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(a) (1) For taxable years beginning on or after January 1, 2024, and before January 1, 2030, a taxpayer may make an election to receive an annual refundable credit amount of qualified credits for each taxable year to be allowed pursuant to paragraph (2).
(2) In each taxable year of the refundable period, the annual refundable credit amount shall be allowed as a credit against the “net tax” computed under this part for the taxable year, and the excess, if any, shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Tax Relief and Refund Account to the taxpayer.
(b) For purposes of this section, the following definitions shall apply:
(1) “Annual refundable credit amount” means 20 percent of the credit amount for the taxable year.
(2) (A) “Credit amount” means the amount of the qualified credits that would have otherwise been available to reduce net tax in the taxable year of the election but for the limitation under Section 17039.4.
(B) In the case of a pass-thru entity, the “credit amount” refers to the pro rata share or distributive share of the credit passed through to the partner or shareholder of the qualified taxpayer. For purposes of this subparagraph, the term “pass-thru entity” means any partnership, “S” corporation, or limited liability company treated as a partnership.
(C) In the case of an assigned credit, the “credit amount” refers to the credit amount that was assigned to the taxpayer.
(D) In the case of taxpayers required to be included in a combined report under Section 25101 or 25110, or taxpayers authorized to be included in a combined report under Section 25101.15, the “credit amount” refers to the credit amount of all members of the combined report.
(3) “Qualified credits” means the credits subject to the limitation under Section 17039.4.
(4) “Refundable period” means the first five consecutive taxable years beginning the third taxable year after the taxable year that the taxpayer makes an election under this section.
(c) No portion of the annual refundable credit amount can be assigned to another taxpayer.
(d) The following shall apply for purposes of the election pursuant to this section:
(1) The taxpayer may make an election for each taxable year beginning on or after January 1, 2024, and before January 1, 2030.
(2) Each election shall be irrevocable and shall be made on an original, timely filed return required under Part 10.2 (commencing with Section 18401) for the taxable year that the election is made in the form and manner as prescribed by the Franchise Tax Board.
(e) (1) Any adjustment of an annual refundable credit amount shall be treated as a mathematical error appearing on the return. This includes, but is not limited to, all of the following:
(A) A valid election as required under this section was not made.
(B) The Franchise Tax Board determines that credit amount overstatements in any taxable year resulted in an overstatement in any carryover amount or an overstatement of any refundable credit amount.
(C) The Franchise Tax Board determines that the credit amount was overstated as a result of any subsequent adjustment in the amount of net tax, including, but not limited to, an audit adjustment or claim for refund.
(2) Any amount of tax due resulting from such disallowance may be assessed by the Franchise Tax Board in the same manner as provided by Section 19051.
(f) (1) The Franchise Tax Board may prescribe regulations necessary or appropriate to carry out the purposes of this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.