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AB-1510 Income taxes credit: seismic retrofits.(2013-2014)



Current Version: 05/15/14 - Amended Assembly

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AB1510:v96#DOCUMENT

Amended  IN  Assembly  May 15, 2014
Amended  IN  Assembly  May 01, 2014
Amended  IN  Assembly  April 01, 2014

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 1510

Introduced by Assembly Member Nazarian

January 14, 2014

An act to add and repeal Sections 17052.9 and 23605 to of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1510, as amended, Nazarian. Income taxes credit: seismic retrofits.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would allow, for taxable years beginning on or after January 1, 2015, and before January 1, 2020, a tax credit under both laws in an amount equal to 30% of the qualified costs paid or incurred by a qualified taxpayer for any seismic retrofit construction on a qualified building, as defined. This bill would require a taxpayer to obtain a certification from the appropriate jurisdiction with authority for building code enforcement of the area in which the building is located that the building is an at-risk property, as defined, and to provide that certification to the Franchise Tax Board upon the request of the Franchise Tax Board.
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 17052.9 is added to the Revenue and Taxation Code, to read:

17052.9.
 (a) For each taxable years year beginning on or after January 1, 2015, and before January 1, 2020, there shall be allowed to a qualified taxpayer a credit against the “net tax,” as defined in Section 17039, in an amount equal to 30 percent of the qualified taxpayer’s qualified costs.
(b) For purposes of this section:
(1) “At-risk property” means a building that is deemed hazardous and in danger of collapse in the event of a catastrophic earthquake, including, but not limited to, soft story buildings, nonductile concrete residential buildings, and pre-1980 pre-1994 concrete residential buildings.
(2) “Qualified building” means a building that has been certified as an at-risk property by the local housing authority for the area within which the building is located.
(3) “Qualified costs” means the costs paid or incurred by the qualified taxpayer for any seismic retrofit construction on a qualified building, including any engineering or architectural work preceding the construction. “Qualified costs” shall does not include ordinary either of the following:
(A) The costs paid or incurred by the qualified taxpayer for ordinary repair or replacement of existing fixtures or items on or in the qualified building.
(B) Any amount paid by the qualified taxpayer to the jurisdiction with authority for building code enforcement for issuing the certification required pursuant to subparagraph (A) of paragraph (1) of subdivision (c).
(4) “Qualified taxpayer” means a taxpayer that is an owner of a qualified building located in this state. A taxpayer that owns a proportional share of a qualified building in this state may claim the credit allowed by this section based on the taxpayer’s share of the qualified costs.
(5) (A) “Seismic retrofit construction” means changes or additions to the structure of a qualified building to mitigate seismic damage, including:
(i) Anchoring the structure to the foundation.
(ii) Bracing cripple walls.
(iii) Bracing hot water heaters.
(iv) Installing automatic gas shutoff valves.
(v) Repairing or reinforcing the foundation to improve the integrity of the foundation against seismic damage.
(vi) Anchoring fuel storage.
(vii) Installing an earthquake-resistant bracing system for mobilehomes that is certified by the California Department of Housing and Community Development.
(B) “Seismic retrofit construction” does not include construction activities performed solely to bring a qualified building into compliance with standard local building codes.
(c) To be eligible for the credit under this section, the following must apply:
(1) The qualified taxpayer shall do both of the following:
(A) Obtain certification from the appropriate jurisdiction with authority for building code enforcement, upon a review of the building, that the building is an at-risk property. Upon the request of the Franchise Tax Board, the qualified taxpayer shall provide a copy of the certification to the Franchise Tax Board.
(B) Retain for his or her records a copy of the certification specified in subparagraph (A).
(2) The jurisdiction with authority for building code enforcement in which a qualified building is located has entered into an agreement with the state to provide certifications pursuant to this section and to not seek reimbursement pursuant to Section 6 of Article XIII B of the California Constitution for any costs incurred in providing those certifications.
(d) (1) The credit amount allowed in subdivision (a) shall be claimed by a qualified taxpayer at the rate of one-fifth of the credit amount for the taxable year in which the credit is allocated, and one-fifth of the credit amount for each of the subsequent four taxable years.
(2) In the case where the credit allowed under this section exceeds the “net tax,” as defined in Section 17039, 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.
(e) For purposes of computing the credit provided by this section, the qualified costs shall be reduced by any grant provided by a public entity for the seismic retrofit construction.
(f) This credit shall be in lieu of any other credit or deduction that the qualified taxpayer may otherwise claim pursuant to this part with respect to qualified costs.
(g) This section shall remain in effect only until December 1, 2020, and as of that date is repealed.

