On December 7, the first day of the California Legislature’s 2021-22 Session, Assembly Members Luz Rivas and David Chiu introduced AB 71, which would create a “statewide homelessness solutions program.” Currently, the bill is a statement of legislative intent. However, it makes clear some of the tax increase changes it will propose once substantive amendments are made to the bill.
AB 71 would state the intent of the Legislature to enact legislation to create a comprehensive, statewide homelessness solutions program. In addition, AB 71 would create the Bring California Home Fund in the State Treasury for the purpose of providing at least $2,400,000 annually to fund a comprehensive, statewide homeless solutions program upon appropriation by the Legislature. And, AB 71 would require the Bring California Home Fund to contain revenues derived from specified changes to the Personal Income Tax Law or the Corporation Tax Law that are enacted on or after the effective of the date of this bill.
In Section One of the bill, it makes eight legislative findings and declarations. Over 150,000 persons have experienced homelessness in California, with African Americans being disproportionately represented in that population. Also, “Homeless is a statewide crisis in California which requires a statewide, comprehensive solution that meets its scale.” As a result, it is the Legislature’s intent to “create a comprehensive, statewide homelessness solutions program.”
In addition, it is “the intent of the Legislature to enact legislation to fund this comprehensive program with new, ongoing revenues of at least $2.4 billion per year.”
In Section Two of the bill, the “Bring California Home Fund” would be created in the State Treasury for the purpose of providing at least two million four hundred thousand dollars ($2,400,000) annually to fund a comprehensive, statewide homeless solutions program upon appropriation by the Legislature.
The revenues to go into this fund would be derived from changes to California tax laws, including the following:
- An increase in the personal income tax on incomes over one million dollars ($1,000,000).
- An increase in the corporate income tax to historical rates, a more progressive corporate income tax, and conformity with the federal Tax Cuts and Jobs Act, including the inclusion of Global Intangible Low-Taxed Income (GILTI).
- Eliminating or limiting corporate tax loopholes, including the water’s edge election.
- Marking to market unrealized capital gains and the repeal of stepped-up in basis of inherited assets.
AB 71 is likely to be heard in its first policy committee in March 2021.
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