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AB-533 Income taxes: exclusion: turf removal water conservation program.(2019-2020)

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Date Published: 04/04/2019 09:00 PM
AB533:v97#DOCUMENT

Amended  IN  Assembly  April 04, 2019
Amended  IN  Assembly  March 19, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 533

Introduced by Assembly Member Holden
(Principal coauthor: Senator Wiener)
(Coauthor: Assembly Member Friedman)

February 13, 2019

An act to add and repeal Sections 17139.9 and 24308.9 amend Sections 17138.2 and 24308.2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 533, as amended, Holden. Income taxes: exclusion: water conservation or efficiency programs: water runoff management improvement programs. turf removal water conservation program.
The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. Existing law, for taxable years beginning on or after January 1, 2014, and before January 1, 2019, excludes from gross income under both laws any amount received as a rebate, voucher, or other financial incentive issued by a local water agency or supplier for participation in a turf removal water conservation program. Existing law limits the collection and use of taxpayer information and provides that any unauthorized use of this information is punishable as a misdemeanor.
This bill, for taxable years beginning on or after January 1, 2019, and before January 1, 2024, would provide an exclusion from gross income for any amount received as a rebate, voucher, or other financial incentive issued by a water service provider for any water conservation or efficiency program or water runoff management improvement program, as provided. bill would extend the operative date of the provisions excluding from gross income specified amounts received in a turf removal water conservation program to taxable years beginning before January 1, 2024. The bill would require the Department of Finance to include an analysis of these exclusions in its annual tax expenditure report provided to the Legislature and further provides that taxpayer information collected pursuant to this requirement is subject to the limitation on the collection and use of that information.
By expanding the scope of a crime, 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 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 17139.9 is added to the Revenue and Taxation Code, to read:
17139.9.

(a)For taxable years beginning on or after January 1, 2019, and before January 1, 2024, gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by a water service provider for any water conservation or efficiency program the primary purpose of which is to reduce consumption of water or to improve the management of water demand.

(b)For taxable years beginning on or after January 1, 2019, and before January 1, 2024, gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by a water service provider for any water runoff management improvement program the primary purpose of which is to reduce the amount or manage the quality of storm water runoff.

(c)For purposes of this section, “water service provider” means any entity providing water service, including, but not limited to, a local or regional retail or wholesaler water agency.

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

SEC. 2.Section 24308.9 is added to the Revenue and Taxation Code, to read:
24308.9.

(a)For taxable years beginning on or after January 1, 2019, and before January 1, 2024, gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by a water service provider for any water conservation or efficiency program the primary purpose of which is to reduce consumption of water or to improve the management of water demand.

(b)For taxable years beginning on or after January 1, 2019, and before January 1, 2024, gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by a water service provider for any water runoff management improvement program the primary purpose of which is to reduce the amount or manage the quality of storm water runoff.

(c)For purposes of this section, “water service provider” means any entity providing water service, including, but not limited to, a local or regional retail or wholesaler water agency.

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

SECTION 1.

 Section 17138.2 of the Revenue and Taxation Code is amended to read:

17138.2.
 (a) For taxable years beginning on or after January 1, 2014, and before January 1, 2019, 2024, gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by a local water agency or supplier for participation in a turf removal water conservation program.
(b) This section shall remain in effect only until December 1, 2019, 2024, and as of that date is repealed.

SEC. 2.

 Section 24308.2 of the Revenue and Taxation Code is amended to read:

24308.2.
 (a) For taxable years beginning on or after January 1, 2014, and before January 1, 2019, 2024, gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by a local water agency or supplier for participation in a turf removal water conservation program.
(b) This section shall remain in effect only until December 1, 2019, 2024, and as of that date is repealed.

SEC. 3.

 (a) The Legislature finds and declares all of the following:
(1) Utility-sponsored financial incentives, including consumer rebates, are among the most important and cost-effective tools available to local water providers to achieve water use efficiency objectives, particularly for turf replacement, irrigation controllers, leak detection devices, and other high-cost water saving options. Local public utilities are using incentive programs to encourage local property owners to manage storm water onsite, thus reducing urban flooding, improving water quality, and increasing water supplies.
(2) Rebates, vouchers, or other financial incentives issued by local water agencies or suppliers have been an effective tool in advancing efficiency and water management objectives statewide, and individual consumers and businesses should not be taxed for providing this statewide benefit.
(3) Financial incentives issued by a local water agency or supplier as part of a water conservation or efficiency program, the primary purpose of which is to reduce consumption of water or to improve the management of water demand, provide a significant public benefit. Financial incentives issued by a local water agency or supplier as part of a water runoff management improvement program, the primary purpose of which is to reduce the amount or manage the quality of storm water runoff, provide a significant public benefit.
(4) The income tax exclusions allowed by Sections 17139.9 17138.2 and 24308.9 24308.2 of the Revenue and Taxation, Taxation Code, as added amended by this act, have the objective of eliminating disincentives to participation in water conservation or efficiency and storm water runoff management improvement programs aimed at increasing water conservation or efficiency or improving storm water quality in California.
(b) (1) To enable the Legislature to determine whether the tax expenditures allowed by this act are meeting, failing to meet, or exceeding the objective of the act, the Department of Finance shall include an analysis of these tax expenditures in the annual report required pursuant to Section 13305 of the Government Code.
(2) Taxpayer information collected pursuant to this subdivision is subject to Section 19542 of the Revenue and Taxation Code.

SEC. 4.

 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. 5.

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