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 eight years if necessary, until the credit is exhausted.
(f) (1) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.
(2) Unless otherwise specified in any bill providing for appropriations related to the Budget Act, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, the amount of credit allowed pursuant to this section shall be zero dollars ($0).

SEC. 3.

For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Sections 17053.80 and 23680 of the Revenue and Taxation Code as added by this act, the Legislature finds and declares as follows:

(a)The goal of the credits is to reduce homelessness by providing a tax incentive to property owners that rent or lease property to persons receiving assistance under Section 1437f of Title 2 of the United States Code, which is commonly known as Section 8 of the United States Housing Act of 1937.

(b)The effectiveness of the credits shall be measured by the number of taxpayers claiming the credit.

SEC. 3.

 For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Sections 17053.80 and 23680 of the Revenue and Taxation Code as added by this act, the Legislature finds and declares as follows:
(a) The goal of the credits is to reduce homelessness by providing a tax incentive to property owners that rent or lease property to persons receiving assistance under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f).
(b) The detailed performance indicators for the Legislature to use when measuring whether the tax credits allowed by this act meet those specific goals, purposes, and objectives are as follows:
(1) The measure of Section 8 vouchers approved per fiscal year in California once the tax credits are in place compared to data of approved Section 8 vouchers before the enactment of these tax credits.
(2) The measure of increase of Section 8 voucher applicant approvals within ZIP Codes with an area median income equal to 120 percent of federal poverty level.
(3) The pace of approvals for Section 8 voucher applicants.

SEC. 4.

 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. 5.

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