The Personal Income Tax Law allows various credits against the taxes imposed by that law.

This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, in an amount equal to the amount paid or incurred, not to exceed $250, during the taxable year for the purchase and installation of a security surveillance system at the taxpayers primary single-family residence located in the state.

Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.

This bill would include findings and reporting requirements in compliance with this requirement.

This bill would take effect immediately as a tax levy.

The Personal Income Tax Law allows various credits against the taxes imposed by that law.

This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, in an amount equal to the amount paid or incurred, not to exceed $250, during the taxable year for the purchase and installation of a security surveillance system at the taxpayers primary single-family residence located in the state.

Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.

This bill would include findings and reporting requirements in compliance with this requirement.

This bill would take effect immediately as a tax levy.

Date of Hearing: April 29, 2024

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Jacqui Irwin, Chair

ABPCA Bill Id:AB 2219 (

Author:Wallis) – As Amended Ver:April 22, 2024

SUSPENSE

Majority vote. Tax levy. Fiscal committee.

SUBJECT: Personal income tax: credit: home security surveillance

SUMMARY: Allows, under the Personal Income Tax (PIT) Law, a credit of up to $250 for a taxpayer that has purchased a "security surveillance system", as specified. Specifically, this bill:

1. Allows, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, a credit equal to the amount paid or incurred by a taxpayer during the taxable year to purchase and install a "security surveillance system" for their "qualified residence".
2. Provides that the maximum credit amount in any taxable year shall not exceed $250 and that only one credit may be claimed for each "qualified residence" in the taxable year.
3. Allows any unused credit amounts to be carried forward and applied to subsequent taxable years until the credit is exhausted.
4. Defines the following terms:
   1. "Primary residence" is equivalent to the "principal residence", as used in Article XIII of the California Constitution, Section 3, subdivision (k).
   2. "Security surveillance system" is any video, audio, or photographic recording devices installed for the purpose of surveilling or recording activity occurring at the qualified residence; and,
   3. "Qualified residence" is a single-family residence located in the state that is the taxpayer's primary residence.
5. Finds and declares the following for the purposes of satisfying the requirements of Revenue and Taxation Code (R&TC) Section 41:
   1. The specific goals, purposes, and objectives of this bill are to assist California residents in affording the cost of a home security camera, which can help deter property crime, allow residents to monitor their homes for natural disasters, and improve residents' overall sense of security; and,
   2. To measure whether this bill achieves its intended purpose, the Franchise Tax Board (FTB) shall prepare a written report summarizing the number of taxpayers claiming the credit.
6. Requires the FTB to provide the written report required by this bill to the Legislature by June 30, 2027 and annually thereafter.
7. Takes immediate effect as a tax levy.
8. Sunsets the credit's statutory provisions on December 1, 2030.

EXISTING LAW:

1. Allows various tax credits under the PIT Law and the Corporation Tax (CT) Law. These credits are generally designed to encourage socially beneficial behavior or to provide relief to taxpayers who incur specified expenses.
2. Allows, under the CT Law, a credit for certain qualifying expenses, including safety-related equipment, for eligible "high road cannabis employers", as specified. (R&TC Section 23664).
3. Requires any bill authorizing a new credit to contain all of the following:
   1. Specific goals, purposes, and objectives that the tax credit will achieve;
   2. Detailed performance indicators for the Legislature to use when measuring whether the tax credit meets the goals, purposes, and objectives stated in the bill; and,
   3. Data collection requirements to enable the Legislature to determine whether the tax credit is meeting, failing to meet, or exceeding those specific goals, purposes, and objectives. The requirements shall include the specific data and baseline measurements to be collected and remitted in each year the credit is in effect, for the Legislature to measure the change in performance indicators, and the specific taxpayers, state agencies, or other entities required to collect and remit data. (R&TC Section 41.)

FISCAL EFFECT: The FTB estimates General Fund revenue losses of $260 million in fiscal year (FY) 2025-26 and $250 million in FY 2026-27.

COMMENTS:

1. The author has provided the following statement in support of this bill:

AB 2219 will allow residents in single-family homes to claim up to $250 in tax credits on home security cameras to deter property crime, allow residents to monitor their homes in the event of a natural disaster with decreased financial burden, and improve the overall sense of safety for California families. AB 2219 will make home security more affordable for Californians at a minor cost to the state.

