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SB-952 Personal income taxes: Fire Safe Home Tax Credits Act.(2023-2024)

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Date Published: 04/04/2024 09:00 PM
SB952:v98#DOCUMENT

Amended  IN  Senate  April 04, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 952

Introduced by Senators Dahle and Grove
(Coauthors: Senators Jones and Seyarto)
(Coauthor: Assembly Member Megan Dahle)

January 22, 2024

An act to add and repeal Sections 17052.13, 17052.14, and 17052.15 17052.13 and 17052.14 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 952, as amended, Dahle. Personal income taxes: Fire Safe Home Tax Credits Act.
The Personal Income Tax Law allows various credits against the tax 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 would allow credits against the tax imposed by the Personal Income Tax Law for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, to a qualified taxpayer for qualified costs relating to qualified home hardening, as defined, and for qualified costs relating to qualified vegetation management, as defined, in specified amounts, not to exceed an aggregate amount of $500,000,000 per taxable year.

This

The bill would authorize require a qualified taxpayer to reserve a credit for qualified costs relating to qualified home hardening or qualified vegetation management prior to incurring those costs, as specified. The bill would require a qualified taxpayer that reserved a credit to submit a copy of the receipts showing the total qualified costs incurred and a certification by the qualified taxpayer, signed under penalty of perjury, that the qualified taxpayer incurred the qualified costs claimed, as specified. By requiring qualified taxpayers to submit a certification under penalty of perjury, the bill would expand the crime of perjury and impose a state-mandated local program. to be eligible for the above-described credits and provide all necessary information for this purpose, as specified.

The

This bill also would include additional information required for any bill authorizing a new income tax credit and would require the Legislative Analyst’s Office to prepare a written report regarding the credits, as provided.

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: YESNO  

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


SECTION 1.

 The credits allowed by Sections 17052.13 and 17052.14 of the Revenue and Taxation Code, as added by this act, shall be known and may be cited as the Fire Safe Home Tax Credits Act.

SEC. 2.

 Section 17052.13 is added to the Revenue and Taxation Code, to read:

17052.13.
 (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed a credit against the “net tax,” as defined in Section 17039, to a qualified taxpayer who incurs qualified costs while performing qualified home hardening on a qualified property, in an amount determined pursuant to paragraph (2).
(2) The Subject to the credit reservation requirements of subdivision (f), the credit amount shall be in an amount equal to:
(A) Fifty percent of qualified costs incurred while performing qualified home hardening, not to exceed two thousand five hundred dollars ($2,500) of credit allowed, if the qualified property is located in a moderate fire hazard severity zone, per taxable year.
(B) Fifty percent of qualified costs incurred while performing qualified home hardening, not to exceed five thousand dollars ($5,000) of credit allowed, if the qualified property is located in a high fire hazard severity zone, per taxable year.
(C) Fifty percent of qualified costs incurred while performing qualified home hardening, not to exceed ten thousand dollars ($10,000) of credit allowed, if the qualified property is located in a very high fire hazard severity zone, per taxable year.
(3) The aggregate amount of credit allowed per taxable year pursuant to this section and Section 17052.14 shall be the amount calculated pursuant to paragraph (1) of subdivision (b) of Section 17052.15. (f).
(b) For purposes of this section:
(1) “High fire hazard severity zone” means land classified by the Director of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code as within a high fire hazard severity zone.
(2) “Moderate fire hazard severity zone” means land classified by the Director of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code as within a moderate fire hazard severity zone.
(3) “Very high fire hazard severity zone” means either land classified by the Director of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code as within a very high fire hazard severity zone or an area designated by the Director of Forestry and Fire Protection pursuant to Section 51178 of the Government Code that is not a state responsibility area.
(4) (A) “Qualified costs” means any actual out-of-pocket expense incurred and paid by the qualified taxpayer during the taxable year in which the credit allowed by this section is claimed, documented by receipt, for performing qualified home hardening.
(B) “Qualified costs” do not include either of the following:
(i) Costs of any inspection or certification fees, in-kind contributions, donations, or incentives.
(ii) Expenses paid by the qualified taxpayer from any grants awarded to the qualified taxpayer for performing qualified home hardening.
(5) (A) “Qualified home hardening” means the replacement or repair of structural features that are affixed to the qualified property and performed or implemented for the primary purpose of reducing risk to structures from wildland fire.
(B) For purposes of this paragraph, “structural features” includes any of the following structural features that meet the requirements of Chapter 7A of the California Building Code: roofs, exterior walls, vents, eave assemblies, decks, fences, driveways, and chimneys.
(6) “Qualified property” means a dwelling or housing unit that is located in a moderate fire hazard severity zone, high fire hazard severity zone, or very high fire hazard severity zone for which a homeowners’ exemption pursuant to Section 218 has been granted to the qualified taxpayer in the taxable year for which the credit allowed by this section is claimed.
(7) “Qualified taxpayer” means a taxpayer who satisfies both of the following requirements:
(A) Has an adjusted gross income for the taxable year in which the credit allowed by this section does not exceed one hundred forty thousand dollars ($140,000) in the case of spouses filing a joint return, heads of households, and surviving spouses, as defined in Section 17046, or seventy thousand dollars ($70,000) for a single individual or a spouse filing separately.
(B) Owns a qualified property.

