BILL NUMBER: SB 355AMENDED BILL TEXT AMENDED IN SENATE MAY 7, 2013 AMENDED IN SENATE APRIL 25, 2013 AMENDED IN SENATE APRIL 15, 2013 INTRODUCED BY Senator Beall FEBRUARY 20, 2013 An act to amend Sections 17053.30 and 23630 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST SB 355, as amended, Beall. Conservation: tax credits. The Natural Heritage Preservation Tax Credit Act of 2000 requires the Wildlife Conservation Board to implement a program under which property, as defined, may be contributed to the state, any local government, as defined, or to any nonprofit organization designated by a local government, based on specified criteria, in order to provide for the protection of wildlife habitat, open space, and agricultural lands. The Personal Income Tax Law and the Corporation Tax Law allow a credit against the taxes imposed by those laws in the amount equal to 55% of the fair market value of any qualified contribution, as defined, contributed during the taxable year pursuant to the Natural Heritage Preservation Tax Credit Act of 2000, as provided. This bill would allow for the transfer of the credit allowed pursuant to the Natural Heritage Preservation Tax Credit Act of 2000 by the taxpayer to an unrelated party, as provided. This bill would take effect immediately as a tax levy. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 17053.30 of the Revenue and Taxation Code is amended to read: 17053.30. (a) There shall be allowed as a credit against the "net tax," as defined in Section 17039, an amount equal to 55 percent of the fair market value of any qualified contribution made on or after January 1, 2000, and not later than June 30, 2008, and on or after January 1, 2010, and not later than June 30, 2015, by the taxpayer during the taxable year to the state, any local government, or any designated nonprofit organization, pursuant to Division 28 (commencing with Section 37000) of the Public Resources Code. (b) For purposes of this section, "qualified contribution" means a contribution of property, as defined in Section 37002 of the Public Resources Code, that has been approved for acceptance by the Wildlife Conservation Board pursuant to Division 28 (commencing with Section 37000) of the Public Resources Code. (c) In the case of any pass-thru entity, the fair market value of any qualified contribution approved for acceptance under Division 28 (commencing with Section 37000) of the Public Resources Code shall be passed through to the partners or shareholders of the pass-thru entity in accordance with their interest in the pass-thru entity as of the date of the qualified contribution. For purposes of this subdivision, the term "pass-thru entity" means any partnership, "S" corporation, or limited liability company treated as a partnership. (d) If the credit allowed by this section exceeds the "net tax," the excess may be carried over to reduce the "net tax" in the following year, and the succeeding seven years if necessary, until the credit is exhausted. (e) This credit shall be in lieu of any other credit or deduction which the taxpayer may otherwise claim pursuant to this part with respect to the property or any interest therein that is contributed. (f) (1) Notwithstanding any other law, for each taxable year beginning on or after January 1, 2013, a taxpayer may transfer any credit, in whole or in part, allowed under this section to an unrelated party. (2) At the time the project is under consideration by a department or the Wildlife Conservation Board, the donor shall indicate to the department or the Wildlife Conservation Board, in the form and manner specified by the department or the Wildlife Conservation Board, the donor's interest in transferring the credit, in whole or in part, to an unrelated party. (3) On and after January 1, 2013, the Wildlife Conservation Board shall maintain a list of parties that are interested in acquiring a tax credit pursuant to this subdivision. The Wildlife Conservation Board shall collect all required information necessary for the transfer of the credit, including the social security or other taxpayer identification number of the unrelated party to whom a credit could be transferred and the amount of the tax credit the party is interested in acquiring. (4) As part of the approval process, the Wildlife Conservation Board shall match projects with donors interested in transferring credits with parties interested in acquiring a tax credit. All parties shall agree to any proposed transfer of a tax credit. (5) The Wildlife Conservation Board shall establish procedures as needed, including, but not limited to, the use of an escrow account, for the tax credit to be purchased by the acquiring entity, the donor to receive the payment for the value of the transferred tax credit at the time