1. In opposition to this bill, the Electronic Frontier Foundation notes, in part:

The California Constitution guarantees a right to privacy. Yet that privacy is under threat, including through the increased use of privately operated surveillance cameras that capture movements throughout our neighborhoods. The mass existence of doorbell cameras, whether subsidized and organized into registries by cities, or connected and centralized through other technologies, threaten civil liberties, and exacerbate racial discrimination by enabling unnecessary surveillance.

1. Committee Staff Comments:
   1. What is a "tax expenditure"? Existing law provides various credits, deductions, exclusions, and exemptions for particular taxpayer groups. In the late 1960s, U.S. Treasury officials began arguing that these features of the tax law should be referred to as "expenditures" since they are generally enacted to accomplish some governmental purpose and there is a determinable cost associated with each (in the form of foregone revenues).

As the Department of Finance notes in its annual Tax Expenditure Report, there are several key differences between tax expenditures and direct expenditures. First, tax expenditures are typically reviewed less frequently than direct expenditures. Second, there is generally no control over the amount of revenue losses associated with any given tax expenditure. Finally, it should also be noted that, once enacted, it takes a two-thirds vote to rescind an existing tax expenditure absent a sunset date. This effectively results in a "one-way ratchet" whereby tax expenditures can be conferred by majority vote, but cannot be rescinded, irrespective of their efficacy or cost, without a supermajority vote.

• 1. What problem is this bill attempting to solve? According to the author, this bill is intended to lower the costs for residents who reside in single-family homes that purchase and install home security surveillance systems. These systems, the author argues, can deter property crime, provide a greater sense of safety, and allow residents to monitor their homes remotely during natural disasters.
  2. Who would benefit? Typically, tax credits are provided as a matter of legislative grace to encourage taxpayers to behave in ways they might not absent a financial incentive. As currently drafted, this credit is not limited based on a taxpayer's income. The Committee may wish to consider whether restricting the availability of the credit to middle- and lower income taxpayers would better ensure that this credit benefits those who might otherwise have difficulty affording a home security surveillance system.
  3. Potential privacy implications: While home surveillance systems provide peace of mind and capture evidence that could aid criminal investigations, the mass proliferation of this technology also raises important privacy considerations. For example, when cameras are placed inside a home, it is important to ensure that unauthorized individuals do not somehow gain access to the footage. To help address such concerns, California has enacted minimum-security requirements for internet-connected devices so that consumers can better protect themselves and their privacy.
     
  4. Committee's tax expenditure policy: Both R&TC Section 41 and Committee policy require any tax expenditure bill to outline specific goals, purposes, and objectives that the tax expenditure will achieve, along with detailed performance indicators for the Legislature to use when measuring whether the tax expenditure meets those stated goals, purposes, and objectives.  A tax expenditure bill will not be eligible for a Committee vote unless it has complied with these requirements. 

In its current form, this bill states that the credit is designed to assist California residents in affording the cost of a home security camera, which can help deter property crime, allow residents to monitor their homes for natural disasters, and improve residents' overall sense of security.

In addition to the R&TC Section 41 requirements, this Committee's policy also requires that all tax expenditure proposals contain an appropriate sunset provision to be eligible for a vote.  According to this policy, an "appropriate sunset provision" means five years, except in the case of a tax expenditure measure providing relief to California veterans, in which case "appropriate sunset provision" shall mean ten years.  This bill, as currently drafted, complies with the Committee's policy on sunset dates.

• 1. Technical considerations:
     1. As currently drafted, this bill does not define "primary residence". The absence of a definition or cross-reference to existing law may lead to taxpayer confusion and difficulty administering this credit.
     2. As currently drafted, this bill's definition of "security surveillance system" is rather broad and may include related technologies like baby monitors or other photo and video equipment that does not provide any security benefit.
  2. Related legislation: AB 582 (Connolly) would have allowed a credit for seniors residing in high or very high-risk fire zones who incur costs relating to fire-resistant home improvements, as specified. AB 582 was held on the Assembly Appropriations' Suspense File.
  3. Prior legislation:
     1. AB 324 (Choi), of the 2021-22 Legislative Session, would have allowed a tax credit for qualified taxpayers that install an attic vent closure in a residential property, as specified. AB 324 was held on the Assembly Appropriations' Suspense File.
     2. AB 266 (Choi), of the 2019-20 Legislative Session, was substantially similar to AB 324 and was held on the Assembly Appropriations' Suspense File.
     3. AB 54 (Steinorth), of the 2017-18 Legislative Session, would have provided a deduction of up to $500 for the purchase and installation of a security fence, security alarm system, or a security surveillance system at a residence in California. AB 54 was held on the Assembly Appropriations Committee's Suspense File.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