(c)For a qualified taxpayer who has not reserved a credit pursuant to Section 17052.15, a qualified taxpayer shall, upon request, provide receipts and documentation verifying qualified costs paid or incurred while performing qualified home hardening to the Franchise Tax Board.

(d)

(c) In the case where the credit allowed under this section exceeds the “net tax,” the excess credit may be carried over to reduce the “net tax” in the following taxable year, and succeeding eight taxable years, if necessary, or until the credit has been exhausted.

(e)

(d) (1) In the case of two taxpayers filing a joint return, only one credit may be claimed. In the case of two taxpayers who may legally file a joint return but file separate returns, only one of the taxpayers may claim the credit allowed by this section.
(2) A taxpayer shall not use the credit allowed by this section to be reimbursed for a lien, even if the lien was to pay for qualified costs for qualified home hardening for the qualified property.
(3) A qualified property shall only be eligible for one credit allowed by this section per taxable year.

(f)A qualified taxpayer may reserve and be allocated a credit allowed under this section pursuant to Section 17052.15

(e) If the credit allowed by this section is claimed by the qualified taxpayer, any deduction or credit otherwise allowed under this part for any qualified expenditure made by the qualified taxpayer as a trade or business expense shall be reduced by the amount of the credit allowed by this section.
(f) (1) The total aggregate amount of the credit that may be allocated by credit reservations to all qualified taxpayers pursuant to this section and Section 17052.14 shall not exceed five hundred million dollars ($500,000,000) per taxable year plus the unused credit amount, if any, for the preceding taxable year.
(2) To be eligible for the credit allowed by this section and Section 17052.14, a qualified taxpayer shall request a credit reservation from the Franchise Tax Board during the month of July for each taxable year or within 30 days of the start of their taxable year if the qualified taxpayer’s taxable year begins after July, in the form and manner prescribed by the Franchise Tax Board.
(3) To obtain a credit reservation with respect to a qualified expenditure, the qualified taxpayer shall provide all necessary information, as determined by the Franchise Tax Board.
(4) The Franchise Tax Board shall approve tentative credit reservations with respect to qualified expenditures incurred during a taxable year for qualified taxpayers, subject to the cap established under paragraph (1).
(5) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(g) For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to the Fire Safe Home Tax Credits Act, the Legislature finds and declares as follows:
(1) The specific goals, purposes, and objectives of the credits are as follows:
(A) To increase wildfire preparedness by providing a tax incentive to property owners that live in fire-prone parts of the state.
(B) To compensate taxpayers for costly mitigation measures that prepare their homes for wildfire season.
(2) To measure whether the Fire Safe Home Tax Credits meet these goals, purposes, and objectives, the Legislative Analyst’s Office shall prepare a written report on the following:
(A) The number of taxpayers claiming either or both of the credits.
(B) The average credit amount claimed on tax returns.
(3) The Legislative Analyst’s Office shall provide the written report required by paragraph (2) to the Senate Committee on Governance and Finance, the Assembly Committee on Revenue and Taxation, and the Assembly Committee on Local Government. A report submitted pursuant to this paragraph shall be submitted in compliance with Section 9795 of the Government Code.

