Bill Text: CA AB99 | 2015-2016 | Regular Session | Introduced

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

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Bill Title: Personal income taxes: income exclusion: mortgage debt forgiveness.

Spectrum: Bipartisan Bill

Status: (Vetoed) 2016-01-15 - Consideration of Governor's veto stricken from file. [AB99 Detail]

Download: California-2015-AB99-Introduced.html

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BILL NUMBER: AB 99	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Perea

                        JANUARY 8, 2015

   An act to amend Section 17144.5 of the Revenue and Taxation Code,
relating to taxation, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 99, as introduced, Perea. Personal income taxes: income
exclusion: mortgage debt forgiveness.
   The Personal Income Tax Law provides for modified conformity to
specified provisions of federal income tax law relating to the
exclusion of the discharge of qualified principal residence
indebtedness, as defined, from an individual's income if that debt is
discharged after January 1, 2007, and before January 1, 2014, as
provided.
   This bill would extend the operation of those provisions to
qualified principal residence indebtedness that is discharged before
January 1, 2015, thereby no longer conforming to federal income tax
law. The bill would also discharge indebtedness for related penalties
and interest and would make legislative findings and declarations
regarding the public purpose served by the bill.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 17144.5 of the Revenue and Taxation Code is
amended to read:
   17144.5.  (a) Section 108(a)(1)(E) of the Internal Revenue Code,
is modified  to provide   as follows: 
    (1)     By providing  that the amount
excluded from gross income shall not exceed $500,000 ($250,000 in the
case of a married individual filing a separate return). 
   (2) By substituting "January 1, 2014" for "January 1, 2015." 

   (b) Section 108(h)(2) of the Internal Revenue Code, is modified by
substituting the phrase "(within the meaning of section 163(h)(3)
(B), applied by substituting '$800,000 ($400,000' for '$1,000,000
($500,000' in clause (ii) thereof)" for the phrase "(within the
meaning of section 163(h)(3)(B), applied by substituting '$2,000,000
($1,000,000' for '$1,000,000 ($500,000' in clause (ii) thereof)"
contained therein.
   (c) This section shall apply to discharges of indebtedness
occurring on or after January 1, 2007, and, notwithstanding any other
law to the contrary, no penalties or interest shall be due with
respect to the discharge of qualified principal residence
indebtedness during the 2007 or 2009 taxable year regardless of
whether or not the taxpayer reports the discharge on his or her
return for the 2007 or 2009 taxable year.
   (d) The amendments made by Section 202 of the American Taxpayer
Relief Act of 2012 (Public Law 112-240) to Section 108 of the
Internal Revenue Code shall apply.
   (e) The changes made to this section by  the act adding
this subdivision   Chapter 152 of the Statutes of 2014
 shall apply to discharges of indebtedness that occur on or
after January 1, 2013, and before January 1, 2014, and,
notwithstanding any other law, no penalties or interest shall be due
with respect to the discharge of qualified principal residence
indebtedness during the 2013 taxable year, regardless of whether the
taxpayer reports the discharge on his or her income tax return for
the 2013 taxable year. 
   (f) The changes made to this section by the act adding this
subdivision shall apply to discharges of indebtedness that occur on
or after January 1, 2014, and before January 1, 2015, and,
notwithstanding any other law, no penalties or interest shall be due
with respect to the discharge of qualified principal residence
indebtedness during the 2014 taxable year, regardless of whether the
taxpayer reports the discharge on his or her income tax return for
the 2014 taxable year. 
  SEC. 2.  The amendments made by this act that extend the operation
of the amendments made by Section 202 of the American Taxpayer Relief
Act of 2012 (Public Law 112-240) to Section 108 of the Internal
Revenue Code, apply to qualified principal residence indebtedness
that is discharged on and after January 1, 2014, and before January
1, 2015. The Legislature finds and declares that the amendments made
by this act and the retroactive application contained in the
preceding sentence are necessary for the public purpose of extending
for an additional year, the amendments to the Internal Revenue Code
as made by the American Taxpayer Relief Act of 2012 (Public Law
112-240), thereby preventing undue hardship to taxpayers whose
qualified principal residence indebtedness was discharged on and
after January 1, 2014, and before January 1, 2015, and do not
constitute a gift of public funds within the meaning of Section 6 of
Article XVI of the California Constitution.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to provide tax relief to distressed homeowners at the
earliest possible time, it is necessary that this act take effect
immediately.