AB 346 — Income tax credits: low-income housing: California Debt Limit Allocation Committee rulemaking.

Summary

(1) Existing federal law prescribes a volume ceiling on the aggregate amount of private activity bonds that may be issued in a state. Existing law creates the California Debt Limit Allocation Committee (CDLAC) for the purpose of administering the volume limit for the state on private activity bonds through an allocation system. Existing law authorizes CDLAC to adopt, amend, or repeal rules and regulations as emergency regulations in accordance with the rulemaking provisions of the Administrative Procedure Act. This bill, instead, would authorize CDLAC to adopt, amend, or repeal rules and regulations without complying with the procedural requirements of the Administrative Procedures Act, except as specified. The bill would make rules and regulations adopted, amended, or repealed by CDLAC effective immediately upon adoption. The bill would provide that these provisions would remain operative only until January 1, 2029, and as of that date would revert to existing law. (2) Existing law establishes a low-income housing tax credit program pursuant to which the California Tax Credit Allocation Committee (CTCAC) provides procedures and requirements for the allocation, in modified conformity with federal law, of state insurance, personal income, and corporation tax credit amounts to qualified low-income housing projects that have been allocated, or qualify for, a federal low-income housing tax credit, and farmworker housing. Existing law limits the total annual amount of the state low-income housing credit for which a federal low-income housing credit is required to the sum of $70,000,000, as increased by any percentage increase in the Consumer Price Index for the preceding calendar year, any unused credit for the preceding calendar years, and the amount of housing credit ceiling returned in the calendar year. Existing law provides for an additional allocation of $500,000,000 in low-income housing tax credits for the 2020 calendar year and up to $500,000,000 for the 2021 calendar year and thereafter. Existing law provides that the additional amount for the 2021 calendar year and thereafter is available only if the Budget Act or related legislation specifies an amount available for allocation. Existing law authorizes CTCAC to allocate up to $200,000,000 of this amount for housing financed by the California Housing Finance Agency (CalHFA) under its Mixed-Income Program. Existing law makes a housing sponsor receiving a nonfederally subsidized allocation ineligible for receipt of this increased housing credit allocation. This bill would, for any calendar year in which CDLAC has declared a competition for the award of tax-exempt bond authority for qualified residential rental projects, authorize CTCAC to allocate some or all of the additional credit amount, other than credits allocated for housing financed by CalHFA under these provisions, to nonfederally subsidized buildings and require CTCAC to allocate the remainder for new buildings, as defined by specified federal law, that are federally subsidized and can begin construction within a reasonable time as determined by the California Tax Credit Allocation Committee. For any calendar year in which CDLAC has not declared a competition for the award of tax-exempt bond authority for qualified residential rental projects, the bill would require a project receiving an award of credits from the additional credit allocation to begin construction within a reasonable time as determined by the California Tax Credit Allocation Committee. The bill would, if there are credits still available after the final allocation round in a calendar year, allow the CTCAC to allocate some or all of the remaining credits for nonfederally subsidized buildings, as specified. (3) For purposes of determining the amount of low-income housing tax credit allocated under the above-described provisions, existing law defines various terms, including the term "applicable percentage." In the case of any qualified low-income building that receives an allocation of the $70,000,000 credit amount available under existing law and meets specified additional criteria, existing law defines "applicable percentage" to mean 30% for each of the first 3 years and 5% for the 4th year. This bill would revise the above-described definition of "applicable percentage" to delete the limitation that the qualified low-income building receive an allocation of the $70,000,000 credit amount available under existing law, thereby applying this definition to any qualified low-income building that meets the above-described criteria. (4) Existing law requires CTCAC to certify to a housing sponsor the amount of credit allocated to the housing sponsor, and requires the taxpayer to attach a copy of this certification to any return claiming the credit. This bill would allow a taxpayer to claim the credit commencing in the year the building is placed in service and the federal credit period commences notwithstanding that CTCAC has not certified the amount of the tax credit. The bill would prohibit the taxpayer from claiming an amount of credit that exceeds the lesser of the applicable percentage multiplied by the qualified basis of the building set forth in the preliminary reservation or the amount of credit for which the project is eligible as certified in the "taxpayer certification," which the bill would define for these purposes as the certification by the certified public accountant of the taxpayer who originally received the preliminary reservation of credits. The bill would authorize CTCAC to review taxpayer certifications, as specified. In the event CTCAC issues a certification that is inconsistent with the taxpayer certification, the bill would require the taxpayer to amend any previously filed tax returns as needed to reflect the credit amount certified by CTCAC. The bill would apply these provisions for taxable years beginning on or after January 1, 2023. This bill would make technical and conforming changes to the low-income housing tax credit program. (5) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. (6) This bill would incorporate additional changes to Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code proposed by AB 1439 to be operative only if this bill and AB 1439 are enacted and this bill is enacted last.