(g)

(h)  This section shall remain in effect only until December 1, 2030, and as of that date is repealed.

SEC. 3.

 Section 17052.14 is added to the Revenue and Taxation Code, to read:

17052.14.
 (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, to a qualified taxpayer in an amount equal to 50 percent of qualified costs incurred by the taxpayer, subject to the credit reservation requirements of subdivision (f) of Section 17052.13 and not to exceed one thousand dollars ($1,000) of credit allowed per taxable year, while performing qualified vegetation management on qualified property.
(2) The aggregate amount of credit allowed per taxable year pursuant to this section and Section 17052.13 shall be the amount calculated pursuant to paragraph (1) of subdivision (b) of Section 17052.15. paragraph (1) of subdivision (f) of Section 17052.13.
(b) For purposes of this section:
(1) “High fire hazard severity zone” means land classified by the Director of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code as within a high fire hazard severity zone.
(2) “Moderate fire hazard severity zone” means land classified by the Director of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code as within a moderate fire hazard severity zone.
(3) “Very high fire hazard severity zone” means either land classified by the Director of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code as within a very high fire hazard severity zone or an area designated by the Director of Forestry and Fire Protection pursuant to Section 51178 of the Government Code that is not a state responsibility area.
(4) (A) “Qualified costs” means any actual out-of-pocket expense incurred and paid by the qualified taxpayer during the taxable year in which the credit allowed by this section is claimed, documented by receipt, for performing qualified vegetation management.
(B) “Qualified costs” do not include either of the following:
(i) Costs of any inspection or certification fees, in-kind contributions, donations, or incentives.
(ii) Expenses paid by the qualified taxpayer from any grants awarded to the qualified taxpayer for performing qualified vegetation management.
(5) “Qualified property” means a dwelling or housing unit that is located in a moderate fire hazard severity zone, high fire hazard severity zone, or very high fire hazard severity zone for which a homeowners’ exemption pursuant to Section 218 has been granted to the qualified taxpayer in the taxable year for which the credit allowed by this section is claimed.
(6) “Qualified taxpayer” means a taxpayer who satisfies both of the following requirements:
(A) Has an adjusted gross income for the taxable year in which the credit allowed by this section does not exceed one hundred forty thousand dollars ($140,000) in the case of spouses filing a joint return, heads of households, and surviving spouses, as defined in Section 17046, or seventy thousand dollars ($70,000) for a single individual or a spouse filing separately.
(B) Owns a qualified property.
(7) “Qualified vegetation management” means any of the following activities that meet the requirements of Section 4291 of the Public Resources Code performed by the qualified taxpayer for the primary purpose of reducing risk to structures from wildland fire:
(A) The creation of defensible space around structures.
(B) The establishment of fuel breaks.
(C) The thinning of woody vegetation.
(D) The secondary treatment of woody fuels by lopping and scattering, piling, chipping, removing from site, or prescribed burning.

(c)For a qualified taxpayer who has not reserved a credit pursuant to Section 17052.15, a qualified taxpayer shall, upon request, provide receipts and documentation verifying qualified costs paid or incurred while performing qualified vegetation management to the Franchise Tax Board.

(d)

(c) In the case where the credit allowed under this section exceeds the “net tax,” the excess credit may be carried over to reduce the “net tax” in the following taxable year, and succeeding eight taxable years, if necessary, or until the credit has been exhausted.

(e)

(d) (1) In the case of two taxpayers filing a joint return, only one credit may be claimed. In the case of two taxpayers who may legally file a joint return but file separate returns, only one of the taxpayers may claim the credit allowed by this section.
(2) A taxpayer shall not use the credit allowed by this section to be reimbursed for a lien, even if the lien was to pay for qualified costs for qualified vegetation management for the qualified property.
(3) A qualified property shall only be eligible for one credit allowed by this section per taxable year.

(f)A qualified taxpayer may reserve and be allocated a credit allowed under this section pursuant to Section 17052.15.

(e) If the credit allowed by this section is claimed by the qualified taxpayer, any deduction or credit otherwise allowed under this part for any qualified expenditure made by the qualified taxpayer as a trade or business expense shall be reduced by the amount of the credit allowed by this section.

