Bill Text: CA AB1736 | 2015-2016 | Regular Session | Amended
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
BILL NUMBER: AB 1736 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 12, 2016
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 and repeal Sections 17141.5 and 17204.5
to of 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 exceeds 2% of adjusted gross income.
This bill, upon appropriation of specified funds by the
Legislature, on and after January 1, 2017, and before
January 1, 2019, 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 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 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provide that any amount withdrawn from that account that is not used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. (a) For each taxable year
beginning on or after January 1, 2017, and before January 1,
2019, 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.
(b) This section shall become operative on the effective date of
any budget measure specifically appropriating funds to the Franchise
Tax Board for its costs of administering this section.
(c) This section shall remain in effect only until December 1,
2019, and as of that date is repealed.
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, and before January 1, 2019, 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
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.
income in which the taxpayer resides.
(2) "Qualified homeownership 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 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 that term has under
Section 408 of the Internal Revenue Code, relating to individual
retirement accounts, and any regulations adopted thereunder.
(e) This section shall become operative on the effective date of
any budget measure specifically appropriating funds to the Franchise
Tax Board for its costs of administering this section.
(f) This section shall remain in effect only until December 1,
2019, and as of that date is repealed.
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.
