BILL NUMBER: AB 1736	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 3, 2016
	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   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   exceeds  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 a qualified
taxpayer, as defined,  contributed in any taxable year to a
homeownership savings  account, and,   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   expenses
defined as expenses paid or incurred in connection with the purchase
of a   principal residence, which is defined by reference to
a federal law and includes a mobilehome. The bill  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provide that any amount withdrawn from that account that is not used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  
savings  expenses" means expenses, including a downpayment or
closing costs, paid or incurred in connection with the purchase of a
qualified taxpayer's principal residence  within the meaning of
Section 121 of the Internal   Revenue Code  in 
California   this state  for use by that taxpayer
who established the homeownership savings account.
   (3) "Qualified taxpayer" means any individual, or individual's
spouse, who 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   that term has  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.