ACLU California Action

AFSCME CA

California Federation of Teachers AFL-CIO

California Teachers Association

Electronic Frontier Foundation

Oakland Privacy

Analysis Prepared by: Wesley Whitaker / REV. & TAX. / (916) 319-2098

Date of Hearing: March 11, 2024

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Jacqui Irwin, Chair

ABPCA Bill Id:AB 2219 (

Author:Wallis) – As Introduced Ver:February 7, 2024


Majority vote. Tax levy. Fiscal committee.

SUBJECT: Personal income tax: credit: home security surveillance

SUMMARY: Allows, under the Personal Income Tax (PIT) Law, a credit of up to $250 for a taxpayer that has purchased a "security surveillance system", as specified. Specifically, this bill:

1. Allows, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, a credit equal to the amount paid or incurred by a taxpayer during the taxable year to purchase and install a "security surveillance system" for their "qualified residence".
2. Provides that the maximum credit amount in any taxable year shall not exceed $250 and that only one credit may be claimed for each "qualified residence" in the taxable year.
3. Allows any unused credit amounts to be carried forward and applied to subsequent taxable years until the credit is exhausted.
4. Defines the following terms:
   1. "Security surveillance system" is any video, audio, or photographic recording devices installed for the purpose of surveilling or recording activity occurring at the qualified residence; and,
   2. "Qualified residence" is a single-family residence located in the state that is the taxpayer's primary residence.
5. Finds and declares the following for the purposes of satisfying the requirements of Revenue and Taxation Code (R&TC) Section 41:
   1. The specific goals, purposes, and objectives of this bill are to assist California residents in affording the cost of a home security camera, which can help deter property crime, allow residents to monitor their homes for natural disasters, and improve residents' overall sense of security; and,
   2. To measure whether this bill achieves its intended purpose, the Franchise Tax Board (FTB) shall prepare a written report summarizing the number of taxpayers claiming the credit.
6. Requires the FTB to provide the written report required by this bill to the Legislature by December 1, 2026 and annually thereafter.
7. Takes immediate effect as a tax levy.
8. Sunsets the credit's statutory provisions on December 1, 2030.

EXISTING LAW:

1. Allows various tax credits under the PIT Law and the Corporation Tax (CT) Law. These credits are generally designed to encourage socially beneficial behavior or to provide relief to taxpayers who incur specified expenses.
2. Allows, under the CT Law, a credit for certain qualifying expenses, including safety-related equipment, for eligible "high road cannabis employers", as specified. (R&TC Section 23664).
3. Requires any bill authorizing a new credit to contain all of the following:
   1. Specific goals, purposes, and objectives that the tax credit will achieve;
   2. Detailed performance indicators for the Legislature to use when measuring whether the tax credit meets the goals, purposes, and objectives stated in the bill; and,
   3. Data collection requirements to enable the Legislature to determine whether the tax credit is meeting, failing to meet, or exceeding those specific goals, purposes, and objectives. The requirements shall include the specific data and baseline measurements to be collected and remitted in each year the credit is in effect, for the Legislature to measure the change in performance indicators, and the specific taxpayers, state agencies, or other entities required to collect and remit data. (R&TC Section 41.)

FISCAL EFFECT: The FTB estimates General Fund revenue losses of $260 million in fiscal year (FY) 2025-26 and $250 million in FY 2026-27.

COMMENTS:

1. The author has provided the following statement in support of this bill:

AB 2219 will allow residents in single-family homes to claim up to $250 in tax credits on home security cameras to deter property crime, allow residents to monitor their homes in the event of a natural disaster with decreased financial burden, and improve the overall sense of safety for California families. AB 2219 will make home security more affordable for Californians at a minor cost to the state.

1. In opposition to this bill, the Electronic Frontier Foundation notes, in part:

The California Constitution guarantees a right to privacy. Yet that privacy is under threat, including through the increased use of privately operated surveillance cameras that capture movements throughout our neighborhoods. The mass existence of doorbell cameras, whether subsidized and organized into registries by cities, or connected and centralized through other technologies, threaten civil liberties, and exacerbate racial discrimination by enabling unnecessary surveillance.