(g)

(f)  This section shall remain in effect only until December 1, 2030, and as of that date is repealed.

SEC. 4.Section 17052.15 is added to the Revenue and Taxation Code, to read:
17052.15.

(a)(1)(A)A qualified taxpayer may, but is not required to, reserve the credit for qualified home hardening allowed pursuant to Section 17052.13 or qualified vegetation management allowed pursuant to Section 17052.14 prior to incurring qualified costs. To reserve a credit, the qualified taxpayer shall sign and submit to the Franchise Tax Board a statement that the qualified taxpayer intends to incur qualified costs associated with qualified home hardening or qualified vegetation management and the estimated amount of qualified costs to be incurred within the taxable year in which the credit is claimed. Upon receipt of the statement, the Franchise Tax Board shall notify the qualified taxpayer that the Franchise Tax Board has reserved the credit for the qualified taxpayer, pending receipt of the information required under paragraph (2).

(B)The credit reservation shall be canceled if a qualified taxpayer does not provide the information required under paragraph (2) or provides a notification of cancellation before the end of the taxable year.

(2)Subject to subdivision (b), a credit allocation shall be made to a qualified taxpayer who submits to the Franchise Tax Board, within two weeks after the date the qualified costs were incurred, a copy of the receipt or receipts showing the total qualified costs incurred and a certification by the qualified taxpayer, signed under penalty of perjury, that the qualified taxpayer incurred the qualified costs claimed.

(b)(1)The aggregate amount of credits that may be allowed to all qualified taxpayers for allocated and nonallocated credits for a taxable year pursuant to Sections 17052.13 and 17052.14 is five hundred million dollars ($500,000,000), plus the unused credit amount, if any, for the preceding taxable year.

(2)If the amount of credit reserved exceeds the amount determined pursuant to paragraph (1), the Franchise Tax Board shall establish a wait list for subsequently received certifications and reservations, with an order of priority based on the date certification or reservation was received by the Franchise Tax Board. The Franchise Tax Board shall notify qualified taxpayers on the wait list no later than December 31 of the taxable year as to whether they have been allocated a credit and the amount allocated.

(c)(1)The Franchise Tax Board shall reserve and allocate, and allow nonallocated credits, to qualified taxpayers on a first-come-first-served basis.

(2)(A)Except as provided in subparagraph (B), the qualified taxpayer shall claim the credit on a timely filed original return.

(B)A qualified taxpayer on the wait list described in paragraph (2) of subdivision (b) that is allocated a credit for qualified costs may claim the credit on an amended income tax return for that taxable year.

(3)The receipt date of the information described in subdivision (a) shall be determined by the Franchise Tax Board.

(4)(A)The receipt date determined pursuant to paragraph (3), the allocation and reservation of a credit, and whether a return has been timely filed for purposes of this subdivision shall not be subject to review in any administrative or judicial proceeding.

(B)A disallowance of a credit due to a determination by the Franchise Tax Board under this subdivision, including the application of the limitation specified in subdivision (b), shall be assessed by the Franchise Tax Board in the same manner as is provided by Section 19051 in the case of a mathematical error appearing on the return.

(d)Unless otherwise specified, the definitions of Sections 17052.13 and 17052.14 shall apply.

(e)The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.

(f) This section shall remain in effect only until December 1, 2030, and as of that date is repealed.

SEC. 5.

For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to the Fire Safe Home Tax Credits Act, the Legislature finds and declares as follows:

(a)The specific goals, purposes, and objectives of the credits are as follows:

(1)To increase wildfire preparedness by providing a tax incentive to property owners that live in fire-prone parts of the state.

(2)To compensate taxpayers for costly mitigation measures that prepare their homes for wildfire season.

(b)To measure whether the Fire Safe Home Tax Credits meet these goals, purposes, and objectives, the Legislative Analyst’s Office shall prepare a written report on the following:

(1)The number of taxpayers claiming either or both of the credits.

(2)The average credit amount claimed on tax returns.

(c)The Legislative Analyst’s Office shall provide the written report required by subdivision (b) to the Senate Committee on Governance and Finance, the Assembly Committee on Revenue and Taxation, and the Assembly Committee on Local Government. A report submitted pursuant to this paragraph shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 6.

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. 7.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.