Homebuyer Tax Credit Moves Along, Gains Co-Author
Feb. 25, 2010
CBIA Chairman John Young testified in favor of a homebuyer tax credit during a hearing before the Senate Revenue and Taxation Committee at the State Capitol on Wednesday.
The legislation, proposed by Gov. Schwarzenegger during his State of the State address in January and backed by CBIA, also drew support during the hearing from the administration, subcontractor groups, banking leaders, labor groups and other business allies.
The bill, XB6X 4, also picked up a co-author to join Sen. Roy Ashburn, R-Bakersfield, in carrying the legislation. Sen. Elaine Alquist, D-Santa Clara, has added her name to the bill, which has moved on to a suspense file following a unanimous vote of the committee.
Young testified that the legislation is urgently needed by builders to help jump-start the California economy. Housing numbers have suffered greatly during the economic downturn, but Young said there were positive signs last year when the first homebuyer tax credit was enacted.
Young said many builders have gone under, and others have cut employment by up to 90 percent to remain in business. The homebuyer tax credit would get potential buyers off the fence, spur construction and get builders and subcontractors hiring once again.
Builders across the state experienced major jumps in both sales and traffic during last year’s tax credit, which was capped at $100 million. The current proposal doubles that amount; individual homebuyer credits are capped at $10,000 and are paid over three years.
Those testifying in favor of the legislation stressed the urgency of the matter, since a federal tax credit will expire April 30. The state proposal calls for the new program to begin May 1 and run the remainder of the year, or until the money is exhausted.
With the bill moved to a suspense file, which is common practice for legislation at this time of year, CBIA staff will continue to work diligently with legislators and the governor’s office to keep the tax credit moving forward.
Members with questions on the legislation can contact Allison Barnett.
-- Greg Robertson
