CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2166

Introduced by Assembly Member Kiley

February 11, 2020

An act to add Section 17052.16 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2166, as introduced, Kiley. Personal income taxes: credits: residential fire insurance policy premiums.
The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law requires any bill authorizing a new tax expenditure, including a tax credit, to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. Existing law establishes the continuously appropriated Tax Relief and Refund Account in the General Fund and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account.
This bill would allow a credit against the taxes imposed by the Personal Income Tax Law for each taxable year beginning on or after January 1, 2020, and before January 1, 2026, in an amount equal to the difference between the annual premium amount paid or incurred during the taxable year by a qualified taxpayer for a residential fire insurance policy for coverage of the qualified principal residence of the qualified taxpayer and the annual premium amount paid or incurred by the qualified taxpayer during a specified threshold calendar year for a residential fire insurance policy for coverage of that same qualified principal residence. The bill would require amounts of this credit in excess of the qualified taxpayer’s tax liability and other amounts due to be paid to the qualified taxpayer from the Tax Relief and Refund Account upon appropriation by the Legislature.
The bill would also include additional information required for any bill authorizing a new income 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 17052.16 is added to the Revenue and Taxation Code, to read:

17052.16.
 (a) For each taxable year beginning on or after January 1, 2020, and before January 1, 2026, there shall be allowed a credit against the “net tax,” as defined in Section 17039, in an amount equal to the difference between the following amounts:
(1) The annual premium amount paid or incurred during the taxable year by a qualified taxpayer for a residential fire insurance policy for coverage of the qualified principal residence of the qualified taxpayer.
(2) The annual premium amount paid or incurred by the qualified taxpayer during the 2016 calendar year for a residential fire insurance policy for coverage of that same qualified principal residence of the qualified taxpayer or the annual premium amount paid or incurred by the qualified taxpayer during the calendar year in which the qualified taxpayer first purchased the residential fire insurance policy for coverage of that same qualified principal residence of the qualified taxpayer, whichever calendar year is later.
(b) For purposes of this section:
(1) “Qualified principal residence” means a single-family residence, whether detached or attached, that is the principal residence of the taxpayer and is eligible for the homeowner’s exemption under Section 218.
(2) “Qualified taxpayer” means a taxpayer who has paid or incurred a premium amount during the taxable year for a residential fire insurance policy for coverage of that taxpayer’s qualified principal residence that is an amount equal to an increase of 5 percent or more above the premium amount paid or incurred by that taxpayer for a residential fire insurance policy for coverage of that same qualified principal residence of the taxpayer during the 2016 calendar year or the calendar year in which the taxpayer first purchased the residential fire insurance policy for coverage of that same qualified principal residence of the taxpayer, whichever calendar year is later.
(3) “Residential fire insurance policy” means a residential fire insurance policy subject to Chapter 2 (commencing with Section 2030) of Part 1 of Division 2 of the Insurance Code for coverage of the qualified principal residence of the qualified taxpayer.
(c) If the amount allowable as a credit under subdivision (a) exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Tax Relief and Refund Account and refunded to the qualified taxpayer upon appropriation by the Legislature.
(d) This credit shall be in lieu of any other credit or deduction that the qualified taxpayer may otherwise be allowed pursuant to this part with respect to amounts taken into account under this section in calculating the credit allowed by this section.
(e) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.

SEC. 2.

 (a) For the purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares the following:
(1) The goal, purpose, or objection of Section 17052.16 of the Revenue and Taxation Code, as added by this act, hereafter “the credit,” is to make property owners whole from unexpected premium increases in residential fire insurance policies that result in unaffordable policies.
(2) The performance indicator for the Legislature to use when measuring whether the credit meets the goal, purpose, or objective specified in paragraph (1) is how many taxpayers are allowed the credits.
(b) Notwithstanding Section 19542 of the Revenue and Taxation Code, the Franchise Tax Board shall annually publish data on its internet website on the number of taxpayers that are allowed the credit.

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.