of project closing, and for a certificate evidencing the tax credit to be given to the unrelated party. The Wildlife Conservation Board shall issue a certificate, in the form and manner specified by the Franchise Tax Board, that shall include all required information regarding the credit. (6) For purposes of this subdivision, "department" has the same meaning as defined in subdivision (d) of Section 37002 of the Public Resources Code. (7) The Wildlife Conservation Board shall not approve a transfer of a credit under this section if the consideration received by the taxpayer in exchange for the credit is less than 90 percent of the value of the credit to be transferred. SEC. 2. Section 23630 of the Revenue and Taxation Code is amended to read: 23630. (a) There shall be allowed as a credit against the "tax," as defined in Section 23036, an amount equal to 55 percent of the fair market value of any qualified contribution made on or after January 1, 2000, and not later than June 30, 2008, and on or after January 1, 2010, and not later than June 30, 2015, by the taxpayer during the taxable year to the state, any local government, or any designated nonprofit organization, pursuant to Division 28 (commencing with Section 37000) of the Public Resources Code. (b) For purposes of this section, "qualified contribution" means a contribution of property, as defined in Section 37002 of the Public Resources Code, that has been approved for acceptance by the Wildlife Conservation Board pursuant to Division 28 (commencing with Section 37000) of the Public Resources Code. (c) In the case of any pass-thru entity, the fair market value of any qualified contribution approved for acceptance under Division 28 (commencing with Section 37000) of the Public Resources Code shall be passed through to the partners or shareholders of the pass-thru entity in accordance with their interest in the pass-thru entity as of the date of the qualified contribution. For purposes of this subdivision, the term "pass-thru entity" means any partnership or "S" corporation. (d) If the credit allowed by this section exceeds the "tax," the excess may be carried over to reduce the "tax" in the following year, and the succeeding seven years if necessary, until the credit is exhausted. (e) This credit shall be in lieu of any other credit or deduction that the taxpayer may otherwise claim pursuant to this part with respect to the property or any interest therein that is contributed. (f) (1) Notwithstanding any other law, for each taxable year beginning on or after January 1, 2013, a taxpayer may transfer any credit, in whole or in part, allowed under this section to an unrelated party. (2) At the time the project is under consideration by a department or the Wildlife Conservation Board, the donor shall indicate to the department or the Wildlife Conservation Board, in the form and manner specified by the department or the Wildlife Conservation Board, the donor's interest in transferring the credit, in whole or in part, to an unrelated party. (3) On and after January 1, 2013, the Wildlife Conservation Board shall maintain a list of parties that are interested in acquiring a tax credit pursuant to this subdivision. The Wildlife Conservation Board shall collect all required information necessary for the transfer of the credit, including the social security or other taxpayer identification number of the unrelated party to whom a credit could be transferred and the amount of the tax credit the party is interested in acquiring. (4) As part of the approval process, the Wildlife Conservation Board shall match projects with donors interested in transferring credits with parties interested in acquiring a tax credit. All parties shall agree to any proposed transfer of a tax credit. (5) The Wildlife Conservation Board shall establish procedures as needed, including, but not limited to, the use of an escrow account, for the tax credit to be purchased by the acquiring entity, the donor to receive the payment for the value of the transferred tax credit at the time of project closing, and for a certificate evidencing the tax credit to be given to the unrelated party. The Wildlife Conservation Board shall issue a certificate, in the form and manner specified by the Franchise Tax Board, that shall include all required information regarding the credit. (6) For purposes of this subdivision, "department" has the same meaning as defined in subdivision (d) of Section 37002 of the Public Resources Code. (7) The Wildlife Conservation Board shall not approve a transfer of a credit under this section if the consideration received by the taxpayer in exchange for the credit is less than 90 percent of the value of the credit to be transferred. SEC. 3. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.