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AB-1393 Personal income taxes: income exclusion: mortgage debt forgiveness.(2013-2014)

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Amended  IN  Senate  April 07, 2014
Amended  IN  Senate  September 06, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill No. 1393


Introduced by Assembly Member Perea
(Principal coauthors: Senators Cannella and Evans)
(Coauthors: Assembly Members Cooley, Fox, Muratsuchi, and Quirk-Silva)

March 04, 2013


An act to add Section 116273 to the Health and Safety Code, relating to drinking water. amend Section 17144.5 of the Revenue and Taxation Code, relating to taxation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 1393, as amended, Perea. Safe Drinking Water State Revolving Fund. 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, 2013, as provided. The federal American Taxpayer Relief Act of 2012 extended the operation of those provisions to qualified principal residence indebtedness that is discharged before January 1, 2014.
This bill would conform to the federal extension and make legislative findings and declarations regarding the public purpose served by the bill. The bill would also make a continuous appropriation from the General Fund to the Franchise Tax Board in those amounts necessary to make payments to taxpayers who have included in income and paid tax on qualified principal residence indebtedness that was discharged on and after January 1, 2013, and before January 1, 2014.
This bill would declare that it is to take effect immediately as an urgency statute.

The California Safe Drinking Water Act (state act) provides for the operation of public water systems and imposes on the State Department of Public Health various duties and responsibilities. Existing law requires the department to conduct research, studies, and demonstration projects relating to the provision of a dependable, safe supply of drinking water, to adopt regulations to implement the state act, and to enforce provisions of the federal Safe Drinking Water Act.

The Safe Drinking Water State Revolving Fund Law of 1997 establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable suppliers to meet safe drinking water standards. Under that law, the department is responsible for administering the fund.

This bill would transfer the administration of the fund and the grant and loan program to the State Water Resources Control Board.

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.Section 116273 is added to the Health and Safety Code, to read:
116273.

(a)The Safe Drinking Water State Revolving Fund, established in Article 1 (commencing with Section 116760) of Chapter 4.5, shall be administered by the State Water Resources Control Board. The fund shall be administered jointly with the Clean Water Revolving Loan Fund.

(b)The State Water Resources Control Board is vested with all of the authority, duties, powers, purposes, responsibilities, and jurisdiction of implementing the grant and loan programs for the Safe Drinking Water State Revolving Fund.

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 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).
(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.

SEC. 2.

 The amendments made by this act that conform to 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, 2013, and before January 1, 2014. 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 conforming state law to 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, 2013, and before January 1, 2014, and do not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution.

SEC. 3.

 Notwithstanding Section 13340 of the Government Code, and without regard to fiscal year, there is hereby continuously appropriated from the General Fund to the Franchise Tax Board those amounts necessary to make the payments required by this act to taxpayers who have included amounts in gross income by reason of the discharge of principal residence indebtedness that was discharged on and after January 1, 2013, and before January 1, 2014.

SEC. 4.

 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.