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AB-926 Income taxes: credits: affordable housing.(2023-2024)

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Date Published: 05/03/2023 09:00 PM
AB926:v95#DOCUMENT

Amended  IN  Assembly  May 03, 2023
Amended  IN  Assembly  April 24, 2023
Amended  IN  Assembly  April 13, 2023
Amended  IN  Assembly  March 16, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 926

Introduced by Assembly Member Papan

February 14, 2023

An act to add and repeal Sections 17057.7 and 23610.7 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 926, as amended, Papan. Income taxes: credits: affordable housing.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2024, and before January 1, 2029, in an amount equal to 25% of the value of qualified land or property donated to a qualified nonprofit organization by an employer during the taxable year for the construction of affordable housing, as defined. The bill would limit the amount of credits allocated to an aggregate of $10,000,000, and the credits would be allocated on a first-come-first-served basis.
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.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 17057.7 is added to the Revenue and Taxation Code, to read:

17057.7.
 (a) For each taxable year beginning on or after January 1, 2024, and before January 1, 2029, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 25 percent of the value of qualified land or property donated to a qualified nonprofit organization by an employer during the taxable year for the construction of affordable housing.
(b) For purposes of this section:
(1) “Affordable housing” means housing developments in which 25 percent or more of the dwelling units may be purchased or rented, with or without government assistance, on a basis that is affordable to persons or families of low or moderate income, as defined in Section 50093 of the Health and Safety Code, and to which employees of the taxpayer who are individuals of low income have first priority to purchase or rent.
(2) “Qualified land or property” means land or property that is deed restricted to ensure that the affordable housing units, if rented, shall be made available to individuals and families of low income for a period of 55 years or more or if the units are owned and deed restricted to ensure the continued affordability of all affordable ownership units for a period of 45 years.
(3) “Qualified nonprofit organization” means a nonprofit charitable organization exempt from federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code that constructs affordable housing.
(c) The aggregate amount of credits that may be allocated in any fiscal year pursuant to this section and Section 23610.7 shall be ten million dollars ($10,000,000), and these credits shall be allocated on a first-come-first-served basis.
(d) 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.
(e) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(f) (1) For the purpose of complying with Section 41, as it relates to the credit allowed pursuant to this section and Section 23610.7, the Legislature finds and declares as follows:
(A) The specific goal, purpose, or objective of the credit allowed by this section and Section 23610.7 is to encourage employers to contribute to solving the labor shortage and housing unaffordability problems by providing a tax incentive.
(B) The performance indicators for the Legislature to use in determining whether the credit achieves the stated goal shall be the number of taxpayers allowed a credit and credit, the total dollar value of credits allowed. allowed, and the number of affordable housing units that are constructed by a nonprofit organization as a result of this credit.
(2) (A) The Franchise Tax Board shall submit a report by November 1, 2026, and annually thereafter, to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23610.7 for the most recent taxable year, and the total dollar value of credits allowed. allowed, and the number of affordable housing units that are constructed by a nonprofit organization as a result of this credit.
(B) The disclosure provisions of this paragraph shall be treated as an exception to Section 19542.
(g) This section shall remain operative until December 1, 2029, and as of that date is repealed.

SEC. 2.

 Section 23610.7 is added to the Revenue and Taxation Code, to read:

23610.7.
 (a) For each taxable year beginning on or after January 1, 2024, and before January 1, 2029, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to 25 percent of the value of qualified land or property donated to a qualified nonprofit organization by an employer during the taxable year for the construction of affordable housing.
(b) For purposes of this section:
(1) “Affordable housing” means housing developments in which 25 percent or more of the dwelling units may be purchased or rented, with or without government assistance, on a basis that is affordable to persons or families of low or moderate income, as defined in Section 50093 of the Health and Safety Code, and to which employees of the taxpayer who are individuals of low income have first priority to purchase or rent.
(2) “Qualified land or property” means land or property that is deed restricted to ensure that the affordable housing units, if rented, shall be made available to individuals and families of low income for a period of 55 years or more or if the units are owned and deed restricted to ensure the continued affordability of all affordable ownership units for a period of 45 years.
(3) “Qualified nonprofit organization” means a nonprofit charitable organization exempt from federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code that constructs affordable housing.
(c) The aggregate amount of credits that may be allocated in any fiscal year pursuant to this section and Section 17057.7 shall be ten million dollars ($10,000,000), and these credits shall be allocated on a first-come-first-served basis.
(d) 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.
(e) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(f) For the purpose 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 17057.7.
(g) This section shall remain operative until December 1, 2029, and as of that date is repealed.

SEC. 3.

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