BILL NUMBER: SB 199 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 16, 2007
INTRODUCED BY Senators Harman, Aanestad, Ackerman, Ashburn,
Cogdill, Cox, Denham, Hollingsworth, Maldonado, Runner, and Wyland
( Coauthor: Assembly Member
Jeffries )
FEBRUARY 7, 2007
An act to add and repeal Sections 17053.77 and 23677 of the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 199, as amended, Harman. Income and corporation taxes: credit:
health savings account.
The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
This bill would authorize a credit against those taxes for each
taxable year beginning on or after January 1, 2008, and before
January 1, 2014, in an amount equal to 15% of the amount paid or
incurred by a qualified taxpayer, as defined, during the taxable year
for qualified health insurance, as defined, for employees of the
taxpayer. This bill would require the Legislative Analyst to report
to the Legislature on or before March 1, 2013, on the effectiveness
of the credit, as specified.
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 17053.77 is added to the Revenue and Taxation
Code, to read:
17053.77. (a) For each taxable year beginning on or after January
1, 2008, and before January 1, 2014, there shall be allowed as a
credit against the "net tax," as defined in Section 17039, an amount
equal to 15 percent of the amount paid or incurred by a qualified
taxpayer during the taxable year for qualified health insurance for
employees of the taxpayer who perform services in this state.
(b) For purposes of this section:
(1) "Qualified health insurance" means amounts paid on behalf of
employees to a high deductible health plan, as defined by Section 223
(c)(2) of the Internal Revenue Code, or to a health savings account,
as defined by Section 223(d) of the Internal Revenue Code.
(2) "Qualified taxpayer" means any small to medium size employer,
or any small to medium size employer that, during the five taxable
years immediately preceding the taxable year, has not provided health
insurance to employees employed by the employer in this state.
(3) For purposes of this paragraph:
(A) "Small employer" means a person, as defined in Section 7701(a)
of the Internal Revenue Code, employing, for wages or salary, at
least two but no more than 50 persons.
(B) "Medium employer" means a person, as defined in Section 7701
(a) of the Internal Revenue Code, employing, for wages or salary, at
least 51 but no more than 250 persons.
(c) The credit allowed by this section shall be in lieu of any
deduction to which the taxpayer otherwise may be entitled for
expenses on which a credit under this section is claimed.
(d) On or before September 1, 2012, the Franchise Tax Board shall
report to the Legislature on the usage of the credit under this
section.
(e) 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 years if necessary, until the
credit is exhausted.
(f) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2014, deletes or extends that
date.
SEC. 2. Section 23677 is added to the Revenue and Taxation Code,
to read:
23677. (a) For each taxable year beginning on or after January 1,
2008, and before January 1, 2014, there shall be allowed as a credit
against the "tax," as defined in Section 23036, an amount equal to
15 percent of the amount paid or incurred by a qualified taxpayer
during the taxable year for qualified health insurance for employees
of the taxpayer who perform services in this state.
(b) For purposes of this section:
(1) "Qualified health insurance" means amounts paid on behalf of
employees to a high deductible health plan, as defined by Section 223
(c)(2) of the Internal Revenue Code, or to a health savings account,
as defined by Section 223(d) of the Internal Revenue Code.
(2) "Qualified taxpayer" means any small to medium size employer,
or any small to medium size employer that, during the five
taxable years immediately preceding the taxable year, has not
provided health insurance to employees employed by the employer in
this state.
(3) For purposes of this paragraph:
(A) "Small employer" means a person, as defined in Section 7701(a)
of the Internal Revenue Code, employing, for wages or salary, at
least two but no more than 50 persons.
(B) "Medium employer" means a person, as defined in Section 7701
(a) of the Internal Revenue Code, employing, for wages or salary, at
least 51 but no more than 250 persons.
(c) The credit allowed by this section shall be in lieu of any
deduction to which the taxpayer otherwise may be entitled for
expenses on which a credit under this section is claimed.
(d) On or before September 1, 2012, the Franchise Tax Board shall
report to the Legislature on the usage of the credit under this
section.
(e) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" in the
following year, and succeeding years if necessary, until the credit
is exhausted.
(f) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2014, deletes or extends that
date.
SEC. 3. On or before March 1, 2013, the Legislative Analyst shall
report to the Legislature on the effectiveness of the tax credit upon
employed Californians' ability to meet deductible medical expenses
incurred under qualified health insurance plans.
SEC. 4. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.