Compare Versions


PDF |Add To My Favorites |Track Bill | print page

AB-946 Home Purchase Assistance Fund: personal income taxation: mortgage interest deduction.(2021-2022)



Current Version: 02/17/21 - Introduced Compare Versions information image


AB946:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 946


Introduced by Assembly Member Lee

February 17, 2021


An act to amend Section 51342 of the Health and Safety Code, and to add Section 17226 to the Revenue and Taxation Code, relating to housing, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 946, as introduced, Lee. Home Purchase Assistance Fund: personal income taxation: mortgage interest deduction.
Existing law requires the California Housing Finance Agency to administer, among other programs, a home purchase assistance program for the purpose of assisting low- and moderate-income homebuyers to qualify for the purchase of owner-occupied homes, with priority given to first-time homebuyers, subject to specified terms and requirements. Existing law also authorizes the agency to create its own home purchase assistance programs, home purchase assistance products, or both, on terms and conditions that the agency deems prudent. Existing law establishes the Home Purchase Assistance Fund and continuously appropriates moneys in that fund for expenditure for these home purchase assistance programs and for defraying administrative costs of the agency.
The Personal Income Tax Law allows various deductions in computing the income that is subject to the taxes imposed by that law, including, in modified conformity with federal income tax laws, a deduction for a limited amount of interest paid on acquisition indebtedness, as defined, with respect to a qualified residence of the taxpayer. Existing law limits the aggregate amount treated as acquisition indebtedness for these purposes to $1,000,000, or $500,000 in the case of a married individual filing a separate return. Existing law specifies for these purposes that a qualified residence includes the taxpayer’s principal residence and one other residence selected by the taxpayer, as provided.
This bill, for taxable years beginning on or after January 1, 2022, would disallow the deduction of acquisition indebtedness with respect to a qualified residence of a taxpayer other than the principal residence.
This bill would require the Franchise Tax Board, in consultation with the Department of Finance, to estimate the amount of additional revenue resulting from the above-described modifications made with respect to the calculation of taxable income under the Personal Income Tax Law by this bill and to notify the Controller of that amount, as provided. The bill would require the Controller, upon receipt of these notifications, to transfer an amount equal to the amount determined by the Franchise Tax Board from the General Fund to the Home Purchase Assistance Fund, as described above. By increasing the amount of money deposited in a continuously appropriated fund, this bill would make an appropriation.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 51342 of the Health and Safety Code is amended to read:

51342.
 (a) There is hereby continued in the State Treasury a Home Purchase Assistance Fund. “Fund,” as used in this chapter, means the Home Purchase Assistance Fund. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the agency, without regard to fiscal years, for expenditure pursuant to this chapter and defraying administrative costs of the agency. Notwithstanding Section 16305.7 of the Government Code, any interest earned or other increment derived from investments made from moneys in the fund shall be deposited in the fund.
(b) On and after July 1, 2016, all of the following shall apply:
(1) Any unobligated amounts remaining in any fund established for the purposes of Chapter 9 (commencing with Section 51450) or Chapter 11 (commencing with Section 51500), including, but not limited to, the California Homebuyer’s Downpayment Assistance Program, the School Facility Fee Program, and the Extra Credit Teacher Program, shall be transferred to the Home Purchase Assistance Fund for expenditure by the agency for the purposes of this chapter.
(2) The agency shall have no obligation to continue administering loan programs authorized by Chapter 9 (commencing with Section 51450) or Chapter 11 (commencing with Section 51500).
(3) Notwithstanding Section 16305.7 of the Government Code, any interest earned, or other increment derived, from investments made from moneys transferred to the fund pursuant to paragraph (1), and any loan receivables, repayments made, or other sums accruing to the agency pursuant to Chapter 9 (commencing with Section 51450) or Chapter 11 (commencing with Section 51500) shall be deposited into the fund for expenditure by the agency for the purposes of this chapter.
(c) Upon receiving the notifications from the Franchise Tax Board pursuant to paragraphs (1) and (2) of subdivision (b) of Section 17226 of the Revenue and Taxation Code, the Controller shall transfer an amount, equal to the amount estimated by the Franchise Tax Board in those notifications, from the General Fund to the Home Purchase Assistance Fund.

SEC. 2.

 Section 17226 is added to the Revenue and Taxation Code, to read:

17226.
 (a) For taxable years beginning on or after January 1, 2022, Sections 163(h)(4)(A)(i)(II) and 163(h)(4)(A)(ii)(II) of the Internal Revenue Code, relating to qualified residence, shall not apply.
(b) (1) No later than June 1, 2022, the Franchise Tax Board, in consultation with the Department of Finance, shall estimate the amount of revenue that would have resulted if the modifications made with respect to the calculation of taxable income by this section had applied to taxable years beginning on or after January 1, 2021, and before January 1, 2022, and notify the Controller of that amount.
(2) No later than June 1, 2023, and annually thereafter, the Franchise Tax Board, in consultation with the Department of Finance, shall estimate the amount of additional revenue resulting from the modifications made with respect to the calculation of taxable income by this section for the taxable years beginning on or after January 1 of the calendar year immediately preceding the year in which the estimate is made and before January 1 of the calendar year in which the estimate is made and notify the Controller of that amount.