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SB-221 Personal Income Tax Law: Corporation Tax Law: credits: domestic violence survivor housing.(2023-2024)

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Date Published: 04/24/2023 02:00 PM
SB221:v97#DOCUMENT

Amended  IN  Senate  April 24, 2023
Amended  IN  Senate  March 07, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 221

Introduced by Senator Seyarto
(Coauthors: Senators Dodd, Glazer, and Roth)
(Coauthors: Assembly Members Dixon, Lackey, Mathis, and Weber)

January 19, 2023

An act to add and repeal Sections 17053.35 and 23625 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 221, as amended, Seyarto. Personal Income Tax Law: Corporation Tax Law: credits: domestic violence survivor housing.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would, for taxable years beginning on or after January 1, 2023, and before January 1, 2028, allow a credit of $500 $5,000 against the taxes imposed by those laws to a qualified taxpayer. The bill would define a qualified taxpayer for this purpose to mean a taxpayer that owns and leases qualified rental property, as defined, to a qualified nonprofit, as defined, pursuant to a lease that satisfies specified requirements. qualified lease. The bill would require the qualified taxpayer to obtain certification, under penalty of perjury, from the qualified nonprofit that the qualified rental property will be used to provide housing to survivors of domestic violence, as provided. By expanding the crime of perjury, this bill would establish a state-mandated local program.
Existing law requires a bill authorizing a new tax expenditure 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 include additional information required for any bill authorizing a new tax expenditure.
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 no reimbursement is required by this act for a specified reason.
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 17053.35 is added to the Revenue and Taxation Code, to read:

17053.35.
 (a) (1)For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed as a credit against the “net tax,” as that term is defined in Section 17039, of a qualified taxpayer an amount equal to five hundred dollars ($500). five thousand dollars ($5,000) for each qualified lease.

(2)A qualified taxpayer may claim no more than one credit for any taxable year pursuant to this section.

(b) For purposes of this section, the following definitions shall apply:
(1) “Domestic violence” shall have the same definition as that term is defined in Section 6211 of the Family Code.
(2) “Fair market rent” means the fair market rent for the qualified rental property as of January 1 of the taxable year as determined by the United States Department of Housing and Urban Development in accordance with Section 888.113 of Title 24 of the Code of Federal Regulations.
(3) “Qualified lease” means a lease of qualified rental property between a qualified taxpayer and a qualified nonprofit that satisfies both of the following conditions:
(A) The rental rate is at least 20 percent lower than the fair market rent.
(B) The term of the lease is at least 12 months.

(3)

(4) “Qualified nonprofit” means a nonprofit organization exempt from federal income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code that is dedicated to assisting survivors of domestic violence by offering housing below market rates.

(4)

(5) “Qualified rental property” means real property located in the state leased by a qualified taxpayer to a qualified nonprofit for the purpose of providing housing below market rates to survivors of domestic violence.

(5)

(6) “Qualified taxpayer” means a taxpayer that owns and rents qualified rental property to a qualified nonprofit pursuant to a lease that satisfies all of the following: a qualified lease.

(A)The rental rate must be at least 20 percent lower than the fair market rent.

(B)The lease must be for a term of at least six months.

(c) In the case where the credit allowed under this section exceeds the “net tax,” for a taxable year, the excess credit may be carried over to reduce the “net tax” in the following taxable year, and succeeding four taxable years, if necessary, until the credit has been exhausted.
(d) A qualified taxpayer shall receive written certification, under penalty of perjury, from a qualified nonprofit, either as a term of the qualified lease or in a separate agreement, that the qualified rental property will be used to provide housing to survivors of domestic violence. The qualified taxpayer shall provide a copy of the certification to the Franchise Tax Board upon request.
(e) (1) For the purpose of complying with Section 41, as it relates to the tax credit established by this section and Section 23625, the Legislature finds and declares as follows:
(A) The goal, purpose, and objective of the credit is to incentivize people and businesses that provide residential rental space to work with nonprofits in assisting survivors of domestic violence.
(B) The performance indicators for the Legislature to use in determining whether the credit is achieving its stated goal shall be the number of taxpayers allowed a credit pursuant to this section or Section 23625 and the average dollar value of credits allowed.
(2) (A) No later than May 1, 2029, November 1, 2026, and annually thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit pursuant to this section and Section 23625 and the average dollar value of credits allowed.
(B) The disclosure provisions of this paragraph shall be treated as an exception to Section 19542.
(f) This section shall remain operative only until December 1, 2028, and as of that date is repealed.

SEC. 2.

 Section 23625 is added to the Revenue and Taxation Code, to read:

23625.
 (a) (1)For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed as a credit against the “tax,” as that term is defined in Section 26036, of a qualified taxpayer an amount equal to five hundred dollars ($500). five thousand dollars ($5,000) for each qualified lease.

(2)A qualified taxpayer may claim no more than one credit for any taxable year pursuant to this section.

(b) For purposes of this section, the following definitions shall apply:
(1) “Domestic violence” shall have the same definition as that term is defined in Section 6211 of the Family Code.
(2) “Fair market rent” means the fair market rent for the qualified rental property as of January 1 of the taxable year as determined by the United States Department of Housing and Urban Development in accordance with Section 888.113 of Title 24 of the Code of Federal Regulations.
(3) “Qualified lease” means a lease of qualified rental property between a qualified taxpayer and a qualified nonprofit that satisfies both of the following conditions:
(A) The rental rate is at least 20 percent lower than the fair market rent.
(B) The term of the lease is at least 12 months.

(3)

(4) “Qualified nonprofit” means a nonprofit organization exempt from federal income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code that is dedicated to assisting survivors of domestic violence by offering housing at below market rates.

(4)

(5) “Qualified rental property” means real property located in the state leased by a qualified taxpayer to a qualified nonprofit for the purpose of providing housing at below market rates to survivors of domestic violence.

(5)

(6) “Qualified taxpayer” means a taxpayer that owns and rents qualified rental property to a qualified nonprofit pursuant to a lease that satisfies all of the following: qualified lease.

(A)The rental rate must be at least 20 percent lower than the fair market rent.

(B)The lease must be for a term of at least six months.

(c) In the case where the credit allowed under this section exceeds the “tax,” for a taxable year, the excess credit may be carried over to reduce the “tax” in the following taxable year, and succeeding four taxable years, if necessary, until the credit has been exhausted.
(d) A qualified taxpayer shall receive written certification, under penalty of perjury, from a qualified nonprofit, either as a term of the lease or in a separate agreement, that the qualified rental property will be used to provide housing to survivors of domestic violence. The qualified taxpayer shall provide a copy of the certification to the Franchise Tax Board upon request.

(e)For purposes of complying with Section 41, the goal, purpose, objective, performance indicators, and data collection requirements for the credit allowed by this section shall be as specified in subdivision (e) of Section 17053.35.

(f)

(e) This section shall remain operative only until December 1, 2028, and as of that date is repealed.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

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.