1. Committee Staff Comments:
   1. What is a "tax expenditure"? Existing law provides various credits, deductions, exclusions, and exemptions for particular taxpayer groups. In the late 1960s, U.S. Treasury officials began arguing that these features of the tax law should be referred to as "expenditures" since they are generally enacted to accomplish some governmental purpose and there is a determinable cost associated with each (in the form of foregone revenues).

As the Department of Finance notes in its annual Tax Expenditure Report, there are several key differences between tax expenditures and direct expenditures. First, tax expenditures are typically reviewed less frequently than direct expenditures. Second, there is generally no control over the amount of revenue losses associated with any given tax expenditure. Finally, it should also be noted that, once enacted, it takes a two-thirds vote to rescind an existing tax expenditure absent a sunset date. This effectively results in a "one-way ratchet" whereby tax expenditures can be conferred by majority vote, but cannot be rescinded, irrespective of their efficacy or cost, without a supermajority vote.

• 1. What problem is this bill attempting to solve? According to the author, this bill is intended to lower the costs for residents who reside in single-family homes that purchase and install home security surveillance systems. These systems, the author argues, can deter property crime, provide a greater sense of safety, and allow residents to monitor their homes remotely during natural disasters.
  2. Who would benefit? Typically, tax credits are provided as a matter of legislative grace to encourage taxpayers to behave in ways they might not absent a financial incentive. As currently drafted, this credit is not limited based on a taxpayer's income. The Committee may wish to consider whether restricting the availability of the credit to middle- and lower income taxpayers would better ensure that this credit benefits those who might otherwise have difficulty affording a home security surveillance system.
  3. Potential privacy implications: While home surveillance systems provide peace of mind and capture evidence that could aid criminal investigations, the mass proliferation of this technology also raises important privacy considerations. For example, when cameras are placed inside a home, it is important to ensure that unauthorized individuals do not somehow gain access to the footage. To help address such concerns, California has enacted minimum security requirements for internet connected devices so that consumers can better protect themselves and their privacy.
     
  4. Committee's tax expenditure policy: Both R&TC Section 41 and Committee policy require any tax expenditure bill to outline specific goals, purposes, and objectives that the tax expenditure will achieve, along with detailed performance indicators for the Legislature to use when measuring whether the tax expenditure meets those stated goals, purposes, and objectives.  A tax expenditure bill will not be eligible for a Committee vote unless it has complied with these requirements. 

In its current form, this bill states that the credit is designed to assist California residents in affording the cost of a home security camera, which can help deter property crime, allow residents to monitor their homes for natural disasters, and improve residents' overall sense of security.

In addition to the R&TC Section 41 requirements, this Committee's policy also requires that all tax expenditure proposals contain an appropriate sunset provision to be eligible for a vote.  According to this policy, an "appropriate sunset provision" means five years, except in the case of a tax expenditure measure providing relief to California veterans, in which case "appropriate sunset provision" shall mean ten years.  This bill, as currently drafted, complies with the Committee's policy on sunset dates.

• 1. Technical considerations:
     1. As currently drafted, this bill does not define "primary residence". The absence of a definition or cross-reference to existing law may lead to taxpayer confusion and difficulty administering this credit.
     2. As currently drafted, this bill's definition of "security surveillance system" is rather broad and may include related technologies like baby monitors or other photo and video equipment that does not provide any security benefit.
  2. Related legislation: AB 582 (Connolly) would have allowed a credit for seniors residing in high or very high-risk fire zones who incur costs relating to fire-resistant home improvements, as specified. AB 582 was held on the Assembly Appropriations' Suspense File.
  3. Prior legislation:
     1. AB 324 (Choi), of the 2021-22 Legislative Session, would have allowed a tax credit for qualified taxpayers that install an attic vent closure in a residential property, as specified. AB 324 was held on the Assembly Appropriations' Suspense File.
     2. AB 266 (Choi), of the 2019-20 Legislative Session, was substantially similar to AB 324 and was also held on the Assembly Appropriations' Suspense File.
     3. AB 54 (Steinorth), of the 2017-18 Legislative Session, would have provided a deduction of up to $500 for the purchase and installation of a security fence, security alarm system, or a security surveillance system at a residence in California. AB 54 was held on the Assembly Appropriations Committee's Suspense File.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

AFSCME CA

California Teachers Association

Electronic Frontier Foundation

Analysis Prepared by: Wesley Whitaker / REV. & TAX. / (916) 319-2098