Amended  IN  Senate  May 19, 2022
Amended  IN  Senate  April 28, 2022
Amended  IN  Senate  April 18, 2022
Amended  IN  Senate  March 31, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 1266

Introduced by Senator Borgeas

February 18, 2022

An act to add and repeal Sections 17053.49 and 23627 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1266, as amended, Borgeas. Income taxes: credits: designated wildfire zones.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. Existing law requires any 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 allow a credit against those taxes for each taxable year beginning on and on or after January 1, 2023, and before January 1, 2028, in an amount that is equal to 50% of the amount incurred, subject to specified limitations, by a natural person or a small business, as defined, during the taxable year for the purchase of a backup electricity generator or a solar battery for use in a residence or commercial property in a designated wildfire zone, as defined. The bill would define “backup electricity generator” to mean a standby or portable device that can generate at least 10 kilowatts, is designed and manufactured exclusively for the purpose of generating electricity, and complies with applicable air quality standards promulgated by the State Air Resources Board. The bill would provide that the credit is only operative for taxable years for which an appropriation is made for its purposes in the annual Budget Act or other statute. The bill would also 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 17053.49 is added to the Revenue and Taxation Code, to read:
17053.49.

(a)(1)For

17053.49.
 The provisions of this section shall only be operative for taxable years for which an appropriation is made for its purposes in the annual Budget Act or other statute.
(b) (1) For each taxable year beginning on and on or after January 1, 2023, and before January 1, 2028, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to the amount specified in paragraph (2) for a qualified expenditure paid or incurred by the qualified taxpayer during the taxable year.
(2) The amount of the credit allowed pursuant to this section for the taxable year shall be equal to 50 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for a qualified expenditure, subject to the following, as applicable:
(A) If the qualified expenditure is the purchase of a backup electricity generator pursuant to subparagraph (A) of paragraph (4) of subdivision (b), (c), the amount of credit allowed shall not exceed three thousand five hundred dollars ($3,500) per residence or commercial property, per taxable year.
(B) If the qualified expenditure is the purchase of a solar battery pursuant to subparagraph (B) of paragraph (4) of subdivision (b), (c), the amount of credit allowed shall not exceed five thousand dollars ($5,000) per residence or commercial property, per taxable year.

(b)

(c) For purposes of this section:
(1) “Backup electricity generator” means a standby or portable device that meets all of the following requirements:
(A) The device can generate at least 10 kilowatts.
(B) The device is designed and manufactured exclusively for the purpose of generating electricity.
(C) The device complies with applicable air quality standards promulgated by the State Air Resources Board.
(2) “Designated wildfire zone” means territory within a high fire-threat district designated a Tier 3 fire-threat area, as determined by the Public Utilities Commission.
(3) “Qualified taxpayer” means a natural person or a small business that incurs a qualified expenditure.
(4) “Qualified expenditure” means the purchase of one of the following:
(A) A backup electricity generator for use in a residence or commercial property in a designated wildfire zone.
(B) A solar battery for use in a residence or commercial property in a designated wildfire zone. wildfire.
(5) “Small business” means a business that has average annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three taxable years.

(c)

(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, and succeeding six years if necessary, until the credit is exhausted.

(d)

(e) This section shall remain in effect only until December 1, 2028, and as of that date is repealed.

SEC. 2.

 Section 23627 is added to the Revenue and Taxation Code, to read:
23627.

(a)(1)For

23627.
 The provisions of this section shall only be operative for taxable years for which an appropriation is made for its purposes in the annual Budget Act or other statute.
(b) (1) For each taxable year beginning on and on or after January 1, 2023, and before January 1, 2028, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to the amount specified in paragraph (2) for a qualified expenditure paid or incurred by the qualified taxpayer during the taxable year.
(2) The amount of the credit allowed pursuant to this section for the taxable year shall be equal to 50 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for a qualified expenditure, subject to the following, as applicable:
(A) If the qualified expenditure is the purchase of a backup electricity generator pursuant to subparagraph (A) of paragraph (4) of subdivision (b), (c), the amount of credit allowed shall not exceed three thousand five hundred dollars ($3,500) per residence or commercial property, per taxable year.
(B) If the qualified expenditure is the purchase of a solar battery pursuant to subparagraph (B) of paragraph (4) of subdivision (b), (c), the amount of credit allowed shall not exceed five thousand dollars ($5,000) per residence or commercial property, per taxable year.

(b)

(c) For purposes of this section:
(1) “Backup electricity generator” means a standby or portable device that meets all of the following requirements:
(A) The device can generate at least 10 kilowatts.
(B) The device is designed and manufactured exclusively for the purpose of generating electricity.
(C) The device complies with applicable air quality standards promulgated by the State Air Resources Board.
(2) “Designated wildfire zone” means territory within a high fire-threat district designated a Tier 3 fire-threat area, as determined by the Public Utilities Commission.
(3) “Qualified taxpayer” means a natural person or a small business that incurs a qualified expenditure.
(4) “Qualified expenditure” means the purchase of one of the following:
(A) A backup electricity generator for use in a residence or commercial property in a designated wildfire zone.
(B) A solar battery for use in a residence or commercial property in a designated wildfire zone.
(5) “Small business” means a business that has average annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three taxable years.

(c)

(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, and succeeding six years if necessary, until the credit is exhausted.

(d)

(e) This section shall remain in effect only until December 1, 2028, and as of that date is repealed.

SEC. 3.

 (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 objective of Sections 17053.49 and 23627 of the Revenue and Taxation Code, as added by this act, hereafter “the credit,” is to encourage the purchase of backup electricity generators or solar batteries that are necessary to protect the health and safety of residents and businesses in designated wildfire zones.
(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 report to the Legislature on the number of tax returns claiming the credit and the amount of total credits claimed through the 2028 taxable year.

SEC. 4.

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