Income taxes: credits: rehabilitation of certified historic structures.

Assembly Member Haney's preservation tax credit legislation extends and enhances California's existing incentives for rehabilitating certified historic structures through 2031, while increasing credit percentages for projects that preserve affordable housing or adapt buildings for residential use.

The measure modifies the current tax credit program by raising the maximum credit from 25% to 30% of qualified rehabilitation expenditures for projects that either preserve existing affordable housing units or convert at least half of a historic building's floor area to residential use. The legislation maintains the program's annual allocation cap of $50 million in total credits, with $10 million reserved for smaller projects - $2 million for qualified residences and $8 million for rehabilitation projects under $1 million.

To ensure proper oversight, the bill extends the Legislative Analyst's annual program review requirement through 2031. This review, conducted in collaboration with the California Tax Credit Allocation Committee and Office of Historic Preservation, examines credit demand, project types, job creation, and economic impacts. The legislation preserves existing application and allocation processes while adding specific requirements for projects claiming the enhanced 30% credit rate.

The tax credits remain available on a first-come, first-served basis, with unused allocations carrying forward to subsequent years. For partnerships, credits are allocated according to partnership agreements, regardless of federal credit allocations. The measure includes provisions for credit recapture if rehabilitation work does not commence within prescribed timeframes or if residential requirements are not met.