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AB-1885 Income taxes: credit: health plan coverage.(2001-2002)

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AB1885:v98#DOCUMENT

Amended  IN  Assembly  April 29, 2002

CALIFORNIA LEGISLATURE— 2001–2002 REGULAR SESSION

Assembly Bill
No. 1885

Introduced  by  Assembly Member Liu
 (Coauthor(s): Assembly Member Bill Campbell, Cedillo, Cox, Koretz, Strom-Martin, Washington)
 (Coauthor(s): Senator Figueroa)

February 05, 2002

An act to add and repeal Section 17053.76 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1885, as amended, Liu. Income taxes: credit: health plan coverage.
The Personal Income Tax Law allows various credits against the tax imposed by that law.
This bill would, for taxable years beginning on or after January 1, 2002, and before January 1, 2006 2003, allow a credit in an amount equal to 25% of the specified amount for the eligible amount paid or incurred by a qualified taxpayer for continued group health plan coverage pursuant to a specified federal law.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17053.76 is added to the Revenue and Taxation Code, to read:

17053.76.
 (a) For each taxable year beginning on or after January 1, 2002, and before January 1, 2006 2003, there shall be allowed as a credit against the “net tax,” as defined by Section 17039, an amount equal to 25 percent of the eligible amount paid or incurred by a qualified taxpayer during the taxable year for continued group health plan coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (Public Law 99-272), as amended.
(b) For purposes of this section, “qualified taxpayer” means any individual who satisfied each of the following requirements:
(1) Was employed in California by an employer who, in connection with that employment, provided the individual with group health plan coverage.
(2) Was terminated or had work hours reduced by the individual’s employer, resulting in the loss of eligibility for the employer’s group health plan.
(3) The individual elected to continue group health plan coverage (including coverage for the individual’s spouse or domestic partner, and dependent children) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (Public Law 99-272), as amended.
(c) Eligible amounts paid or incurred shall be limited to amounts paid or incurred on or after the date on which the individual becomes a qualified taxpayer within the meaning of this section, and that are paid or incurred for continued group health plan coverage for the qualified taxpayer, their spouse or domestic partner, and the taxpayer’s dependent children, pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (Public Law 99-272), as amended. In no event shall amounts paid or incurred be treated as eligible amounts after expiration of the 18-month period beginning with the date the individual becomes a qualified taxpayer within the meaning of this section.
(d) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and the seven succeeding years if necessary, until the credit is exhausted.
(e) Any deduction otherwise allowed under this part for any amounts paid or incurred by the qualified taxpayer upon which the credit allowed by this section is based shall be reduced by the amount of the credit allowed under this section.
(f) This section shall remain in effect until December 1, 2006 2003, and as of that date is repealed.

SEC. 2.

 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.