Bill Text

• Chaptered 10/11/23 - Chaptered Current pdf October 11, 2023
• Enrolled 09/18/23 - Enrolled pdf September 18, 2023
• Amended 09/07/23 - Amended Senate pdf September 07, 2023
• Amended 07/13/23 - Amended Senate pdf July 13, 2023
• Amended 07/03/23 - Amended Senate pdf July 03, 2023
• Introduced 01/31/23 - Introduced pdf January 31, 2023
• AB346 View text html

Action History

1. October 11, 2023

   Chaptered by Secretary of State - Chapter 739, Statutes of 2023.

2. October 11, 2023

   Approved by the Governor.

3. September 20, 2023

   Enrolled and presented to the Governor at 4 p.m.

4. September 13, 2023

   Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 79. Noes 0. Page 3349.).

5. September 12, 2023

   In Assembly. Concurrence in Senate amendments pending.

6. September 12, 2023

   Read third time. Passed. Ordered to the Assembly. (Ayes 36. Noes 0. Page 2634.).

7. September 11, 2023

   Read second time. Ordered to third reading.

8. September 07, 2023

   Read third time and amended. Ordered to second reading.

9. September 05, 2023

   Read second time. Ordered to third reading.

10. September 01, 2023

    From committee: Do pass. (Ayes 6. Noes 0.) (September 1).

11. August 14, 2023

    In committee: Referred to APPR suspense file.

12. July 13, 2023

    Read second time and amended. Re-referred to Com. on APPR.

13. July 13, 2023

    From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (July 12).

14. July 06, 2023

    Measure version as amended on July 3 corrected.

15. July 03, 2023

    From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on GOV. & F.

16. June 21, 2023

    From committee: Do pass and re-refer to Com. on GOV. & F. (Ayes 10. Noes 0.) (June 20). Re-referred to Com. on GOV. & F.

17. June 14, 2023

    Referred to Coms. on HOUSING and GOV. & F.

18. June 01, 2023

    In Senate. Read first time. To Com. on RLS. for assignment.

19. May 31, 2023

    Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0. Page 1970.)

20. May 18, 2023

    Read second time. Ordered to third reading.

21. May 18, 2023

    From committee: Do pass. (Ayes 13. Noes 0.) (May 18).

22. May 10, 2023

    In committee: Set, first hearing. Referred to APPR. suspense file.

23. April 25, 2023

    From committee: Do pass and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (April 24). Re-referred to Com. on APPR.

24. April 24, 2023

    In committee: Set, first hearing. Referred to REV. & TAX. suspense file.

25. April 19, 2023

    From committee: Do pass and re-refer to Com. on REV. & TAX. (Ayes 7. Noes 0.) (April 19). Re-referred to Com. on REV. & TAX.

26. April 11, 2023

    In committee: Hearing postponed by committee.

27. April 10, 2023

    Re-referred to Coms. on H. & C.D. and REV. & TAX. pursuant to Assembly Rule 96.

28. February 09, 2023

    Referred to Coms. on REV. & TAX. and H. & C.D.

29. February 01, 2023

    From printer. May be heard in committee March 3.

30. January 31, 2023

    Read first time. To print.

Sponsors

• Sharon Quirk-Silva · Primary

Votes

Subjects