AB 2922

Bill Subjects

Abstract

Existing state constitutional law governing insurance taxation imposes an annual tax on the gross premiums of an insurer, as defined, doing business in this state at specified rates. The Personal Income Tax Law and the Corporation Tax Law impose taxes upon taxable income for the taxable year, as specified. The Personal Income Tax Law, the Corporation Tax Law, and the law governing the taxation of insurers allow various credits against the taxes imposed by those laws, including a low-income housing tax credit allocated by the California Tax Credit Allocation Committee. This bill would allow a credit against the taxes imposed under the Personal Income Tax Law, the Corporation Tax Law, and the law governing the taxation of insurers (CDC tax credit) for taxable years beginning on or after January 1, 2021, in an amount equal to the applicable credit percentage of the amount of each qualified investment made by the taxpayer during the taxable year to an eligible community development corporation that is certified by the Treasurer to receive an allocation of tax credit pursuant to the Community Development Tax Credit Program established by this bill, not to exceed $20,000,000, if the aggregate amount of qualified investments made by the taxpayer in the taxable year is at least $100,000. This bill would establish the Community Development Tax Credit Program, which would be administered by the Treasurer in collaboration with the Department of Community Services and Development for the purpose of certifying CDC tax credit allocations to eligible community development corporations. The bill would allow an eligible community development corporation that is issued a certification to transfer its allocation of CDC tax credits to taxpayers who make qualified investments to that eligible community development corporation. The bill would require, on or before July 1, 2021, the Department of Community Services and Development to develop and provide forms for, and establish uniform procedures for the submission and review of, applications for an allocation of CDC tax credits to eligible community development corporations. The bill would require the Treasurer, among other things, to accept and evaluate applications in order to certify an allocation of CDC tax credits to an eligible community development corporation, and, beginning with the 2021 calendar year, allocate the CDC tax credits for a current calendar year, in an amount not to exceed $50,000,000 per calendar year, among eligible community development corporations pursuant to specified criteria. This bill would provide that CDC tax credit allocations are to be made by the Treasurer only for those calendar years in which the Legislature increases the aggregate credit amount that may be allocated annually by the California Tax Credit Allocation Committee for the low-income housing tax credits by $50,000,000 or more for the calendar year by legislation enacted after January 1, 2020, and reserves that additional allocation amount for CDC tax credits. The bill would provide that the CDC tax credits allowed for a taxable year is zero unless the Legislature acts in the above-described manner. Existing law requires any bill authorizing a new tax expenditure, including a tax credit under the Personal Income Tax Law or the Corporation Tax Law, 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 state the intent of the Legislature to enact legislation that would comply with those new tax expenditure requirements. This bill would take effect immediately as a tax levy.