The bill had long been carried by Assemblywoman Anna Caballero,  D-Salinas, as AB765. But as part of budget machinations in the Senate, it was folded into SBX3 37 with Sen. Roy Ashburn, R-Bakersfield as the new author and Caballero as a co-author.

Essentially the legislation, if it clears all the hurdles and receives final approval, will start the clock running again and giving people who close escrow on new unoccupied homes after its effective date a shot at receiving the credit – up to $10,0000 over three years.
 
But it shuts out people who have closed escrow since the Franchise Tax Board cut off applications on July 2. Already, more than 10,600 California buyers have been approved to get the cut.

 Home builders called it a key sales tool during the spring and summer – and cited its absence as a key reason for slumping sales during the third quarter.

The California Franchise Tax Board announced this morning it will pull the plug on its fax machine at midnight tonight, accepting no more applications for a $10,000 tax credit for buyers of new unoccupied homes in California.

Early Wednesday, the FTB said it has received 11,925 applications for the popular tax credit – 75 short of its 12,000-application limit.

The state tax agency said last month it would take 2,000 extra applications for the credit because many received are duplicates, invalid or incomplete.

The tax credit program, launched March 1 to move statewide home builders’ excess, unsold inventory, proved more popular than expected. The FTB said it has already issued 4,808 certificates for nearly $45 million worth of credits. Officials expect to process and award all the credits by the end of August.

Home builders have shifted their focus to efforts to add $200 million more to the original $100 million allocation. But that’s proved more difficult than expected in a rancorous budget climate. Some economists have criticized further allocations as a stimulus for home building when the state’s larger problem, they argue, is an excess of unsold existing homes.

The California Building Industry Association, a trade group for residential builders and suppliers, maintains that each $10,000 tax credit adds $16,000 to state government revenues and $3,000 to a local government because of the economic activity generated.