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AB-2217 Income taxes: credit: capital gain: sale of qualified vacant site.(2019-2020)

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Date Published: 02/27/2020 09:00 PM
AB2217:v98#DOCUMENT

Amended  IN  Assembly  February 27, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2217


Introduced by Assembly Member Mathis

February 12, 2020


An act to amend Section 17010 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 2217, as amended, Mathis. Personal income taxes. 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. Existing law requires any bill authorizing a new tax expenditure, including tax credits, to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2021, and before January 1, 2033, to a taxpayer that sells a qualified vacant site in an amount equal to 50% of the 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 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. The bill would also include additional information required for any bill authorizing a new tax expenditure.
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 imposes taxes on income and provides definitions of specified terms for purposes of that law, including a definition for “taxable year.”

This bill would make a nonsubstantive change to that definition.

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, 2021, and before January 1, 2033, 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) (1) For purposes of this section, “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 subparagraph (A), 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.
(2) For purposes of paragraph (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.
(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) The Franchise Tax Board may issue any regulations necessary or appropriate to implement the purposes of this section.
(g) This section shall remain in effect only until December 1, 2033, 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, 2021, and before January 1, 2033, 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 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 the construction begins no later than five years from the sale of the qualified vacant site.
(b) (1) For purposes of this section, “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 subparagraph (A), 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.
(2) For purposes of paragraph (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.
(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) The Franchise Tax Board may issue any regulations necessary or appropriate to implement the purposes of this section.
(g) This section shall remain in effect only until December 1, 2033, and as of that date is repealed.

SEC. 3.

 For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Sections 17053.60 and 23660 of the Revenue and Taxation Code, as added by this act, hereafter “credits,” the Legislature finds and declares the following:
(a) The specific goal, purpose, and objective of the credits is to encourage voluntary participation in the sale of vacant sites for the repurposing and construction of housing or mixed-use developments on the site.
(b) The effectiveness of the credits shall be measured by the number of taxpayers claiming the credits.
(c) The data collection requirements are as follows:
(1) The Legislative Analyst’s Office shall prepare and submit a report to the Legislature, on or before December 1, 2023, and every two years thereafter, until December 1, 2033, on the effectiveness of the credits. The report shall include information on the number of taxpayers claiming the credits and the total amount of the credits provided. The Legislative Analyst may request information from the Franchise Tax Board for the purposes of this subdivision. The report shall be submitted in compliance with Section 9795 of the Government Code.
(2) Notwithstanding Section 19542 of the Revenue and Taxation Code, the Franchise Tax Board shall provide any data requested by the Legislative Analyst’s Office pursuant to this subdivision, as allowed pursuant to the Revenue and Taxation Code.

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.
SECTION 1.Section 17010 of the Revenue and Taxation Code is amended to read:
17010.

“Taxable year” means either the calendar year or the fiscal year upon the basis of which the taxable income is computed under this part. If no fiscal year has been established, “taxable year” means the calendar year.

“Taxable year” means, in the case of a return made for a fractional part of a year under this part or under regulations prescribed by the Franchise Tax Board, the period for which the return is made.