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AB-2367 Personal income taxes: credits: health care coverage. (2013-2014)

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CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 2367


Introduced by Assembly Member Donnelly

February 21, 2014


An act to add and repeal Section 17054.6 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2367, as introduced, Donnelly. Personal income taxes: credits: health care coverage.
The Personal Income Tax Law allow various credits against the taxes imposed by that law.
This bill, for taxable years beginning on or after January 1, 2014, and before January 1, ____, would allow a credit equal to the difference between the annual premium amount paid or incurred during the taxable year for an individual health care service plan contract or individual policy of health insurance and the annual premium amount paid or incurred prior to March 31, 2014, for such an individual plan contract or policy by a qualified taxpayer, which is defined as an individual whose individual plan contract or policy was canceled between during a specified time period, and who purchased a new individual plan contract or policy and paid or incurred an annual premium amount that exceeded the annual premium amount paid or incurred prior to the cancellation of his or her individual plan contract or policy.
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 17054.6 is added to the Revenue and Taxation Code, to read:

17054.6.
 (a) For each taxable year beginning on or after January 1, 2014, and before January 1, ____, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to the difference between the annual premium amount paid or incurred during the taxable year by a qualified taxpayer for an individual health care service plan contract or individual policy of health insurance and the annual premium amount paid or incurred prior to March 31, 2014, by that qualified taxpayer for an individual health care service plan contract or individual policy of health insurance.
(b) For the purposes of this section, the following definitions shall apply:
(1) “Individual health care service plan contract” means a plan contract, as defined in Section 1345 of the Health and Safety Code, issued to an individual.
(2) “Individual policy of health insurance” means a policy issued to an individual for health insurance, as defined in Section 106 of the Insurance Code.
(3) “Qualified taxpayer” means an individual whose individual health care service plan contract or individual policy of health insurance was canceled between December 31, 2013, and March 31, 2014, inclusive, pursuant to paragraph (5) or (6) of subdivision (a) of Section 1365 of the Health and Safety Code, or subdivision (d) or (e) of Section 10273.6 of the Insurance Code and, who purchased a new individual plan contract or policy and paid or incurred an annual premium amount that exceeded the annual premium amount paid or incurred prior to the cancellation of his or her individual plan contract or policy.
(c) 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 succeeding seven years if necessary, until the credit is exhausted.
(d) A deduction otherwise allowed under this part for any amount paid or incurred by the qualified taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed by this section.
(e) Credit under this section shall be allowed only for credits claimed on a timely filed original return of the qualified taxpayer.
(f) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.
(g) This section shall be repealed on December 1, ____.

SEC. 2.

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