Policy & Legislation
Options Being Explored for Tax Credit Bill
June 17, 2009
Senate Appropriations Committee held Senator Lowenthal's SB 16 on its "Suspense File" in late May, much to the surprise of the author and advocates. Now, Housing California, Community Economics, and the author are now exploring options to revive it.
SB 16 would allow recipients of Low Income Housing Tax Credits to claim the credits as refundable if the amount of the credits exceeds their tax liability. Although fiscally neutral over eight years, the bill shifts the time frame in which credits are claimed. The Franchise Tax Board estimates the bill would reduce General Fund revenues in 2012-17 and increase them by a corresponding amount in 2017-20.
In ordinary years, this "cost-shifting" probably would not have halted the bill's progress. However, facing a record deficit, legislature leaders took a sharp ax to almost all fiscal bills this year.
The author and proponents are working with fiscal committee staff to reduce the cost-shifting. If we are successful, SB 16 will be resurrected in the second house in the coming weeks.
A second provision in the bill -- allowing state credits awarded last year to be sold separately from federal credits -- has been amended into SB 622, also by Senator Lowenthal. SB 622 passed Senate Revenue and Taxation Committee last week.
Contact Julie Snyder, 916.447.0503 x102 or .