SEC. 2.

 Section 23605 is added to the Revenue and Taxation Code, to read:

23605.
 (a) For taxable years beginning on or after January 1, 2015, and before January 1, 2020, there shall be allowed to a qualified taxpayer a credit against the “tax,” as defined in Section 23036, in an amount equal to 30 percent of the qualified taxpayer’s qualified costs.
(b) For purposes of this section:
(1) “At-risk property” means a building that is deemed hazardous and in danger of collapse in the event of a catastrophic earthquake, including, but not limited to, soft story buildings, nonductile concrete residential buildings, and pre-1980 pre-1994 concrete residential buildings.
(2) “Qualified building” means a building that has been certified as an at-risk property by the local housing authority for the area within which the building is located.
(3) “Qualified costs” means the costs paid or incurred by the qualified taxpayer for any seismic retrofit construction on a qualified building, including any engineering or architectural work preceding the construction. “Qualified costs” shall does not include ordinary either of the following:
(A) The costs paid or incurred by the qualified taxpayer for ordinary repair or replacement of existing fixtures or items on or in the qualified building.
(B) Any amount paid by the qualified taxpayer to the jurisdiction with authority for building code enforcement for issuing the certification required pursuant to subparagraph (A) of paragraph (1) of subdivision (c).
(4) “Qualified taxpayer” means a taxpayer that is an owner of a qualified building located in this state. A taxpayer that owns a proportional share of a qualified building in this state may claim the credit allowed by this section based on the taxpayer’s share of the qualified costs.
(5) (A) “Seismic retrofit construction” means changes or additions to the structure of a qualified building to mitigate seismic damage, including:
(i) Anchoring the structure to the foundation.
(ii) Bracing cripple walls.
(iii) Bracing hot water heaters.
(iv) Installing automatic gas shutoff valves.
(v) Repairing or reinforcing the foundation to improve the integrity of the foundation against seismic damage.
(vi) Anchoring fuel storage.
(vii) Installing an earthquake-resistant bracing system for mobilehomes that is certified by the California Department of Housing and Community Development.
(B) “Seismic retrofit construction” does not include construction activities performed solely to bring a qualified building into compliance with standard local building codes.
(c) To be eligible for the credit under this section, the following must apply:
(1) The qualified taxpayer shall do both of the following:
(A) Obtain certification from the appropriate jurisdiction with authority for building code enforcement, upon a review of the building, that the building is an at-risk property. Upon the request of the Franchise Tax Board, the qualified taxpayer shall provide a copy of the certification to the Franchise Tax Board.
(B) Retain for his or her records a copy of the certification specified in subparagraph (A).
(2) The jurisdiction with authority for building code enforcement in which a qualified building is located has entered into an agreement with the state to provide certifications pursuant to this section and to not seek reimbursement pursuant to Section 6 of Article XIII B of the California Constitution for any costs incurred in providing those certifications.
(d) (1) The credit amount allowed in subdivision (a) shall be claimed by a qualified taxpayer at the rate of one-fifth of the credit amount for the taxable year in which the credit is allocated, and one-fifth of the credit amount for each of the subsequent four taxable years.
(2) In the case where the credit allowed under this section exceeds the “tax,” as defined in Section 23036, 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.
(e) For purposes of computing the credit provided by this section, the qualified costs shall be reduced by any grant provided by a public entity for the seismic retrofit construction.
(f) This credit shall be in lieu of any other credit or deduction that the qualified taxpayer may otherwise claim pursuant to this part with respect to qualified costs.
(g) This section shall remain in effect only until December 1, 2020, and as of that date is repealed.

SEC. 3.

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