Bill Text: CA AB1736 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Personal income taxes: deduction: homeownership savings accounts.

Spectrum: Moderate Partisan Bill (Republican 26-4-1)

Status: (Failed) 2016-11-30 - From committee without further action. [AB1736 Detail]

Download: California-2015-AB1736-Amended.html

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BILL NUMBER: AB 1736	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 21, 2016
	AMENDED IN ASSEMBLY  MARCH 10, 2016

INTRODUCED BY   Assembly Member Steinorth
   (Coauthors: Assembly Members Achadjian, Travis Allen, Baker,
Brough, Brown, Chang, Dahle, Beth Gaines, Gallagher, Hadley, Harper,
Jones, Kim, Lackey, Low, Maienschein, Mathis, Mayes, Obernolte,
Olsen, Patterson, and Waldron)
   (Coauthors: Senators Anderson, Cannella, Fuller, Glazer, Morrell,
Nguyen, Runner, and Vidak)

                        FEBRUARY 1, 2016

   An act to add Sections 17141.5 and 17204.5 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1736, as amended, Steinorth. Personal income taxes: deduction:
homeownership savings accounts.
   The Personal Income Tax Law, in modified conformity with federal
income tax laws allows various exclusions from gross income, and
allows various deductions in computing the income that is subject to
the taxes imposed by that law, including miscellaneous itemized
deductions that are allowed only to the extent that the aggregate
amount of those deductions exceed 2% of adjusted gross income.
   This bill, on and after January 1, 2017, would allow a deduction,
not to exceed specified amounts, of the amount contributed in any
taxable year to a homeownership savings account, and, would exclude
from gross income any income earned on the moneys contributed to a
homeownership savings account. The bill would provide that a
qualified taxpayer may withdraw amounts from a homeownership savings
account to pay for qualified homeownership savings expenses, as
defined, and would provide that any amount withdrawn from that
account that is not used for these expenses would be included as
income for that taxpayer. The bill would define various terms for its
purposes.
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17141.5 is added to the Revenue and Taxation
Code, to read:
   17141.5.  For each taxable year beginning on or after January 1,
2017, gross income does not include, under the same conditions as
provided in Section 408 of the Internal Revenue Code, relating to
individual retirement accounts, any income accruing during the
taxable year to a homeownership savings account as defined in Section
17204.5.
  SEC. 2.  Section 17204.5 is added to the Revenue and Taxation Code,
to read:
   17204.5.  (a) For each taxable year beginning on or after January
1, 2017, there shall be allowed as a deduction an amount equal to the
amount contributed by a qualified taxpayer during the taxable year
to a homeownership savings account, not to exceed the amounts
specified in subdivision (b).
   (b) The deduction allowed under subdivision (a) shall not exceed
the following amounts:
   (1) Twenty thousand dollars ($20,000) for qualified taxpayers who
are married filing a joint return, a head of household, and surviving
spouses, as defined in Section 17046.
   (2) Ten thousand dollars ($10,000) in the case of a qualified
taxpayer filing a return other than as described in paragraph (1).
   (c) Any amount withdrawn from a homeownership savings account
shall be included in the income of the payee or distributee for the
taxable year in which the payment or distribution is made, unless the
payment or distribution is used to pay for the homeownership savings
expenses of a qualified taxpayer who established the account.
   (d) For purposes of this section:
   (1) "Homeownership savings account" means a trust that meets all
of the following requirements:
   (A) Is designated as a homeownership savings account by the
trustee.
   (B) Is established for the exclusive benefit of any qualified
taxpayer establishing the account where the written governing
instrument creating the account provides for the following:
   (i) All contributions to the account are required to be in cash.
   (ii) The account is established to pay, pursuant to the
requirements and limitations of this section, for the qualified
homeownership savings expenses of a qualified taxpayer establishing
the account.
   (C) Is, except as otherwise required or authorized by this
section, subject to the same requirements and limitations as an
individual retirement account established under Section 408 of the
Internal Revenue Code, relating to individual retirement accounts,
and any regulations adopted thereunder.
   (D) Is the only homeownership savings account established by the
qualified taxpayer. 
   (E) Is established by a qualified taxpayer who has a gross income
of 80 percent or less than the area median income. 
   (2) "Qualified homeownership development expenses" means expenses,
including a  down payment   downpayment 
or closing costs, paid or incurred in connection with the purchase of
a qualified taxpayer's principal residence in California for use by
that taxpayer who established the homeownership savings account.
   (3) "Qualified taxpayer" means any individual, or individual's
spouse, who  had no present ownership interest in a principal
residence during the preceding three-year period ending on the date
of the purchase of the   has never had an ownership
interest in a  principal residence subject to the contribution
allowed by this section.
   (4) "Trustee" shall have the same meaning as those terms have
under Section 408 of the Internal Revenue Code, relating to
individual retirement accounts, and any regulations adopted
thereunder.
  SEC. 3.  This act provides for a tax levy within the meaning of
Article IV of the  California  Constitution and shall go
into immediate effect.